Marx and Keynes on Unemployment

[John Gelles <jjgelles@xxxxxxxx>]

        On Sat, 29 Apr 95 Bill Mitchell wrote in answer to
        several questions (1 & 2, below), on what should be our
        standard employment and wage rate goals for the coming
        decade (when we criticize Marx and Keynes):

             1. Should they be equal to the best experience in
        Germany and Japan after 1960?

                  Mitchell wrote:

                  "the model for the future has to be very
        different to that of the last 35 years [in Germany and
        Japan]. we have to have full employment without a
        labour force framework and without material production
        being the benchmark for growth and gainful activity."

             Gelles responds:

             This is certainly clear and correct -- full
        employment -- I only wish every economist would assert
        this goal.

             You say, "Without material outputs as a primary
        benchmark to guide the system" -- again, a correct
        idea. To protect the environment, Bill and I would keep
        material outputs restricted to necessities and encourage
        other outputs, such as research and favorable progress
        in medecine and care of the planet, in place of all
        the junk sold to satisfy perverted tastes created by
        mass advertising and an irresponsible entertainment
        industry. I do not think tyranny would be associated
        with bonafide effort to move in this direction. Herbert
        Hoover, no tyrant, advocated responsible use of radio
        over its intense commercialization in mindless pursuit
        of money little different from other criminal activity.

                  Bill continues:

                  "i know you hate this sort of academic
        posturing, john, but dare i say the only hope is a non-
        capitalist system of environmental and human balance
        where the goals of the system are not the goals of the
        capitalist class."

             Gelles responds:

             So far, no posturing-- but I don't like the idea
        of a "capitalist" system.  We have a "decentralized",
        "democratic" system.  It is missing Keynesian money
        reform (the injection of zero-interest bond based money
        to buy improvements in infrastrucutre and environment
        and for full employment), and reforms in government
        administration to replace law suits with arbitration and
        income taxes with invisible taxes (as an element of
        Keynesian money for the sole purpose of maintaining its
        purchasing power).


             Gelles second question to which Bill replied was:

             2. Is the 1944 US proposed economic bill of rights
        proposal for an absolute right to a job and a fair
        wage, (say $24,000 a year, as a current minimum,) the
        standard PKTers should have in mind?

                  Bill wrote:

                  "you cannot legislate full employment in a
        capitalist system. have a read of Kalecki on the
        political business cycle. it is very clear on this
        point."

             Gelles says, as usual:

             You can and must do this. We have no capitalist
        system in the Constitution, or in fact.

             We have a system under which Congress is empowered
        to create money and determine and protect it value.
        Congress is charged to implement the preamble to that
        document -- establish justice, insure domestic
        tranquility and promote the general welfare.

             Kalecki may be right in his analysis of central
        banking as it is conducted in between major wars and
        major calamities. But Congress performs its full duty
        when it has to win a war, rescue deposits in savings
        institutions, or guarantee loans without borrowing at
        interest before doing so. These are not part of the
        system as you paint it.

             Congress must do substantially what Keynes has
        asked of government.  It will then have created a
        more effective "decentralized democratic" system. That
        system may resemble "capitalism", but it will never be
        any more than a legal construct. It will not be a
        necessary configuration and need not be anti-democratic.
        We are not prisoners of economic literature.

             (Bill's comment of the "right to have private
        right wing armies" is premature. There is no such
        right. Private armies will disband or be jailed --
        very soon. Perhaps it was Jackson, but one of our
        great Justices put it clearly -- "The Constitution is
        not a suicide pact." )


                  Bill's comments further: "It just goes to
        show that despite all the humdrum about the collapse of
        socialist thought given that a few corrupt slavic
        regimes finally hit the wall, the critical analysis of
        Marx and later in the same spirit Kalecki and Sraffa
        and on is still relevant and vital."

             "Sure," Gelles says, -- Cuban, Korean, Cambodian,
        German, Chinese and Vietnamese slavs.

             The truth, Bill, is contained in my post yesterday
        on Catch 23:  Argument sucks.  Only money can communi-
        cate and permit democratic decentralized economic
        activity, where independent decision making excludes
        the types of text-bound systems socialism relies on.

             Unfortunately, one argument remains -- over money
        itself. Only money works to empower the individual; but
        the kind of money we're using is not doing the job.
        To change over to the right kind gets us back to text
        and central consensus. We are stuck fast on Catch 23.

                  John Gelles