5. H&M see the following causes for unemployment:
a) “On the domestic front, they include a technology of rampant automation that has created severe employment strains in all advanced countries (...) The result is prospective increasing dependency on government-financed programs of unemployment relief or public works.” (p120-121)
b) “Meanwhile, on the international front, (...) “globalization” of production carries unsettling implications for all advanced capitalisms, including the lowering of social, environmental, and labor standards (...)” (p121)
c) Other issues are volatility of financial flows, demography and immigration, ecology and nationalism & terrorism.
Comment: This is bad economics. See Krugman & my work.
H&M’s book is recommended on the back-flap by Lester Thurow as “essential reading”. They and their readers are advised to read Krugman on Thurow.
There is a final caveat. With my European background it is easier for me to see the value of government involvement, cost-benefit analysis and policy analysis. I am not familiar with the American academic situation, and it may be that H&M really have a case that these aspects are underappreciated in the US.
Note 2000: I found P. Dasgupta (1998) also criticising Heilbroner. My problem in this discussion is that both authors do not adhere to the definition of economics, and thus don’t really communicate. Many of Dasgupta’s points however are accurate. On the other hand, what is of value in Heilbroner’s view is that Political Economy seems to be getting less attention than one might hope for. This point is not really answered by Dasgupta - who seems to neglect the Political Economy issue of integration of scientific knowledge for the management of the state.
All authors
All authors advise their colleagues, policy advisers and politicians. All however accept the current institutional setting of economic policy making, and accept that their thoughts get less unbiased attention than could be useful.
My advice however is a constitutional amendment for an Economic Supreme Court. The lack of sufficient checks and balances is a major cause for the tragic economic record of the last century. When experts know of Pareto improving possibilities, then policymakers have too much freedom to neglect this. Policymakers have too much freedom to pursue their own pet theories even in the face of contradictory evidence.