Interwar Unemployment In International Perspective



For two decades after the Second World War, many economists and politicians thought that the battle against large-scale unemployment had been won. Since 1970, however, the armies of full employment have suffered a series of reversals. The US unemployment rate doubled between the late 1960s and 1980 and has shown disturbingly little tendency to decline since. Unemployment in the Common Market countries of Europe also doubled over the decade up to 1980 and, more distressingly, doubled again over the first half of the current decade. For the OECD as a whole, the standardized unemployment rate has risen from 5.1 per cent in 1977, when this statistic was first calculated, to 8 per cent in 1985.l With increasing frequency, parallels are drawn with the heretofore unprecedented experience with large-scale unemployment during the interwar years.

It is hard to know what to make of the comparison, for the literature on interwar unemployment is circumscribed by two serious limitations. A first limitation is that the recent literature is confined almost exclusively to the 1 experience of two countries: the United States and the United Kingdom. There is little scholarly literature on interwar unemployment in a surprising number of other countries. While the unemployment experience of other countries has been the subject of the occasional study, the specialized approaches taken have not permitted comparisons or generalizations. A second limitation is that the literature on interwar unemployment is heavily macroeconomic and based on highly imperfect macroeconomic indicators. Investigators have remained preoccupied by the behavior of the aggregate unemployment rate as measured by trade union returns or unemployment insurance statistics. Despite the questions that can be raised about the reliability of those statistics and about their comparability across countries, the standard series continue to serve as the basis for a steady stream of macroeconometric studies. By comparison, little systematic attention has been devoted to the incidence of interwar unemployment (what groups of workers were at risk), the effects of interwar unemployment (particularly implications for poverty, malnutrition and employability), and responses to interwar unemployment by labor force participants and their families.

For observers merely interested in invoking interwar experience as an illustration of how disastrous for an economy and society large-scale unemployment can be, aggregate unemployment rates may suffice, even if limited to the US and the UK and measured with serious error. For the rest, the true dimensions of interwar unemployment experience remain obscure. How, for example, did the characteristics of interwar unemployment vary across countries? How did the characteristics of high unemployment in the 1930s differ from the characteristics of high unemployment in the 1980s? What can we learn about the incidence of unemployment, its effects, and the responses it elicited?

This volume presents a set of specially commissioned studies designed to address these questions. It summarizes the proceedings of a conference which brought together an international, interdisciplinary group of scholars concerned with the problem of interwar unemployment. Following a chapter reassessing the macroeconomic evidence are nine country studies focusing on the experiences of the UK, Germany, Italy, Belgium, France, the United States, Canada and Australia. While differences in historical circumstances and source materials dictate different approaches to the country studies, each attempts to speak to a common set of issues: the incidence of unemployment, the effects of unemployment, and the response of the unemployed. The all but total absence of a literature on interwar 2 unemployment in a number of these countries means that many authors are venturing out into uncharted terrain. Although as a result they sometimes are unable to provide definitive answers to the central questions — Who was unemployed? What were the effects of unemployment? What was the response of the unemployed? ~ even the most basic facts about interwar unemployment shed important new light on questions previously shrouded in darkness.