Re: Keynes and the balance of payments (1946)

["Dr. Bruce McFarling" <ecbm@xxxxxxxxxxxxxxxxxxx>]

I can not follow this section at all:

[Passage quoted]
> "the contribution in terms of the resulting social strain that the
> debtor country has to make for the restoration of equilibrium by
> changing its prices and wages is altogether out of proportion with to
> the contribution asked of its creditors"

[Esteban Perez <eperez@xxxxxxxxxxxx>]
> It is the same thing. There is an assymetric adjustment. The
> assymetry is not brought about by policy. It may actually be a
> structural feature of the economies, even of the international
> system. Debtor countries do not have a choice: their adjustment
> is compulsory. It is same story today.

How are the structural features of the international system
not brought about by policy?  Isn't that what the larger
debate is *about* ... what features should be instituted
for the international system?

I do not see how Keynes' proposal is a return to placing the
full burden of admustment on debtor countries, which is the
pragmatic implication of policy decisions that make sense
when labouring under natural market system illusion.

It must be recognised that critiquing a system that ends
up placing all of the burden on the debtor nations as
theoretically poorly grounded does not thereby imply
that the only theoretically well grounded policy places
all the burden on the creditor nations.  That is the
fallacy of the excluded middle combined with removing
proof from a conclusion does not disprove the conclusion.
And critiquing a theory that supports price and wage
adjustments as the only effective instruments does not
imply that price and wage adjustments may not play an
ancillary role in a system with better theoretical
grounding ... excluded middle, again.

But mostly what confuses me above is the use of the
term "policy" above, that somehow leaves the
international system above the policy arena, when it
has been such a prominent feature of PK international
economic policy debates.