Full employment: Difference between revisions
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There are two major currents of thought that diverge in terms of the methodology to follow: | There are two major currents of thought that diverge in terms of the methodology to follow: | ||
* '''''Keynesianism'''''. The defenders of this current affirm that the supply and demand of the labor system cannot be adjusted automatically, being the State responsible for intervening in times of recession, and recovering the employment rate in the country. | * '''''Keynesianism'''''. The defenders of this current affirm that the supply and demand of the labor system cannot be adjusted automatically, being the State responsible for intervening in times of recession, and recovering the employment rate in the country. Keynes thought that unemployment was one of the main faults of capitalism. | ||
* '''''Liberalism'''''. The liberals assure that, in order for the country to enjoy a situation of full employment, the presence of free competition in the markets is necessary. In this situation, the State would simply adjust the legal framework to defend this free competition and protect business initiative. | * '''''Liberalism'''''. The liberals assure that, in order for the country to enjoy a situation of full employment, the presence of free competition in the markets is necessary. In this situation, the State would simply adjust the legal framework to defend this free competition and protect business initiative. | ||
Regardless of the thoughts that each current or individual has, it is undeniable that full employment must be one of the main objectives for each country. Work, in many places, is considered a "right" that all its inhabitants have, so the achievement of this objective is essential for social and economic well-being. | Regardless of the thoughts that each current or individual has, it is undeniable that full employment must be one of the main objectives for each country. Work, in many places, is considered a "right" that all its inhabitants have, so the achievement of this objective is essential for social and economic well-being. | ||
Despite the impossibility of literally putting the concept into practice, and even with the existence of frictional unemployment, full employment should be one of the fundamental objectives to be achieved by all nations, since, if it were to do so, their economy would be in perfect balance and society would develop to a much higher level. | Despite the impossibility of literally putting the concept into practice, and even with the existence of frictional unemployment, full employment should be one of the fundamental objectives to be achieved by all nations, since, if it were to do so, their economy would be in perfect balance and society would develop to a much higher level. | ||
Revision as of 12:06, 12 November 2022
Full employment is the economic concept that refers to a situation where the entire active population of a country is working. This situation would imply that the markets are in perfect balance, companies would have no problem finding qualified personnel for their jobs and citizens would find employment at any time.
The concept of full employment[1] is rather theoretical since it is hard to find a real case where unemployment is exactly zero. In practice, the labor market presents many imperfections: the workforce is always changing, people come and go to work for many reasons such as different interests, moving to another country, starting a new job or studies, etc. It is practically impossible to reach an exact moment in which the demand and supply of labor are equal, but it is an ideal situation and everything that means approaching it is positive, socially and economically speaking.
Ways to reach full employment
There are two major currents of thought that diverge in terms of the methodology to follow:
- Keynesianism. The defenders of this current affirm that the supply and demand of the labor system cannot be adjusted automatically, being the State responsible for intervening in times of recession, and recovering the employment rate in the country. Keynes thought that unemployment was one of the main faults of capitalism.
- Liberalism. The liberals assure that, in order for the country to enjoy a situation of full employment, the presence of free competition in the markets is necessary. In this situation, the State would simply adjust the legal framework to defend this free competition and protect business initiative.
Regardless of the thoughts that each current or individual has, it is undeniable that full employment must be one of the main objectives for each country. Work, in many places, is considered a "right" that all its inhabitants have, so the achievement of this objective is essential for social and economic well-being.
Despite the impossibility of literally putting the concept into practice, and even with the existence of frictional unemployment, full employment should be one of the fundamental objectives to be achieved by all nations, since, if it were to do so, their economy would be in perfect balance and society would develop to a much higher level.
- ↑ Harvey, Philip. (2016), pp. 1-22
