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Most people agree that unemployment in the Western economies is worryingly high. Before they can design economic policies to try to do something about it, however, politicians and economists have to decide the answer to an emotionally charged question. Are individuals effectively choosing to be unemployed? If the answer is yes, the State might wish to reduce the attractiveness of being without work, and to allow those in jobs to keep a larger share of the tax revenue that at present goes to cross-subsidize the jobless. If the answer is no, the State may have to look elsewhere for ways to tackle unemployment, and perhaps consider methods of directly raising the number of jobs1 rather than reducing the number of benefit claimants. The tension between these opposing views is visible in most public debates about the nature of unemployment. Put loosely, the first of the two is the right-wing position that …