We have considered the political reasons for the opposition to the policy of creating employment by government spending. But even if this opposition were overcome -- as it may well be under the pressure of the masses -- the maintenance of full employment would cause social and political changes which would give a new impetus to the opposition of the business leaders. Indeed, under a regime of permanent full employment, the 'sack' would cease to play its role as a 'disciplinary measure. The social position of the boss would be undermined, and the self-assurance and class-consciousness of the working class would grow. Strikes for wage increases and improvements in conditions of work would create political tension. It is true that profits would be higher under a regime of full employment than they are on the average under laissez-faire, and even the rise in wage rates resulting from the stronger bargaining power of the workers is less likely to reduce profits than to increase prices, and thus adversely affects only the rentier interests. But 'discipline in the factories' and 'political stability' are more appreciated than profits by business leaders. Their class instinct tells them that lasting full employment is unsound from their point of view, and that unemployment is an integral part of the 'normal' capitalist system.Digby's been saying for more than a year that, even if Obama wins, the pro-austerity centrists are going to use the lame duck session to shiv any economic hopes for the middle and working classes. I fear she's right. We could end this depression now: but the sad truth is the Powers That Be don't want that.
-- Michal Kalecki, "Political Aspects of Full Employment" (1943)
(Kalecki's essay has been making the rounds; I got it from these posts by Shawn Gude and Matt Yglesias.)