Charles is right about that. Obama's policies more closely resemble those followed by Herbert Hoover rather than those followed by FDR. An unabashed Keynesian would criticize Obama for not directing enough of his spending to lower income people, who, according to Keynes, would have a higher propensity to consumption than more affluent people.
All this would seem consistent with Kalecki's political economic analysis, according to which we would expect government spending to follow this course it has been, so far, under the Obama Administration. Presumably, things are not likely to change much unless the Federal government begins to feel the heat of working class insurgency as was the case in the US by the time that FDR became president. Jim F. ---------- Original Message ---------- Yes, however they are not _Marxist_ underconsumptionists (smile) Also, they gave a lot more to Wall Street, which is "supply-side". On 11/18/09, Paddy Hackett <rashe...@eircom.net> wrote: > > > > Obama, the Fed and the Treasury are underconsumptionist as is, to a degree, > Western Europe. The massive injection of billions of dollars into the > economy is an expression of underconsumptionist ideology. But this merely > helps postpone the judgment day. The capitalist needs an unprecedentedly > deep slump. By these unprecedented injections the slump has been postponed. > But the problem has not been solved. Washington has created another bubble > type phenomenon. The problem is that there may not be enough gas to blow up > to the previous dimensions --a floppy bubble. This is something I am not > qualified to answer. Washington has simply done what the Fed was doing under > its last boss. Propping up the system "artificially" by providing more > apparent spend. > ------------ > > > > > Those Marxists like Michal Kalecki > or Paul Sweezy (under the influence > of Keynes) who embraced the > underconsumptionist thesis did not > hold that capitalist states would > automatically adopt looser fiscal > and monetary policies in order to > stop or even to prevent economic > downturns. On the contrary, they > held that capital would be quite > resistant to the general adoption > of such policies because they would > undermine the political power and the > social status of capital. > > Kalecki, for instance, argued that > under normal circumstances, capital > would be resistant to the adoption of > Keynesian-style full-employment policies, > even if it was manifestly clear that such > policies would boost business profits. > That's because, according to Kalecki, > such policies would less the social > status of businessmen and weaken their > political power. Capitalists, in Kalecki's > opinion, feared the loss of social status > and political power even more than they > feared the loss of profits. Hence, > their tendency to form political > alliances with rentiers (whose incomes > would be directly threatened by such > policies) in order to oppose > full-employment policies. See > his famous 1943 paper, "Political > Aspects of Full Employment" can > be found online here. > > http://tinyurl.com/ykxusra > > Paul Sweezy echoed Kalecki's > arguments in his early book, " > The Theory of Capitalist Development." > Later on, both Kalecki and Sweezy > pointed out how, what may be called, > military Keyensianism provided a way > to make Keynesianism work in a way > that would be acceptable to capitalists. > > That of course is not to say that > the underconsumptionists were necessarily > correct, but rather to point out > that Marxist underconsumptionists > do not accept the thesis, that even > if Keynesian economic analysis is > basically correct, that we can ever > expect capitalist states to use the > tools of fiscal and monetary policy > to balance out the business cycle. > In their view, the class interersts > of capital militate against this > happening over the long term. > > Having said that it must be admitted > that the Keynesian influence on Sweezy > has always been a bone of contention > for other Marxists. Back in the late > 1960s, Paul Mattick wrote a critique > of Keynesianism, in which Sweezy, > was at least by implication, one of > his targets. Marc Linder et al. > in their book "Anti-Samuelson," > while primarily (as the title > suggests) targeting Paul Samuelson's > brand of Keynesianism, also took > time out to critique Sweezy > precisely for his Keynesianism. > And more recently, James Heartfield > has simiarly criticized Sweezy > > Jim Farmelant > > ---------- Original Message ---------- > From: "Paddy Hackett" <rashe...