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True, Keynes recognized that a theory of capitalist society has to be a
theory of monetary production. But this is only because he recognizes
that money exists and that it has consequences that matter (e.g., we should
not ignore changes in the price level because these affect the burden of
debt and production is financed with debt, we should not conflate the
interest rate with the rate of profit because lending money is an
alternative to production). Ultimately though Keynes is forced to maintain
that consumption is the ultimate purpose of production (money or no money).
Keynes could not explain why a capitalist economy cannot get along without
money (cannot explain why money is necessary).
The general principle (apart from the specific case of money) is that (as I
think Patrick Murray would say) the form (money) is there, and while it is
not entirely irrelevant (as in Ricardo) it does not matter very much. It
does not for Keynes indicate the content (use value, not value is the goal
of production for K). It cannot be systematically incorporated into the
theory (meaning, Keynes cannot explain the necessity of money). All K can
do is notice effects of money and assert their importance for macro
phenomena. I think this is why the Keynesian position has difficulty
defending its insights against neoclassical assaults: that its revision of
neoclassical theory is not fundamental enough precisely because it does not
take form seriously. I doubt James Galbraith has any notion of these
issues. Keynes gets a catchy title from Einstein and can regard his
reformation of economics as analogous to Einstein's reformation of physics,
but this at the level of superficial metaphor.
>Fred, ok vol i, chap i analysis demonstrates that value or social labor can
>only be represented as other than it is--in monetary terms (Patrick
>Murray). This demonstration of the necessity of money (Fred Moseley) then
>casts doubt on any modelling of capitalist society that takes as its givens
>or presuppositions physical quantities (see Fred Moseley again). A theory
>of capitalist society has to be one of monetary production. Brilliant.
>Now what does Hegel have to do with this? Keynes recognized the last point
>without knowledge of Hegel; indeed James Galbraith has argued that Keynes
>was inspired by Einstein's use of non Euclidean geometry in breaking with a
>two dimensional classical economics in his development of a monetary theory
>of production. Riccardo and others of course could speak to this.
Martha Campbell, Assistant Professor, Economics, Potsdam College of SUNY,
Postdam, NY 13676, Office Phone (315) 267-2201, Home Phone: (315) 265-2673.
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