ILRLE 3440 Lecture Notes - Lecture 25: Easterlin Paradox, Misdemeanor, Population Control
8 May 2018
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3 May 2018
ECON 3300 - Lecture 25!
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White Paper of 1944 !
Government pledges to keep employment at a high and sustainable level!•
Does not define or promise full employment!•
Has five-year plans of public works in case the private sector fails to provide enough jobs!•
Government says it is not planning deliberate deficits!•
The budget does not need to be balanced every year, but can be balanced over an unspecified •
amount of time!
Whole report is ambiguous !•
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Beveridge believed this was not enough!
He calls for deliberate government planning to keep unemployment at 3% or lower!•
Keynes thought this was too hard and wanted to get to 5%!•
Remember Britain’s unemployment at the time was averaging in the double digits !•
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The Labour Party commits to full employment in 1945 when they win the election. In 1951 the
define full employment at 3%. This was eventually accepted by all British parties!
This was easy to accept because the average unemployment rate between 1948-1971 is 2.1%!•
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Keynes in 1930: What will the economy be like in 2030?!
It is not true that the rapid economic of the 19th century is over. Just a period of adjustment!•
Over the past 300 years, despite enormous population growth, output per persons has increased •
four fold!
Predicts economic growth with start up again and accelerate and the real per capita income will •
be between 4 to 8 times what it is in 1930!
Assumes no major wars and no huge increase in population!•
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Q: How will people act?!
People have absolute needs and relative needs!•
Absolute needs, like food, and don’t depend on other human beings!◦
Relative needs satisfy our desire to feel to superior!◦
Absolute needs are satiable while relative needs can be insatiable!•
At some point in the future, every person’s absolute needs will be satisfied!•
People will now have to decide how to occupy our leisure time !•
Most people will work no more than 3 hours a day, 15 hours a week!◦
People will return the tradition virtues that avarice is a vice and that the love of money is ◦
detestable and usury is a misdemeanour!
The pace at which we reach this state depends on three thing!•
Population control!1.
Avoiding wars!2.
Listening to scientists!3.
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Document Summary
Government pledges to keep employment at a high and sustainable level. Has ve-year plans of public works in case the private sector fails to provide enough jobs. Government says it is not planning deliberate de cits. The budget does not need to be balanced every year, but can be balanced over an unspeci ed amount of time. He calls for deliberate government planning to keep unemployment at 3% or lower. Keynes thought this was too hard and wanted to get to 5% Remember britain"s unemployment at the time was averaging in the double digits. The labour party commits to full employment in 1945 when they win the election. In 1951 the de ne full employment at 3%. This was eventually accepted by all british parties. This was easy to accept because the average unemployment rate between 1948-1971 is 2. 1% It is not true that the rapid economic of the 19th century is over.