@eircom.net> > To: <marxism-thaxis@lists.econ.utah.edu> > Subject: [Marxism-Thaxis] The SWP and underconsumptionism > Date: Wed, 18 Nov 2009 09:50:38 -0000 > > > > "Myth 2: But the government has to borrow over ?20 billion and so cutbacks > are necessary. If we don't take the 'hard medicine' now, it will be worse > later. > > The huge government deficit is a symptom but not the cause of the crisis. > Before 2007, for example, there was no deficit as government revenue was > ?65.1 billion and spending was ?64.6. The economic crash has wiped out many > tax revenues. VAT rates have fallen; PAYE taxes are down, property taxes > tumbled and more is being spent on social welfare payments. But the cutbacks > have made matters worse. You can see this easily through simple figures.In > October 2008, the government claimed that the budget deficit would rise to > 6.5 percent of GDP and that cutbacks were needed. But in January 2009, the > budget deficit had risen to 9.5 percent - and so more cuts were demanded in > an April budget.Yet, after all these rounds of cutbacks, the budget deficit > has now risen to 13 percent. In other words, all the sacrifices have been > wasted because the debt is even higher. > > The reason why this occurs is simple. If personal consumption is already > depressed through unemployment and wage cuts, reductions in government > spending only add to the slow down in the economy. There is even less money > to go around and a spiral of economic depression sets in. So instead of > digging a deeper hole, we need to embark on a jobs programme that puts > people back to work" > > The above argument was recently written by Kieran Allen and published by the > SWP. It is based on underconsumptionist assumptions. The underconsumptionist > ideology suggests that economic downturns are caused by a lack of demand. > This means that the solution to the problem are increases in demand and > thereby consumption. This, it is believed, increases demand which in turn > leads to increased commodity production. Increased production means an > increase, generally speaking, in the creation of value and thereby economic > growth. > > If this theory is correct it means that capitalism never need experience > economic downturns. To prevent recessions all that is needed is continuous > increases in demand (or consumption). If this theory is correct there is no > need to abolish the law of value and create a communist society. > > Falling demand during an economic downswing is caused by the overproduction > of capital which manifests itself in the overproduction of commodities such > as houses, building materials, household goods, cars etc. This > overproduction is caused by falling profitability. Falling profitability is > a product of the failure of capital to compensate for the fall in the > general rate of profit by increasing the volume of surplus value. Capital > can only overcome its crisis of overproduction by increasing the rate of > surplus value through the devaluation and even destruction of capital while > pushing the price of labour power below its value. This has to be done on a > scale large enough to increase the general rate of profit so that there is > growth in total surplus value. Success here means that as the general rate > of profit rises profitability starts to rise. Under these new conditions > production of commodities begins to increase. Recovery sets in and the cycle > gets underway leading to recovery, boom and bust which is ultimately takes > things back to the overproduction of capital again. The problem is located > within the capitalist production process and not in the circulation process > as Kieran implies. In order to bring to an end economic crises the > production process must be transformed. This means that the capitalist > production process must be abolished and replaced by a process of production > liberated from value relations. > > > > ____________________________________________________________ > One Up the Competition > Earn your MBA from Post University. Free textbooks for new students! > http://thirdpartyoffers.juno.com/TGL2141/c?cp=tG50uAgPzKqK6ySKMuRvcAAAJ1CYA6xXIFl5_AmY7DDiMj1vAAQAAAAFAAAAADFFXD4AAAMlAAAAAAAAAAAAAAAAABIhWQAAAAA= > > > > _______________________________________________ > Marxism-Thaxis mailing list > Marxism-Thaxis@lists.econ.utah.edu > To change your options or unsubscribe go to: > http://lists.econ.utah.edu/mailman/listinfo/marxism-thaxis > _______________________________________________ Marxism-Thaxis mailing list Marxism-Thaxis@lists.econ.utah.edu To change your options or unsubscribe go to: http://lists.econ.utah.edu/mailman/listinfo/marxism-thaxis ____________________________________________________________ Manufacturer-Direct Hardwood Floors Never pay retail again. Wholesale prices on all hardwood floors! http://thirdpartyoffers.juno.com/TGL2141/c?cp=B7OR7yAxEfylWXVkN5M-ZAAAJ1AP8ttsZd_TbiVxkZxsC3mBAAQAAAAFAAAAADkQ1z4AAAMlAAAAAAAAAAAAAAAAAANldAAAAAA= _______________________________________________ Marxism-Thaxis mailing list Marxism-Thaxis@lists.econ.utah.edu To change your options or unsubscribe go to: http://lists.econ.utah.edu/mailman/listinfo/marxism-thaxis
