pre-Keynesian

[James Baird]

> I said that it's not inflationary in an economy with
> slack resources, 
> but there's a limit to that kind of spending. Limits
> in the narrowly 
> economic sense - debt/GDP ratios, for example - but
> also, more 
> importantly, in the political sense, that of
> Kalecki's analysis of 
> the impossibility of sustained full employment under
> capitalism. As 
> he put it, if workers aren't under any meaningful
> threat of "the 
> sack," they'll get to militant - they'll become
> unmanageable, their
> wages will rise, profits will fall, and all the
> lines of class 
> authority will wither. That's the political point
> behind all the 
> orthodox eocnomists' worry about NAIRU.
> 
> Doug

But that's whole different issue, isn't it?  Keynes
showed the economic mechanism by which a monetary
authority could ensure low or no unemployment.  But
the political issue of unemployment (uppity workers,
etc.) is quite separate from the economic question.  

But here's the real question: while Keynes's
recomendations were never adopted wholehaearted, for
several decades after WWII, the were adopted enough in
most of the west to allow virtually no unemployment. 
Then, right about the time Nixon claimed that everyone
was a Keynesian, it seems the ruling class lost it's
faith in Keynesian solutions, and unemployment started
to rise.

So what happened?  Did the ruling class just decide
that it could no longer afford full employment, or did
the experience of the seventies (when the conventional
wisdom had it that "Keynesian solutions failed") make
them fall back on neoclassical ideas about "sound
finance" that they never had real stopped beleiveing
anyway?  Are the ruling classes evil (in knowing how
to prevent unemployment, while choosing not to in
order to increase their power) or just stupid?

Jim Baird

Doug, you seem to attribute every economic policy 

__________________________________________________
Do You Yahoo!?
Get email alerts & NEW webcam video instant messaging with Yahoo! Messenger
http://im.yahoo.com