Re: The Long-Term Problem of Full Employment (was German real wages in the Depression)

[tom walker <lumpoflabour@xxxxxxxx>]

Jim Devine asked:

> what are the assumptions of Keynes' "model" that he
> uses to predict an
> excess of saving and to derive his policy
> recommendations? is he
> following Alvin Hansen's version of stagnationism?

I don't really understand your first question. His
assumptions presumably had to do with experience of
recent history -- the post WW I transition and the
depression -- and the idea that he was not engaged in
some academic exercise. But according to Michel
Camdessus, Richard Layard, Paul Samuelson, Jennifer
Hunt, Gilles Saint-Paul, Timothy Taylor etc., etc.,
Lord Keynes' assumption, at least regarding phase iii,
was the fallacious one that there is only a fixed
amount of work to be done.

By the way, I've found a third instance (p. 276, April
15, 1942) of Keynes' apparently quite adamant view
that reducing the hours of work was one of three key
strategies for taking up the slack of unemployment,
namely: "(a) doing less work (b) consuming more and
(c) increasing gross investment."

I'm not saying that Keynes was "right" because he is
some kind of ultimate authority or something. What I'm
saying is that this unmentioned (or unmentionable)
aspect of his thought is intriguing in light of the
anti-reduced work time ideology that prevails in the
neoclassical orthodoxy.

Instead of sneering at "a widespread popular belief"
or "left wing kooks", those who invoke the claim that
the expectation of employment gains through reduced
work time is based on a fallacy could perhaps more
constructively engage the specific recommendations of
a Keynes (or a Pasinetti or a Commons or a Leacock or
a J.M. Clark). Otherwise those critics of shorter work
time just look like cowardly bullies who are afraid to
pick on someone their own size (or bigger).

The Sandwichman

__________________________________________________
Do You Yahoo!?
Tired of spam?  Yahoo! Mail has the best spam protection around
http://mail.yahoo.com