ABSTRACT
The outcome of two hundred years of sectarian conflict is a New Economic Orthodoxy. It is the product of a fundamentalist revival of the Classical Faith which has culminated in a return to the belief that the economy is a single-gear machine whose efficiency is entirely dependent upon the lubrication of perfect competition. The experience of the Dums and the Dees in their Looking-Glass Utopia demonstrates that the economy is a multi-gear machine — so lubrication is only one problem. Unemployment has come to be regarded solely as a problem of market imperfection or disequilibrium. The various categories of unemployment can be illustrated in terms of the familiar supply and demand diagram. Acknowledgement of the possibility of a “market-clearing equilibrium rate of unemployment” would require a radical reappraisal of economic policy. Recognition of a market-clearing equilibrium rate of unemployment would focus attention on the possibility that there is a gear-lever which can be shifted — in either direction.
