Hi Paul,
Thanks very much for your reply. Thanks also for your references to
these articles. It has been a while since I had read the Shaikh
articles, and I had never read the Moudud articles in the Levy working
papers. These articles are very interesting.
I will try to briefly summarize what I understand at this point to be
the major similarities and differences between these articles and my
interpretation of a Marxian analysis of expansionary fiscal policy
(based on Mattick). Your comments would be appreciated.
SIMILARITIES:
1. The rate of growth is determined primarily by business investment
decisions.
2. Investment spending is determined mainly by the rate of profit.
3. There are short-run positive effects of expansionary fiscal policy,
but negative effects in the long-run (more on this below).
DIFFERENCES
1. The rate of profit is determined according to Sraffas theory, not
Marxs theory. Now some would argue that these two theories of profit
are essentially the same, but as you probably know, I argue that they
are not the same.
2. A distinction is made between an increase in the LEVEL of
government spending (G) and an increase in the RATIO of government
spending to output (g = G / Y).
A continuous rate of growth of output is assumed.
If the increase in G is greater than the rate of growth (the increase
of Y), then the result is a short-run stimulus, but a long-run drag on
growth. This is similar to my conclusion.
On the other hand, if the increase in G is less than the rate of
growth, then the result is a short-run stimulus, without a long-run
drag on growth. This is contrary to my conclusion.
I dont know what to make of this assumption of continuous growth. It
seems to beg the question: does an increase of G result in an increase
of Y? I will have to go back and look at Kaldor again. What do you
think?
3. The long-run effect of expansionary fiscal policy on the rate of
profit is not analyzed at all. Indeed, it is assumed that the rate of
profit remains constant, so that expansionary fiscal policy has NO
effect on the rate of profit. I agree with this in the short-run, but
I have suggested that in the long-run expansionary fiscal policy might
have a positive effect on the rate of profit, if it creates conditions
of stagflation, which result in real wage increases slower than
productivity increases over an extended period of time. This is the
crucial question in order to be able to determine whether or not
expansionary fiscal policy is able to overcome capitalisms tendency
toward crises, and it is not analyzed in these papers.
4. It is assumed that technology (and thus productivity) remain
constant, and also the real wage remains constant. What kind of
"growth" and "long-run" is this?
In sum, the extent to which the Shaikh-Moudud framework presents a
Marxian view of fiscal policy is of course debatable. The authors
themselves do not call it Marxian. Rather they call it a synthesis of
Harrod and Keynes, and sometimes a "classical view". Marx is mentioned
a few times, but no more than Quesnay and Ricardo.
More substantively, these papers are missing what I consider to be the
distinctive feature of a "Marxian view of fiscal policy" an analysis
of the effects of fiscal policy on the rate of profit. Maybe this
crucial question will be analyzed in future papers. But Shaikh has
been working on this synthesis for 20 years.
Thanks again for the discussion, and for calling my attention to these
articles.
Comradely,
Fred
Quoting Paul <[EMAIL PROTECTED]>:
Fred M., quoting me writes:
[Some references: "On Being Keynesian in the Short Run and Marxian in the
Long Run" Dumenil & Levy; "Wandering Around the Warranted Path" Shaikh;
"The Social Wage, Welfare Policy, and the Phases of Capital Accumulation"
Moudud & Zacharias]
Paul, I would say that none of these articles present a Marxian view of
fiscal policy. None address the question of the effects of
expansionary fiscal policy on the rate of profit. (By the way, the
title of Dumenil and Levy's paper is " ... and CLASSICAL in the Long
Run.")
Thanks to Fred for the comments and the tittle correction (after the
weekend I will try to post on his separate post and Jim D.'s). BTW, I
recommend to people interested in this subject some excellent related
articles written by Fred such as those on his website
http://www.mtholyoke.edu/~fmoseley/#working (see the section on US
Capitalism).
With e-mail it is hard to be sure whether Fred is a bit saying the articles
are not that much a Marxian view or rather just that they are not focused
on fiscal policy and profit rates. To me the first point has a relevancy:
in the last 15 years there has been a tendency to speak of a "Classical"
(as distinct from "Marxist") tradition. In some cases I think this is
simply an effort at a "big tent Church" philosophy. People such as Dumenil
& Levy have made clear how they see the Marxist tradition within the big
tent. In other cases, IMO, it does represent a political separation by the
authors (eg, AFAIK, Moudud and Zacharias would NOT specifically associate
themselves as part of a marxist tradition although there is nothing
non-marxian about what they wrote). Perhaps this parallels trends we see
in other areas such as the shift of some post-modern marxian philosophers
to the "radical enlightenment", the revival of interest in a left
interpretation of Adam Smith (Stedman Jones, Emma Rothchild), etc.
That aside, I am pretty sure that the Moudud & Zacharias article IS on
fiscal policy and the profit rate (i.e. the 2nd half of the article,
although I am not able to reread the article right now).
http://www.levy.org/default.asp?view=publications_view&pubID=f73a204608
For this purpose they draw on the overall model of Shaikh (Moudud being a
former student and sometime co-author) and I thought D & L provide another
access to that sort of model.
But Fred has a point that the Shaikh and Dumenil articles only imply the
framework. Shaikh does go into this specific point in "Economic Policy in
a Growth Context: A Classical Synthesis of Keynes and Harrod" (forthcoming
in Metroeconomica) ..http://homepage.newschool.edu/~AShaikh/ (but the math
in that article ..).
Paul
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