Seven News Brisbane has prepared a Flashblack with an extraordinary example of full employment policy in action in Brisbane in the late sixties/early seventies, when Brisbane adopted diesel buses after the trams were retired by Clem Jones. A distinguished gentleman who must have been a Council official appears to say (in grainy audio) that, even though some of the ex-tram drivers/new bus drivers were crashing the new buses, because some of them had never driven an automobile before, that was fine in one sense because at least they still had jobs (check out the YouTube video from 1:35). That’s a good illustration of how values can influence policy. Very few of us would think like that anymore. I’m not necessarily saying it’s wrong to think that way. It just seems strange to many of us now, particularly to economists and accountants. The past is a foreign country, as they say.
In the seventies and eighties, Australia was forced to abandon what was widely viewed as an important policy goal, full employment, because the way we were going about it was highly inefficient and fiscally unsustainable. Governments could no longer absorb everyone who wanted to work in state-owned electricity boards or railways. Government would no longer be the employer of last resort. The unemployment rates of 1-2% seen in the fifties and sixties according to some measures could not be sustained. Another factor contributing to those low unemployment rates was the expectation men would hold down steady jobs for decades and that women would leave the workforce when they got married. All that has changed, too, but there is no doubt a policy goal of full employment contributed to the very low unemployment rates we saw until the oil shock, productivity slowdown, and stagflation of the seventies destroyed the post-war Keynesian model in western economies.
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