In should be first stated that, although most economists are now agreed that full employment may be achieved by government spending, this was by no means the case even in the recent past.  Among the opposers of this doctrine there were (and still are) prominent so-called 'economic experts' closely connected with banking and industry.  This suggests that there is a political background in the opposition to the full employment doctrine, even though the arguments advanced are economic.  That is not to say that people who advance them do not believe in their economics, poor though this is.  But obstinate ignorance is usually a manifestation of underlying political motives.

There are, however, even more direct indications that a first-class political issue is at stake here.  In the great depression in the 1930s, big business consistently opposed experiments for increasing employment by government spending in all countries, except Nazi Germany.  This was to be clearly seen in the USA (opposition to the New Deal), in France (the Blum experiment), and in Germany before Hitler.  The attitude is not easy to explain.  Clearly, higher output and employment benefit not only workers but entrepreneurs as well, because the latter's profits rise.  And the policy of full employment outlined above does not encroach upon profits because it does not involve any additional taxation.  The entrepreneurs in the slump are longing for a boom; why do they not gladly accept the synthetic boom which the government is able to offer them?  It is this difficult and fascinating question with which we intend to deal in this article.

The reasons for the opposition of the 'industrial leaders' to full employment achieved by government spending may be subdivided into three categories: (i) dislike of government interference in the problem of employment as such; (ii) dislike of the direction of government spending (public investment and subsidizing consumption); (iii) dislike of the social and political changes resulting from the maintenance of full employment.  We shall examine each of these three categories of objections to the government expansion policy in detail.