Re: Conference on Saving and Investment

[Allin Cottrell <cottrell@xxxxxxxxxxxxxxxxx>]

A question for Paul Davidson: Why does acceptance of the notion
of a NAIRU -- as opposed to a so-called "natural" rate of unemploy-
ment -- show that the party in question has failed to absorb the
message of Keynes's General Theory?  Is it part of the message of
the General Theory that unemployment can be reduced to an arbitrarily
low rate without any acceleration of inflation?  I thought that Keynes
reckoned, in the late 1930s, that getting the rate of unemployment
down to 8 per cent would be speeding, and anything less than that
likely to be inflationary.

To harp on the Marxian theme that surfaces in pkt once in a while,
it seems to me that there is indeed a NAIRU -- and it might be
quite high -- in the capitalist economy.  Genuinely full employment
combined with the absence of inflation requires a radical change in
the mode of distribution of income (which in turn probably requires
a radical change in property relations).

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Allin Cottrell
Department of Economics
Wake Forest University
cottrell@xxxxxxxxxxxxxxxxx
(910) 759-5762
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