Re: German real wages in the Depression\Classical Views

[Jim Devine <jdevine03@xxxxxxxxx>]

On 6/8/05, Paul wrote:
> The student either misunderstood or mis-communicated (after all, remember
> Kalecki). ...
> 
> 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.)

This seems to be the idea that if wages fall enough, it restores
profitability and thus spurs accumulation. I argue against this as a
universal rule. Rising profits in a severe recession can make
underconsumption problems worse.

> Heaven help us all from former students.

I once met a former New School student (a job applicant at Occidental
College, BTW) who seemed to be in transition from the Marxian theory
of unproductive labor to the _laissez-faire_ view that the state is
essentially unproductive and needs to have its role minimized...
 
-- 
Jim Devine
"Segui il tuo corso, e lascia dir le genti." (Go your own way and let
people talk.) -- Karl, paraphrasing Dante.