International Keynesian Possibilities

["John Gelles" <johng@xxxxxxxxxx>]

"Keynesian ideas should be injected into international
economic policies, international financial architecture,
etc.  ..."
    -- Gernot Kohler, reflecting on the difficulty of
         popularizing PKT in nations with substantial
         exposure to globalization


        Keynesian-Lerner money, which many of us hope can
        be used to stimulate full employment and production to
        raise minimum living standards (via a living wage that gets
        better every year), is a national legal thing -- related to
        national laws of contract and debt enforcement.

        Gernot shows that hard money has power across
        borders. He wonders if Keynesian money can be
        effective in meeting some of the challenges of today's
        hard-money based global trade. The challenges are:
        exploitation of labor and ruin of the environment.

        Gernot wonders how treaties might take advantage
        of Keynesian principles. It seems to me IF we had
        a national Keynesian program that worked -- in any
        prosperous place -- ANY treaty that place made
        would disclose the techniques Gernot seeks.

        Without any nation committed to a Keynesian program,
        it is hard for me to see how several nations could find
        a regional or global approach to our, so called, "non-
        neutral" money.

        What we call Keynesian or Keynesian-Lerner money
        is also called "non-neutral" money.  By non-neutral,
        we mean that money is not just a means of exchange
        for goods and services. It is also a catalytic agent that
        can facilitate production which will later justify the use
        of money that starts as a promise to be "good as gold"
        -- when it is really only paper or an account with no
        commodity or collateral value at all.

        In all events, I believe Gernot is right to observe how
        hard it is to use K. money ideas in nations tied to global
        trade.

        Especially hard it is BECAUSE no one is really using
        K. money for full employment -- anywhere.

        Nations like the US use fiscal and monetary policy in
        ways that resemble Keynesian principles. But they also
        use mostly hard money backed by existing collateral.

        And in actual banking and trading practice the details
        of the law are so formidable there may be nobody able
        to explain to academics, politicians or the voters, of any
        nation, just what we need to do to return to the way we
        financed wartime needs without losing our freedom
        from 1939 to 1945.

            John G.

====== Gernor's comment above prompted by: =====

        Message  To: PKT 23 April:
            From:   John Gelles
        Subject:    Keynesian thought -- what is it for?

        Why Keynesian thought?  Why not "admit" the
        American economy works just fine as it is?  We
        Keynesians wanted less than five percent
        unemployment. We have it. We wanted less
        disparity. Now that dot.com guys are poor, we
        have it. What is it that Keynesian thought offers
        that other economic thought does not?

        ... <snip> ... [original message in PKT
        proceedings for April 2001