Unemployment and Keynes

["RICHARD P.F. HOLT" <holtri@xxxxxxxxxxxxx>]

I just finished reading Bob Heilbroner's review of Skidelsky's second
volume biography of Keynes in NYR, March 3, 94 and amazed as usual
with Heilbroner's insights. And equally amazed except for John Cornwall
and Paul Davidson that people at the EEA meeting did not take up the
important issue that Heilbroner concludes the article with. Let me quote
what he says:
" Today in many centers of high theory, Keynes's economics is barely
noticed. High  theory in economics these days goes by many names --
Monetraism, Rational Expectations, New Classical Economics, even
"New" Keynesian economics, which bears little resemblance to the old.
Yet, along with a few other restive souls, I am not so certain that
Keynesianism is dead. As I look at the economic landscape abroad as well
as at home, it seems to me that we are in a state of persisting
*unemployment* resembling the 1930s, although it is much less dire
because we have a "Keynesian" financial support system in which government
provides almost 20 percent of total spending, compared with less than 10
percent in the 1930s. The difference,as I see it, is that the persisting
unemployment of today, both in its orgins and implications, appears unlike
the ailment that Keynes thought could be remedied by "a somewhat
comprehensive socialization of investment."
Will the Keynesian economices provide a way out? Not the economics
of _The_General_Theory_, which is too much directed to a world differently
organized from that of today. Keynes's contribution to our times is
therefore more likely to derive from the spirit of his economics, not
its theoretical analysis." p.9

Everyday I read in the New York Times of the phenomenon of the world's
unemployment rate and the persistent high unemployment rate in the
United States something that's predicted to continue. And yet, many of
the papers at the EEA focused on the different "centers of hight theory"
that Heilbroner mentioned or the difficulty of the government debt, the
fears of  setting inflationary pressures or the problem of government
spending to remedy the unemployment, etc. Only in a few cases did I
hear someone mention that we are reaching unemployment levels in the
world that are at crisis levels besides trying to come up with what
Heilbroner says: "an economics that projects a moral vision along with
a technical diagnosis comparable in its power to that of the _General_
Theory_."  Is high unemployment no longer a concern for economists
these days?
-Ric Holt