In 1928 he reinforced his neoclassical credentials, saying very little additional employment and no permanent employment can be created by state borrowing and state expenditure. That is, of course, the exact opposite of the idea of a job guarantee, but is Churchill partially right? Can a job guarantee ever create jobs that will enhance productivity?
This week Phil and Steve look into job creation and Churchill’s fear of using government spending to protect the labour market. It was a time when even Joh Maynard Keynes didn’t get everything right. For example, he argued that the multiplier effect would add new money and new employment from government cash injections. But how can you multiple the injection if no new money is created? And it ignores the real benefits jobs can create, behind the money gained from those directly employed, whether by the government or the private sector.