[OPE-L:6802] Re: Re: Re: Keynes and Kalecki

From: Steve Keen (s.keen@uws.edu.au)
Date: Thu Mar 21 2002 - 16:06:30 EST

Read a bit more of the book then Rakesh--and maybe also look at my paper on 
my Marx-Goodwin-Minsky model of the trade cycle at:


At 05:37 AM 22/03/2002 Friday, you wrote:
>re 6798
>>Within the Keynesian system the demand for investment goods does not 
>>derive from the demand for consumption goods. Rather both investment 
>>demand and labor demand are derived demands dependent on the level of 
>>*aggregate* demand.
>>In solidarity, Jerry
>What then determines the level of aggregate demand? I think Steve 
>implicitly presents in his interpretation of the Keynesian system the idea 
>that it is determined by the prospects of final consumption.
>As a side note,  Bush/Greenspan are attempting to bolster investment 
>demand not so much by strenghtening final demand via direct military 
>purchases and easy consumer credit (which in the US has led to common 
>complaint by progressive economists that the Republicans are more 
>Keynesian than the Democrats) but rather by brightening the prospects of 
>long term profitability through, for example, lax anti trust law, union 
>busting activity by the National Labor Relations Board,  and regressive 
>tax cuts that will require much deeper slashes in the social wage than to 
>which Bush and Greenspan are admitting.
>Krugman has railed against the massive regressive tax cuts because of the 
>pressure presumably put on the long bond by the prospect of huge future 
>federal government deficits,  not because of how such cuts in the social 
>wage by dimming the prospects of future demand for consumption goods 
>reduce demand for investment goods in the present.
>Bush is in fact attempting to ensure that direct and social wages will not 
>keep pace with productivity gains in his attempt to revive investment demand.
>Steve's Keynes seems to be an underconsumptionist but underconsumptionism 
>fails to explain the downturn in investment demand--there had been no 
>prior problem in the realization of surplus value--and more importantly 
>the steps that are taken to revive investment demand.

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