Re: Conference on Saving and Investment

[Doug Henwood <dhenwood@xxxxxxxxx>]

As one of the Marxian-themed who visit this list, I want to agree that
acceptance of NAIRU doesn't make you a barbarian. One shouldn't make too
much of a fetish of its exact level - as circumstances vary it could
range from 3% to 8%, who knows? - but I think the principle that
capitalism can't live for long with full employment is a sound one.
Otherwise the working class would get too uppity, profits would be
squeezed (or inflation would rise as capital tried to maintain
profitability), and investment would collapse.

Doug

Doug Henwood [dhenwood@xxxxxxxxx]
Left Business Observer
212-874-4020 (voice)
212-874-3137 (fax)


On Tue, 26 Apr 1994, Allin Cottrell wrote:

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