Re: International Keynesian Possibilities

["J. Barkley Rosser, Jr." <rosserjb@xxxxxxx>]

     This depends on what one is talking about.  Is
one referring to more generalized "Keynesian"
fiscal or monetary policies, or is one talking
about the more direct kinds of intervention
such as incomes policies that have been more
specifically associated with Post Keynesian thought?
     I would submit that we are more likely to see
the latter in highly globally exposed economies.
The Scandinavian countries and Austria and the
Netherlands are those that come to mind.  All of
these are very open, with almost zero protectionism
and high percentages of their GDP exported.  They
are also at the high end on measures of "corporatism"
economy-wide wage bargaining, one form of
incomes policy.
      Of course there is another variable entering in
here.  It is easier to carry out such policies in somewhat
smaller and more homogeneous countries, which these
all are.  That correlates with being highly open.  Thus,
although it may be harder to carry out Keynesian
fiscal or monetary policies in a highly open context
(especially when your trading partners are not doing so),
it is not at all the case that other PK policies are unlikely.
Indeed, in the case of Sweden the motivation for such
bargaining was very much driven by the perceived need
to keep inflation under control and to not have wage
increases exceed labor productivity increases in the
all important export sector.  So, openness may actually
stimulate incomes policies.
Barkley Rosser
----- Original Message -----
From: "John Gelles" <johng@xxxxxxxxxx>
To: "Post Keynesian Thought" <pkt@xxxxxxxxxxxxxxxx>
Cc: "Gernot Kohler" <gkohler@xxxxxxxxxxxxx>; "1944" <1944@xxxxxxxx>
Sent: Wednesday, April 25, 2001 5:09 AM
Subject: International Keynesian Possibilities


> "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
>
>