German real wages in the Depression\Classical Views

[Paul <paul_@xxxxxxx>]

The student either misunderstood or mis-communicated (after all, remember
Kalecki). But I also wouldn't conflate the "Great Depression" issue with
being "anti-Keynesian" since it depends very, very, much on what one means
by "Keynesian".  For example, there is a big difference between saying
"effective demand enters into all situations" vs. "the government can use
effective demand to solve all situations".  Perhaps she meant to say she
was anti-Keynesian in that sense.

1)      Sraffian/Classicals and Marxists do point out that in a
*theoretical* depression *theoretically* wages could go low enough and long
enough to correct a depression (by raising profits high enough, long
enough) -- BUT they would always add that even if that were the case the
level of wages and the lengthy damages required would be neither socially
nor politically acceptable.  (i.e. it is an expositional and not a policy
point.)

2)      For a clear and "representative" Marxian exposition see Dumenil &
Levy "Being Keynesian in the Short Term and Classical in the Long Term"
(Manchester School Dec 1999).  The tittle makes clear the view.

Shaikh's own similar views can found in his more mathematically demanding
paper "A Dynamic Approach to the Theory of Effective Demand" 1989 at the
Levy Institute
http://www.levy.org/default.asp?view=publications_view&pubID=f73a2063ac
Again, the tittle should say it all.  Rather than use the terms Short
Term/Long Term for the Keynesian/Classical adjustment processes, Shaikh
uses Fast Adjustment/Slow Adjustment Processes.  His point is that BOTH
processes are happening at the same time and interacting with each other.

Shaikh also expresses these views in "Accumulation, Finance and Effective
Demand in Marx, Keynes, and Kalecki" or in "Wandering Around the Warranted
Path"
http://homepage.newschool.edu/%7EAShaikh/harrod.pdf

Heaven help us all from former students.

3)      BTW, there are Post-Keynesians who argue for a degree of synthesis
with the Classicals and include some element of the profitability and the
long run.  The most well known was Joan Robinson (pre 1979).  Eichner,
Halevi and Kreisler are also examples; it was a growing trend before the
tide started running out on the whole school of thought.

        With such synthesized perspectives the discussion of a concrete
situation (such as the Great Depression) becomes of matter of relative
weights -- so concrete empirical analysis becomes important.  Even with
different starting points the two schools might agree on an analysis of a
specific situation.  Another reason for these schools to avoid overly
caricaturing each other.

Paul

Doug H., responding to Jim D. writes:

> Evidently. A certain kind of hardcore Marxist can be very
> anti-Keynesian. I don't know if Shaikh took this position, but his
> student sure did.
>
> Doug

> Jim Devine wrote:
>
> > On 6/8/05, Doug Henwood <dhenwood@xxxxxxxxx> wrote:
> > >  The Shaikh student was arguing that the depression would have ended
> > >  sooner had nominal wages been allowed to fall.
> >
> > never having studies J.M. Keynes or I. Fisher? assuming Say's Law?