Kalecki on full employment

rayrena rayrena at accesshub.net
Sat Oct 10 13:35:22 PDT 1998


[I've been lurking in the background for a while, trying to absorb what you all are talking about. But I'm no economist; in fact, my knowledge of economics comes from Doug's book and magazine, and could fit in any LBOer's little finger. Anyway, here goes...]

It has been almost a year since I have read it, but Thurman Arnold's "The Folklore of Capitalism" (1937) gives a great analysis of capitalists' opposition to government-created full employment. Because his theory is less economically centered than social/psychological, he concentrates on the dangerous precedent of government interference in business rather than its actual economic consequences. Capitalists' do not fear full employment per se (as Kalecki notes, it would create millions of new consumers for them), but the fact that government would be creating it. This is dangerous in their minds because: (1) it contradicts their (sincere) faith in the benevolence, wisdom, and rightness of the market; and, more importantly, (2) it gives society a glimpse into the great potential of both collective and governmental action--a dangerous precedent indeed.

I guess all of this is Population Control 101. And maybe I'm not adding anything to the discussion. But I recommend the book because it discusses this matter thoroughly and, I think, with great accuracy. I also think it is interesting considering the time it was written: in the middle of the New Deal and the Nazi's rise, and six years before Kalecki.

One more thing: The phrase "ruling class" has been appearing in this thread. I just finished reading C. Wright Mills' "The Power Elite," where he talks about that term. I don't bring this up to invalidate the way the phrase has been used in this thread--the discussion has been about the economic elite after all--but because it is an interesting distinction, at least semantically. Mills wrote the book over forty years ago, and I think since that time the power of the economic elite has increased--to the detriment of the political elite-- at least enough to destroy some of his theories. Nonetheless, the book as a whole illuminates the relationship between the economic and political, and how the two combine and overlap to create the power elite. Anyway, this is what he wrote about the phrase "ruling class:"

"'Ruling class' is a badly loaded phrase. 'Class' is an economic term; 'rule' a political one. The phrase, 'ruling class,' thus contains the theory that an economic class rules politically. That short-cut theory may or may not at times be true....[T]he phrase 'ruling class,' in its common political connotations, does not allow enough autonomy to the political order and its agents, and it says nothing about the military as such....[W]e do not accept as adequate the simple view that high economic men unilaterally make all decisions of national consequence. We hold that such a simple view of 'economic determinism' must be elaborated by 'political determinism' and 'military determinism'; that the higher agents of each of these three domains now often have a noticeable degree of autonomy; and that only in the often intricate ways of coalition do they make up and carry through the important decisions. Those are the major reasons we prefer 'power elite' to 'ruling class' as a characterizing phrase for the higher circles when we consider them in terms of power."



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