> In the end full employment turned out to be _economically_ impossible
> and not only politically distasteful for capital. It's relationship
> with inflation was the key reason
I agree, but I think saying "economically impossible" is assuming too much. The relationship between unemployment and inflation depends on institutions, like wage bargaining and market structure. (As you say, it moves around.) In principle, you can design institutions to change the relationship, even radically - which brings the issue back to the political question. The crisis of the 70's was partly a political struggle about whether or not to try to do this - whether to change institutions by deregulating the labor market, or by altering the wage bargaining process (incomes policies), or to just give up on full unemployment. In the end, the first and third options were chosen.
SA