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At 18:38 +0100 7-04-2000, Martha Campbell wrote:
>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).
This is clearly *contradicted* by Keynes' distinction between a cooperative
economy and an entrpreneur economy in the Collected Writings, where Keynes
go so far as to endorse Marx' view of the capitalist process as D-M-D'.
Note also that in the General Theory, consumption is *dependent* on income,
income is dependent on investment, and investment is dependent on net
profits (inversely related, given expectations, from the interest rate).
The notion of autonomous investment is indeed very, very strange for one
who is argued to have said that consumption is the ultimate purpose of
production (money or no money).
>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 is just used by Keynes in explaing the structure of production and the
distribution of income (Treatise), and the persistence of mass
'equilibrium' unemployment (General Theory)!!! Does this means that "it
does not matter very much"?
>does not for Keynes indicate the content (use value, not value is the goal
>of production for K).
Not true, see above.
>It cannot be systematically incorporated into the
>theory (meaning, Keynes cannot explain the necessity of money).
This, I do not understand. What does it mean that Keynes cannot explain the
*necessity* of money? For a person who in the Treatise said that capitalist
has to be necessarily financed is a rather odd feature. Probably you mean
that he does not deduce money as Marx, so he cannot explain the necessity
of money as Marx does. Not strange, since he is Keynes.
>All K can
>do is notice effects of money and assert their importance for macro
I would say: excellent! Orthodox theory has difficulty even in admitting
the existence of money in general economic equilibrium and in micro-founded
>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.
It is not a reformulation of Neoclassical theory, it is an *attack* against
it!!! Don't forget that Keynes titled his major opus The *General* Theory.
>I doubt James Galbraith has any notion of these
Probably, you're right. But I guess he would find quite meaningless most of
your references to Keynes.
This mail is just to note how difficult is to speak of (and may be even
engage in a dialogue with) other traditions. Marxians have become very
susceptible of how their theory is apprehended by other, heterodox and
orthodox, streams of thought. I guess we should deserve the same caution in
talking about them.
To Rakesh: Hegel is relevant because of the notion of the *abstraction* of
labour, which is one of the most difficult in Marx, and totally absent in
Keynes. That said, it's clear that it is possible to say quite correct
things about capitalism without knowing anything about Hegel. The issue is:
may we understand Marx without re-reading Hegel? I would argue: no.
>>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.
Office: Department of Economics
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