Keynes

[LebaneseCommunistParty]

Keynes' theories seem to show a bit of both. Neo-classicals are strongly opposed to them because of the idea of governement intervention. Yet his theories of governement spending to get an economy out of a recession appear to benefit an economy as well as bring about a decrease in unemployment. Are these means a way of showing people that we NEED governement to participate in an economy, thus disproving the thatcherist and reaganite neo-classical economic theories, or is it simply way of saving capitalism in the long-run by a slight drift away from true free-market theories. Lenin said "one step forward, two steps back". Maybe for the capitalist, keynesian gov't theories are the two-steps back to save capitalism?

But keynes did appear to have somewhat of a sympathy for workers. When neo-classicals were arguing that, in the long run, we will always be at full-employment and full output, keynes said "in the long run, we are dead", telling them that in the long run workers and ppl might die before we reach that full output point that neo-classicals are so sure are goiung to happen. Maybe i've misinterpreted this statement but nonetheless, keynes is an interesting figure. your thoughts?

[BobKKKindle$]

Keynesian economy policy was used to 'save Capitalism'. Keynesian demand management and intervention is actually a Permanent Arms Economy - Western economies were able to sustain high levels of economic growth and employment for long periods of time following the Second world war through high levels of arms expenditure, which created employment and slowed increases in the general organic composition of Capital, which leads to falls in the rate of profit, through corporate taxation, and through developing new areas of production such as military technology. Or, as the International Socialism Journal of the Socialist Workers' Party (that we all know and love) describes and explains:


..Such a mechanism is to be found in a permanent arms budget. In so far as capital is taxed to sustain expenditure on arms it is deprived of resources that might otherwise go on further investment...In the countries of western capitalism military expenditure as a proportion of gross domestic product ranged from 9.8 per cent in the US (1957-59 average) to 2.8 per cent in Denmark (Britain — 6.5 per cent); and as a proportion of gross domestic fixed capital formation from nearly 60 per cent in the US to 12 per cent in Norway (Britain 42 per cent). In none was it immaterial as a market or, and this is even more important, in comparison with the resources devoted to investment.

Emphasis mine - http://www.swp.org.uk/swp_archive.php?article_id=5004

The Permanent Arms Economy (the real meaning of Keynes) is thus best understood to be a countervailing trend to the tendency of the rate of profit to fall over time. However, sustained arms expenditure allowed other countries, most notably Japan and Germany, to develop a more competitive consumer goods industry than other advanced countries and as such arms expenditures are now lower relative to the Cold War and the cycle of depression followed by 'prosperity' (ad infinitum - or ad revolutionum!) has resumed.

Incidentally, when he said 'In the long run we all are all dead' I think Keynes was criticising the idea that the economy always tends towards full employment in the long term, which is an assumption made in neo-classical economics. Keynes felt that the great depression demonstrated that this was not true.

[luxemburg89]

I'm sure I read somewhere that Keynes, and his friend the philosopher Wittgenstein, were frequent visitors to the Soviet Union... I can see if I can find out where I read it if you're interested.

[Die Neue Zeit]

Why isn't everyone here talking more about the guy who beat Keynes to the punch: Michal Kalecki (http://www.monthlyreview.org/0102jbf.htm)?


The first economist to connect the theory of crisis to the theory of monopoly was the Polish economist Michal Kalecki, who drew his inspiration from Marx and Rosa Luxemburg. Kalecki’s work in the early 1930s in Polish had developed, according to Joan Robinson and others in the circle of younger economists around Keynes, the main elements of the “Keynesian” revolution, in anticipation of Keynes himself. Kalecki moved to England in the mid-1930s where he helped further the transformation in economic analysis associated with Keynes. There he developed his concept of the “degree of monopoly,” which stood for the extent to which a firm was able to impose a price mark-up on prime production costs (workers’ wages and raw materials). In this way, Kalecki was able to link monopoly power to the distribution of national income, and to the sources of economic crisis and stagnation. Kalecki also explored the more general historical conditions affecting investment. In the closing paragraphs of his Theory of Economic Dynamics (1965) he concluded: “Long-run development is not inherent in the capitalist economy. Thus specific ‘developmental factors’ are required to sustain a long-run upward movement.”

[gilhyle]

The question posed is 'moderate socialism or saving capitlaism'.....my problem is the 'or' ......'is'might be better.

[LebaneseCommunistParty]

Originally posted by [email protected] 16, 2007 08:50 pm
The question posed is 'moderate socialism or saving capitlaism'.....my problem is the 'or' ......'is'might be better.
good point hah...

it reminds me of that ralph nader quote...i think he says "capitalism will always exist because socialism will always be there to bail it out."

[Red Rebel]

The Crisis of Keynesian Economics (http://www.marxists.org/archive/pilling/works/keynes/index.htm), a marxist view, by Geoffrey Pilling (1986)