Conference on Saving and Investment

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

>From Rich Parkin:
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Alli Cottrell wrote:

> 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).
>

In addition to a radical change in the mode of income distribution, genuine
full employment also requires a radical change in the organisation of
production.  As Kalecki realised in 1943, long run full employment is
unsustainable for "political" reasons; i.e., full employment reduces the
threat of dismissal.  As such redistribution _per se_, how ever desireable,
will not do the job so long it ignores conflict over the labor process.

None of this is to argue that the "NAIRU" is independent of demand management
policies.  As much of Western Europe shows, persistently running an economy
with 10% unemployment will raise the "NAIRU" (hysteresis).  A more accurate
term would be the "social and historical rate"...

	Rich Parkin
	Case Western Reserve
	Tropical Cleveland
	(216) 368-4294 (w)