• Workers do not normally choose to be unemployed.
• In our current system, persistent unemployment is not an aberration. It is much more common than full employment, and the outcome of elite policy choices.
• Labor surpluses propped up by flawed unemployment numbers have helped to keep real wages stagnant for more than forty years.
• Prior to the New Deal and the era of big government, laissez-faire policies repeatedly led to depressions with heavy, even catastrophic, job losses.
• Undercounting the unemployed sabotages the creation of government job programs that can lead to more high-paying jobs and full employment.

In the 1930s, the unemployed were organizing. Jobless workers felt they were “entitled" to a new kind of government protection—the protection from undeserved unemployment and the financial straits that such unemployment created. They wanted dignified forms of relief (including work relief) during the Depression, and unemployment insurance after.

Becoming Entitled artfully chronicles the emergence of this worker entitlement and the people who cultivated it. Abigail Trollinger focuses largely on Chicago after the Progressive Era, where the settlement house and labor movements both flourished. She shows how reformers joined workers and relief officials to redeem the unemployed and secure government-funded social insurance for them. Becoming Entitled also offers a critical reappraisal of New Deal social and economic changes, suggesting that the transformations of the 1930s came from reformers in the “middle,” who helped establish a limited form of entitlement for workers.

Ultimately, Trollinger highlights the achievements made by reformers working on city- and nation-wide issues. She captures the moment when some people shed the stigma that came with unemployment and demanded that the government do the same.

The advent of economic neoliberalism in the 1980s triggered a shift in the world economy. In the three decades following World War II, now considered a golden age of capitalism, economic growth was high and income inequality decreasing. But in the mid-1970s this social compact was broken as the world economy entered the stagflation crisis, following a decline in the profitability of capital. This crisis opened a new phase of stagnating growth and wages, and unemployment. Interest rates as well as dividend flows rose, and income inequality widened.

Economists Gérard Duménil and Dominique Lévy show that, despite free market platitudes, neoliberalism was a planned effort by financial interests against the postwar Keynesian compromise. The cluster of neoliberal policies--including privatization, liberalization of world trade, and reduction in state welfare benefits--is an expression of the power of finance in the world economy.

The sequence of events initiated by neoliberalism was not unprecedented. In the late nineteenth century, when economic conditions were similar to those of the 1970s, a structural crisis led to the first financial hegemony culminating in the speculative boom of the late 1920s. The authors argue persuasively for stabilizing the world economy before we run headlong into another economic disaster.

This book sets forth both a theory and a comparative empirical analysis of stagflation, that peculiar combination of high unemployment, slow growth, and spurts of high inflation bedeviling the advanced industrial nations during the past fifteen years.

The authors first construct a small macroeconomic model that takes full account of aggregate demand and supply forces in the determination of output, employment, and the price level, in both a single-economy and a multi-economy setting. They then apply the model to provide an understanding of comparative performance of industrial countries in the areas of unemployment, inflation, productivity, and investment growth. They argue convincingly that the decay of the major economies during this period resulted from the supply shocks of the 1970s, such as the two major OPEC oil-price increases, and from the consequent policy-induced decrease in demand in response to inflationary pressures. Their analysis differs markedly from similar studies in that it takes specific account of institutional differences in the labor markets of the various economies. This helps to explain in particular the divergent adjustment profiles of the United States and Europe.

Michael Bruno and Jeffrey D. Sachs make several key recommendations for the mix of demand management and incomes policies necessary to combat stagflation in individual countries as well as for the coordination of macroeconomic policies among the major industrial nations.

It is commonplace in contemporary American politics for those who experience economic strain to join together and ask the government for help. The unemployed, by and large, have not done so. In their study, Kay Lehman Schlozman and Sidney Verba look closely at the unemployed and ask why not.

Using the results of a large-scale survey supplemented by intensive interviews, the authors consider the political attitudes and behavior of the unemployed: how much hardship they feel, how they interpret their joblessness, what they do about it, how they view the American social order, and how they vote or otherwise take part in politics. The analysis is placed in the context of several larger concerns: the relationship between stress in private life and conduct in public life, the circumstances under which the disadvantaged are mobilized for politics, the changing role of social class in America, and the links between politics and macroeconomic conditions.

In the pages of this intriguing volume, a cure to stagflation seems to be at hand. Martin L. Weitzman, one of America’s leading economic theorists, has hit upon a central feature of our economic life as the cause of this chronic malady: the standard practice of paying workers a fixed wage, regardless of whether a company is doing well or poorly. Weitzman shows in a clear straightforward way that an alternative labor payment system, in which a significant number of firms share profits or revenues with their employees (like the Japanese bonus system), provides immunity against stagflation; an economy of such firms automatically soaks up unemployed labor and resists inflation.

Under the Weitzman system, firms always have an incentive to take on more workers because the additional worker is paid only a fraction or share of the revenue he brings into the firm. General Motors and Eastern Airlines have already taken steps to implement profit and revenue sharing. Here, for the first time, is a lucid explanation and justification of share systems. Eschewing theoretically unsound schemes such as supply-side tax cuts and industrial policy on the one hand and macroeconomic sledgehammer “cures” on the other, The Share Economy provides a powerful and hopeful account of what may become the most important economic innovation of our time.

Dissatisfied with the explanations of the business cycle provided by the Keynesian, monetarist, New Keynesian, and real business cycle schools, Edmund Phelps has developed from various existing strands—some modern and some classical—a radically different theory to account for the long periods of unemployment that have dogged the economies of the United States and Western Europe since the early 1970s. Phelps sees secular shifts and long swings of the unemployment rate as structural in nature. That is, they are typically the result of movements in the natural rate of unemployment (to which the equilibrium path is always tending) rather than of long-persisting deviations around a natural rate itself impervious to changing structure. What has been lacking is a “structuralist” theory of how the natural rate is disturbed by real demand and supply shocks, foreign and domestic, and the adjustments they set in motion.

To study the determination of the natural rate path, Phelps constructs three stylized general equilibrium models, each one built around a distinct kind of asset in which firms invest and which is important for the hiring decision. An element of these models is the modern economics of the labor market whereby firms, in seeking to dampen their employees’ propensities to quit and shirk, drive wages above market-clearing levels-the phenomenon of the “incentive wage”—and so generate involuntary unemployment in labor-market equilibrium. Another element is the capital market, where interest rates are disturbed by demand and supply shocks such as shifts in profitability, thrift, productivity, and the rate of technical progress and population increase. A general-equilibrium analysis shows how various real shocks, operating through interest rates upon the demand for employees and through the propensity to quit and shirk upon the incentive wage, act upon the natural rate (and thus equilibrium path).

In an econometric and historical section, the new theory of economic activity is submitted to certain empirical tests against global postwar data. In the final section the author draws from the theory some suggestions for government policy measures that would best serve to combat structural slumps.