Re: Marx and Keynes on Unemployment

[BILL MITCHELL <ECWFM@xxxxxxxxxxxxxxxxxxx>]

>ajit [now enjoying the warmth of autumn in OZ!] wrote to paul:
>>This does not mean that one is
>>claiming that capitalism is a non-monetary system or that wages are paid in
>>real terms etc. It only means that theoretically the whole analysis could be
>>conducted in real terms without a recourse to money. (So there you go Claudio
>>Sardoni!).
>
Claudio replied, somewhat disturbed:

>I do not understand how a monetary economy can be analyzed without recourse
>to money. Unless you behave as Keynes said neoclassical economists behaved:
>let us pretend that there is no money even though we know that money exists.
>
bill says:

maybe the wording was a little loose in ajit's initial point. the point paul
was making was that you have to see unemployment as a consequence of money and
its special properties (zero elasticity of production and zero elasticity of
substitution for liquidity purposes). Paul says
"it is the existence of these two elasticity properties that creates the
possibility of underemployment equilibrium in monetary economies" (p.195 PKMT)

(not with some aghast that i have just quoted from paul's text book. I took
notes before i sent it back to the publishers!!).

and i agree fully with paul on this point. but that is only one source of
unemployment in a _*capitalist*_ economy. of-course paul denies the specificity
of the capitalist economy. but the sort of unemployment that is caused by
recourse to money balances as a safe haven when people are uncertain about
interest rate changes and other things in general, the sort that keynes talked
about, and which is intrinsic to a monetary economy is perhaps described as
cyclical unemployment.

But in a capitalist economy where the goal of the capitalist is accumulation
another source of unemployment is always possible (inevitable). this might be
the technical unemployment where capitalists strive for higher K/L ratios to
minimise the reliance on buying labour power. this sort of unemployment is not
due to uncertainty about the future, or mistakes about expected outcomes, or
the use of money as a safe haven. it is part of the internal dynamic of
capitalism which exists separate in logic to the sources of periodic crises.

i think that was ajit's point. not to pull a neutral veil over the analysis.
rather to separate the uncertainty-money issues (which might exist in any sort
of entrepreneurial economy where real commitments have to be made before
realisation) from the class issues (which are specific to capitalist
production).

kind regards
bill
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