Japan syndrome

[Max Sawicky]

>  >This is way too simple and is contradicted, though not
>  >refuted, by simple responses.  First, if the real wage reduction
>  >is associated with an employment increase, there is a
>  >gain to the working class that offsets the loss to
>  >some extent, possibly great.
>
>On what basis do you make such an interpersonal comparison of "utility" to
>determine aggregate welfare for the class as a whole?

I didn't mention utility, nor was I alluding to it.
If wages go down and employment goes up, total wages
could increase (not necessarily the wage share). It
is possible to construe the aggregate increase as a 'gain'
for the working class, though equally possible to
define gain in some other way.  The passage seemed
way too facile.  And I'm not even a macroeconomist.


>Keynesianism seems to me to mean great hardships for the workers, just as
>Mattick argued. Moreover, what is the limit to Keynes' program? Could not

Tight labor markets are good for workers, as the present
data show.  Certainly there are limits to macro policy,
keynesian or otherwise,
from the standpoint of diverse and radical social
objectives.  But as far as it goes, it ain't bad.


>  >  Third, if there is slack
>  >in the economy and prices are sticky, the effect of
>  >an increase in aggregate demand could augment
>  >employment by increasing both supply and demand for
>  >labor.
>
>On a short term basis or at great hardship to those already employed.
>Yours, Rakesh

Huh?

max