Evolution Of Western Countries' Employment Theory

Employment theory and policy has been a hot issue investigated and disputed in the history of economic thought. The study on the evolution of western economics employ ment theory plays a vital role in the choices of macroscopic employment policy. Further more, this study will affect the employment efficiency of macroeconomic policy. Curren tly, the level of full employment is an important objective of our macroeconomic regulat ion. However, the effects of employment policy are under attack from increasingly voca1critics. So, the evolution of western economics employment theory is required to be in vestigated, in order to develop a right policy, which would further integrate China into t he global economy. After centuries of development, western economics employment the ory, along the main line of two forces in collision and integration:market adjusting and government intervention, has been experienced from infancy to maturity.During the germination and growing period of capitalist system, mercantilists put fo rward the employment policy based on state’s interference of its economy. Compared wi th the’laissez-faire’employment policy established by Adam Smith, it is first confrontat ion of the two forces—market adjusting and government intervention. The question to e xplore in this period was not how to solve the unemployment, but how to create new job s opportunities. With the economic crises increase frequently, economists have discusse d the unemployment question based on the relationship between the supply and demand. Ricardo, Zaire and Pigou following the idea of Adam Smith thought that the complete marketing system must form a balance with the full employment. From the view of dem and-deficient unemployment, Malthus and Sismondi questioned the employment policy depending only on market mechanism.Since the Great Depression of the1930s, Keynes truly subverted the classical traditi onal ideas of employment, and built up a complete set of state intervention theory. With the advent of’stagflation’, the new liberalism started to arise. As post-Keynes economic s analyzed the technological structure of the labor market and Hicks analyzed the divisi onal structure of the labor market, employment theory not only existed between two for ces in collision:markets and governments. The research perspective of employment the ory was also constantly transformed from macro to micro and from macro-analysis to st ructural-analysis, indicating a continuous down trend of the employment theory’ researc h core’. The emergence of dual structure theory in development economics marked the r esearch scope of transition from the West to the developing nations.In this study, based on the analyzing the employment theories in the history of econo mic thought, the transformation and debugging of Chinese macro-demand management policy has been discussed in-depth. As macroeconomic policy, stimulating aggregate de mand may help to maintain economic growth, but it can’t achieve an equal effect on em ployment. In indicates that focusing on the output demand while ignoring employment d emand will fail to fulfill sustainable development, although a short-term growth goal ca n be satisfied. The study argues that macro-policy should return to full employment."Th e employer of last resort" provides an alternative solution to the full employment, which can build a buffer stock of labor force through public job creation.