Brad DeLong wrote: > The question remains. Given the absence of commercial crises and depressions > in the AMP and the FMP, why wouldn't replicating the building of cathedrals, > the building of aqueducts, or the conquest of Gaul stave off the crisis and > so allow capitalism to engage in stable, balanced growth? > > Lenin writes that the conquest of Gaul does--but eventually you run out of > Gauls. But that doesn't explain why the public sector can't stabilize things > via non-military Keynesianism. To my knowledge Marx never provided an > answer--but he was damned sure it wouldn't...
That Lenin, such a clever guy! (and where was it that Marx criticized fiscal stimulus?) In broadly-defined Marxian theory, as far as I can remember, the main problems with Keynesian policy include: 1) capitalist political opposition to anything that competes with the "private" sector, so that only military-type government spending or pyramid building-style waste is acceptable (Baran & Sweezy). Of course, if working-class organization and consciousness are strong enough, this kind of political opposition can be trumped (at least temporarily), producing social democracy of the sort that prevailed after WW2 in W. Europe. The US warfare/welfare state is a milder version of that system. 2) the capitalist opposition to persistent full employment because it strengthens labor (Kalecki). Of course, if labor relations can be changed, persistent FE can be tolerated. This can involve fascist force (as in Kalecki's article) or social democracy (as in Sweden for a long time). Again, that requires working-class political action. 3) the capitalist problem of over-accumulating fixed capital, which reduces the rate of profit (Kalecki, Mattick). Keynesian policies can raise the rate of profit by decreasing the turnover time of commodities (see CAPITAL, volume 2 if you dare!), realizing profits, and raising the Profits/Income ratio but there are limits there. If fixed capital has been over-accumulated, that depresses the income/fixed capital ratio. In turn, when the economy is at potential, the rate of profit (Profits/fixed capital) is cannot be raised further and so remains depressed. What's needed is the destruction of the excessive fixed capital either by allowing a deep recession to occur or via war. (this is based on my article in the JEBO, in which it is synthesized with the next one.) 4) under capitalism, persistent full employment tends to lead to increasing financial leverage and fragility (Minsky). This would require either allowing financial crises to occur or significantly regulating finance. Given the massive political power of the financiers these days, again massive counter pressure is needed. (Was Minsky a "Marxist"? It doesn't matter, since his theories can be fit into a broadly Marxist framework without losing anything.) 5) capitalism is a global system, so that Keynesian policies must be global. The world state -- a.k.a., U.S. hegemony -- seems strong enough for now to impose fiat money (the US$), but it's not strong enough to engage in fiscal or monetary policy. None of this says that Keynesian stimulus can't happen or won't work. (In my JEBO article, such stimulus can deal with deep depressions. But it fails to solve the business cycle, as in Mattick and Minsky.) But it's unlikely. Given the fact that the capitalists dropped social democracy like a hot potato once the Soviet Threat went away, #1 and #2 seem extremely unlikely without a lot of hard political work. Allowing crises to happen (one response to #3 and #4) simply fits with Marx's view of capitalism as inherently crisis-prone. So does the idea of solving problems via war. Strict financial regulation seems unlikely unless there some political counter-force to neuter the financiers' power. It might be industrial capital, but that's pretty weak in the U.S. these days and we'd likely have to have an even bigger version of 2008 to get it mobilized politically against finance capital. They would likely need massive working class unrest to give them backbone. gotta go. No more pen-l until tomorrow. -- Jim Devine / "Segui il tuo corso, e lascia dir le genti." (Go your own way and let people talk.) -- Karl, paraphrasing Dante. _______________________________________________ pen-l mailing list [email protected] https://lists.csuchico.edu/mailman/listinfo/pen-l
