Two from Brad

[Brad DeLong]

>  >Nah. Kalecki thought that labor unions and workers were >too dumb to
>>notice that they needed cost-of-living increases. We think >they're
>>smarter...
>
>I'm reading the original General Theory at the moment, and Keynes
>(therefore presumably Kalecki) seems to have a decent couple of arguments
>why labour unions shouldn't be bothering to fight for cost-of-living
>increases ...  yeh, here it is ...
>
>"Thus it is fortunate that the workers, though unconsciously, are
>instinctively more reasonable economists than the classical school,
>inasmuch as they resist reductions of money-wages, which are seldom or
>never o an all-round character, even though the existing real equivalent of
>these wages exceeds the marginal disutility of the existing employment;
>whereas they do not resist reductions of real wages, which are associated
>with increases in aggregate employment and leave relative money-wages
>unchanged, unless the reductio proceeds so far as to threaten a reduction
>of the real wage below the marginal disutility of the existing volume of
>employment. Every trade union will put up some resistance to a cut in
>money-wages, however small. But since no trade union would dream of
>striking on every occasion of a rise in the cost of living, they do not
>raise the obstacle to any increase in aggregate employment which is
>attributed to them by the classical school."

Yes. I've always been intrigued by the theory that standard Keynesian 
demand-management failed as a strategy for economic regulation when 
inflation became sufficiently salient that unions *did* dream of 
striking whenever they found their cost-of-living causes insufficient.

Now, this is not because I buy the Von Misesian argument implied by 
Doug Henwood that Keynesian full-employment policies are primarily a 
secret way of redistributing real income away from workers...

Brad DeLong