Re: German real wages in the Depression\Classical Views

[Jim Devine <jdevine03@xxxxxxxxx>]

me: :
> >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.

On 6/8/05, Paul  wrote:
> Right, IF that were a universal logic (total wages down, total profits up,
> long term accumulation resumed, end of story) it would be a neo-classical
> self-correcting business cycle theory, not a classical theory.

FWIW, some Marxists advocate a self-correcting recovery like this,
though it's not just concerning wages. It also involves mass
bankruptcies of usually-smaller capitalists.

> But I also wouldn't buy the converse *as a universal logic* (total wages
> up, profits down, long term accumulation resumed, end of story).  A "pure"
> Keynesian story.  Although it could be true in a particular circumstance,
> at a particular time.

Although I agree with the last sentence, I don't understand the first
sentence or why it's Keynesian. A Keynesian story would likely have
both wages and profits up, leading to recovery.

BTW, I have a conditional story of the cycle that was published in the
REVIEW OF RADICAL POLTICAL ECONOMICS in 1983. I've attached a jpg file
of it.


-- 
Jim Devine
"Segui il tuo corso, e lascia dir le genti." (Go your own way and let
people talk.) -- Karl, paraphrasing Dante.

Attachment: over-inv.JPG
Description: JPEG image