A Highlight from the Oxford Years, 1965-1975

Robin’s most admired and cited article is his 1968 paper in the Economic Journal on why the UK had had full employment since the War. In it, his great understanding of historical and political processes linked to his command of sound economic theory (not only that of Keynes) combined to produce a convincing set of arguments for why full employment was attained and maintained, a set of arguments so much more sophisticated and measured than the simple appeal of the then conventional wisdom to the application of Keynesian policies by governments in the post-war period.

Robin starts by contrasting the employment and unemployment experiences of the nineteenth century (up to 1914), the interwar years and the post-war years.

Making adjustments the best he and other economic historians could, the unemployment record of the nineteenth century sits in between those of the other two periods. Robin systematically attempts to put orders of magnitude and qualitative judgements on the likely causes at work—Marxian unemployment associated with insufficient capital to allow full employment of labour, dual labour markets whereby one portion of the workforce is guaranteed employment for long periods, while the other portion is at the mercy of daily hiring and firing. The proportions of the first to the second changed over the three periods concerned. Keynesian unemployment due to deficient effective demand became more important between the nineteenth century and the interwar years but was not that important a part of the story because of full employment in the post-war years. But was this primarily due to direct government measures as opposed to creating an environment in which animal spirits were more buoyant so that required expected profits were not as high as in the preceding periods? Robin highlights the much higher amount of private sector accumulation in the post-war period than in the two preceding periods. He dubs this a result of a ‘safety net theory of the role of government’: ‘although the acrobat had not fallen, his knowledge of the presence of the safety net had given him confidence and improved his performance’ (ibid.: 562).

Robin’s aim is to test two propositions:

• (i) As compared with the inter-war period there has.Theen an increase in effective demand.. .relative to supply; but it is non-proven that this is due to government policy.. .in any simple sense.
• (ii) The decline in unemployment as compared with before 1914 is not...a Keynesian phenomenon at all (ibid.: 556).

After a wide-ranging and exhaustive account of the three periods, Robin sums up:

Part of the reason for low unemployment in the post-war period has been the trend increase in the scarcity of labour relative to capital. This is non-Keynesian...will persist and.. .has little.. .to do with government policy ... [I]t provided.. .protection to labour from the effects of fluctuations in demand. [Also] there has been a major change compared with the abnormally depressed inter-war period in the level of effective demand relative to supply [but] it is unclear how much of this has been due to government policy (ibid.: 568).

Robin concludes with the proviso that he ‘does not mean to deny that a different policy.. .could have prevented there being full employment ... That this was not [so] is something for which economists and the Keynesian revolution can have some credit’ (ibid.: 568-569).