Re: Keynes and the BP. 2 part. (1946)

["Esteban Perez" <eperez@xxxxxxxxxxxx>]

2nd and last part to the reply to Ted Winslow. Part of the previous message did not go through.
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5.	In the GT. P.349 : ¨It is the policy of an autonomous rate of interest, unimpended by international preoccupations, and of a national investment programme directed to an optimum level of domestic employment which is twice blessed´ and p.322: ¨The right remedy for the trade cycle ...in abolishing slumps and thus keeping us in a quasi-boom¨.

6.	The need for bouyancy is emphasized again in Keynes´proposals for an ICU (Vol. XXV) p.180: ...there is great force in the contention that, if active employment and ample purchasing power can be sustained in the main centres of the world trade, the problem of surpluses and unwanted exports will largely disappear¨. His proposal require that debtor countries (more specifically countries that have a debt that is greater than half of their quota) adjust by : paying its debt in gold, capital controls, devaluation and internal policy measures to achieve equilibrium in its balance of payments.

7.	 In Vol XXVII, p.445: Keynes mentions the Proposals for Consideration by an International Conference on Trade and Development...¨expressly directed towards creating a system which allows the classical medicine to do its work¨.

8.	In his letter to Hicks (CW, Vol. XIV p.79) Keynes explicitly referred to the classical doctrine (same term as in Moggridge´s notes. Note, that I am not referring to classical theory or classical economist but to the classical doctrine). The classical doctrine is basically money determines prices and real variables are determined by real forces: the dichotomy between real and monetary.  Yes classical medicine means relative price adjustment.

9.	Regarding the similarity between Keynes and Smith´s Moral Sentiments, doesn´t Smith require a sense of objectivity that is quite removed from Keynes thought?. For example p.109-110 Liberty Classics edition, ¨We either approve or disapprove...according as we feel that, when we bring his case home to ourselves, we either can or cannot entirely simpathize with the sentiments and motives which directed it ...when we place ourselves in the situation of another man...we can never form any judgement...unless we remove ourselves as it were, from our own natural station ....to view them at a certain distance from us. But we can do this in no other way than by endeavouring to view them with the eyes of other people, or as other people are likely to view them...We endeavour to examine our own conduct as we imagine any other fair and impartial spectator would examine it¨.
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