The achievement of full employment or, as it is sometimes presented, the minimization of unemployment has been a major goal of public policy since the economic cataclysm of the 1930's. This goal reflects the implicit belief among policymakers that achieving full employment is the appropriate concern of a manpower policy responsive to the needs of individuals and society. This perception, along with the labor force concepts used to measure progress toward the full-employment objective, has its origin in the surroundings of the depression era and the Keynesian revolution. The events of this period, marked by mass unemployment and related economic hardship, and their conception in economic theory continue to shape contemporary economic policies and labor force concepts. What proved to be an adequate measure for one set of perceived problems may prove to be inadequate for another, necessitating a change in concepts or methods of measurement. In particular, the relevance of depression era policies and labor force concepts to the present is a question of major importance. Current surroundings have changed, with the growth of income transfer programs and multiple earner families weakening the link between unemployment and economic hardship. As the surroundings have changed, so has economic theory. Led by the resurgence of neoclassical theory and the development of neo-Marxist theories of segmentation, the perception of unemployment and its causes has changed over time. This paper traces the evolution of economic theory and events, and their impact upon labor force concepts. The relationship of current concepts of employment and unemployment to Keynesian theory and events of the depression era is described and the implications of post-Keynesian theories for these concepts explored. The argument is advanced that current labor force concepts lag behind contemporary economic theories and events. Some directions for change are suggested.

Jerome Stein's article in a recent issue of this Review is subject to misinterpretation which could lead to seriously misleading results. He makes several arguments against the Council's conclusion that Many, though not all, pollution problems are local in character, and therefore determination of the appropriate level of environmental quality in these cases is likely to be more accurate if it is done locally rather than by the Federal Government . (quoted by Stein, p. 532). One of his arguments is that local pricing (effluent charges) would result in inefficiency because the marginal product of pollution would then differ from region to region. Possible confusion results from the fact that two separate measures of pollution are not consistently distinguished. The first is a physical measure like pounds of biochemical oxygen demand or tons of sulfur oxide discharge. The other is the dollar value of damage. In Stein's Figure 1, the horizontal axis represents pollution damage and what is demonstrated is that a dollar's worth of damage must be charged for at the rate of a dollar if efficiency is to prevail. This is emphatically not the same as saying that every pound of discharge should be charged for at the same rate, no matter where in the nation it occurs. But the latter is a conclusion that could easily be inferred from Stein's discussion. instance, Stein says, For example, if the firms were ordered to reduce the rate of pollution by Ax, . (p. 533) where the correct reference is to pollution damage. A similar sliding over from pollution emission to pollution damage occurs again in the first full paragraph of page 535. The translation of pounds of discharge into dollars of damage depends, among other things, on meteorological and hydrological conditions and on the presence and preferences of receptors. Charging a dollar for a dollar's worth of damage requires quite different rates of charge per pound of discharge depending upon the locality. A uniform national charge might be defended on other grounds (see Kneese) but not as a requirement for efficiency strictly speaking. Charges which reflect local conditions could in principle be set locally or nationally. If the Council's argument is right, and I am not trying to assess it here, that the optimum level of environmental quality is more likely to be accurately determined locally, then, problems of implementation aside, more efficient charges could be set locally.

The allocation of investment to particular industries is a major problem in economic projection and planning. The purpose of this paper is to examine the stability of the sectoral incremental capital-output ratios over time and their differences among countries. It is clear that the usefulness of these ratios in projecting capital requirements will depend on how stable they are, at least over the periods used in development programs. Section I examines the problem of measuring the incremental capital-output ratio and lists the factors affecting it. Section II offers the empirical results of the behavior (trend and variability) of the ratio in a number of sectors of several countries. Section III deals with the possibility of misallocation of investment even if the ratio is stable, and offers an interpretation of the findings.