I wrote:
FWIW, some Marxists advocate a self-correcting recovery [theory] like this, though
it's not just concerning wages. It also involves mass bankruptcies of
usually-smaller capitalists.
Paul writes: > But WHO, in the last half
century, do you think actually says this? (serious question). I mean truly
"advocate a self-correcting recovery", as distinct from saying "this
downturn won't go on forever but if the recovery is left to its own devices
we could lose decades, waste hundreds of trillions and spoil hundreds of
millions of lives - we must turn to alternatives now". Mentally, I have
tried to run through the list of "crisis theories" popular in the last 50
years and I worry that one may be setting up straw men.
The only case I can think of is Hilferding. Mattick (Senior) has a
critique of Keynesianism that sounds like K-ism just doesn't work,
doesn't he?
But how best should we describe the "business cycle" experience of the last
100 years?...
Now let's look at the direct alternative to 'built in' mechanisms
accounting for the upturns - i.e. "voluntarism". The "pure" post-keynesian
explanation relies on government fiscal/monetary policy as accounting for
upturns - nothing inherently structural caused the problem or provides the
solution. Future crises have a ready remedy - clever, committed government
using only judicious fiscal/monetary policy *without* a requirement for
deeper structural change.
Perhaps neither "pure automaticity" nor "pure voluntarism" adequately
covers all post-war experience - nor represents a tenable political
position? And in diagnosing causes and solutions, I think we need to make
clear distinctions between so-called short run fluctuations and the long
trends and structural problems. (The short run problems may be more
susceptible to *either* "built in" or "policy based" corrections than the
deeper trends.)
I think that there's a plausible story of Keynesian economics of the
following sort:
(1) in the short run (say, 5 years) Keynesian fiscal or monetary
stimulus can work in many or most situtations, whether it's automatic
or discretionary. This may even be class-neutral or pro-working class
(though this is rare in the US).
(2) however in the long run, Keynesian stimulus can lead to an
accumulation of imbalances (e.g., excess fixed capital, excessive
debt) that depresses the long-term growth path, unless the costs are
shoved onto the working class.
JD