Beveridge Debunked?

Extract

The fashionable Beveridge school of full employment economics is open to a good deal of detailed criticism, and Professor Fisher has made a valiant, if not wholly successful attempt to suggest the greater importance of a different approach. In spite of a number of dexterous jabs the Beveridge school still stands, sore but unshaken; in rightly denying that the New Economics are new, Professor Fisher tends to slip too easily into denying that they are frequently good economies. But he has made out his cause on a great many individual points, and provided a valuable corrective to the tendency to over-emphai se monetary solutions.

On the central issue of full employment, the essence of the Beveridge case is that needs must be clothed with purchasing power. If demand shows signs of failing to absorb the whole available output, then tax remissions or subsidies must be used to enable or induce people to buy the goods which they want—or, more commonly, what the current political majority thinks that they ought to want. Professor Fisher prefers to approach the other way round. If goods are unsold, why do producers not make more effort to give consumers what they want? Why not try to promote new enterprise at the “growing points” of the economic system, and to render existing firms more adaptable? There is not much difficulty in showing that along these lines a great deal more could be done than was actually attempted in the thirties; most of all, of course, in Professor Fisher’s own special field of international trade.