Re: German real wages in the Depression

[tom walker <lumpoflabour@xxxxxxxx>]

Jim Devine wrote:

> are you talking about the idea of the euthanasia of
> the rentiers and
> the increase in so-called leisure? if so, the
> various Keynesians have
> totally ignored this and see them as examples of
> Keynes's foibles.
> Maybe Joan Robinson was positive.

I'm talking about the 1943 note "The Long-Term Problem
of Full Employment" (and the similarly themed letter
to T.S. Eliot) that I previously posted under the
heading "Keynes: 'Less work is the ultimate solution'"

But how can you "totally ignore" something and yet
"see them as... foibles"? If I totally ignore an
elephant, I don't see it as cheshire cat -- I totally
ignore it. And this particular elephant is rather
large. Gigantic. Elephantine. It consists of some
adamant statements late in his career and life that
have a direct bearing back on the General theory. They
either elucidate the theory or they confuse things.
They are not, under any circumstances, 'neutral' or
inconsequential.

In case you missed the original posting, I'll repeat:

"4. After the war there are likely to ensure [sic]
three phases--
"(i)...
"(ii)...
"(iii) when investment demand is so far saturated that
it cannot be brought up to the indicated level of
savings without embarking upon wasteful and
unnecessary enterprises...."

"10. As the third phase comes into sight [say 10-15
years after the end of the war], the problem stressed
by Sir H. Henderson begins to be pressing. It becomes
necessary to encourage wise consumption and discourage
saving, --and to absorb some part of the unwanted
surplus by increasing leisure, more holidays (which
are a wonderfully good way of getting rid of money)
and shorter hours."

(May 25, 1943)

>From "The Long Term Problem of Full Employment" in The
Collected Writing of John Maynard Keynes, vol. 27, p.
320-325.

In a subsequent exchange of correspondence with Sir
Wilfred Eady, Keynes becomes noticably irritated with
the notion, put by Eady, that his note on full
employment is a "voyage in the stratosphere". "For, if
the argument which I have tried to bring into the open
in my paper is not understood by those responsible,
they are understanding nothing whatever."

The same volume contains a letter two years later
(April 5, 1945) to T.S. Eliot in which Keynes
reiterates plainly his point about the role of shorter
hours in maintaining full employment:

"...the full employment policy by means of investment
is only one particular application of an intellectual
theorem. You can produce the result just as well by
consuming more or working less. Personally I regard
the investment policy as first aid. In U.S. it almost
certainly will not do the trick. Less work is the
ultimate solution (a 35 hour week in U.S. would do the
trick now)."

The Sandwichman

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