Some Comments on the Politics of Full Employment.

Steindl, Josef

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Document type:: Works

Collection:: Josef Steindl Collection

Title:: Some Comments on the Politics of Full Employment.

Author:: Steindl, Josef

Scope:: Typoskript, 13 Blätter

Year of publication:: ohne Datum

Language:: English

Note:: Seitenzahlen handschriftlich notiert. - Erstmalig publiziert auf Italienisch (Salvatore Biasco, Alessandro Roncaglia und Michele Salvati (Hrsg.): Instituzioni e mercati nello sviluppo economico: Saggi in onore di Sylos Labini, Roma-Bari, 1990).

Topic:: Economic policy

JEL Classification:: E60 [Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook: General]; E65 [Studies of Particular Policy Episodes]; P16 [Capitalist Systems: Political Economy]; P31 [Socialist Enterprises and Their Transitions]

Shelfmark:: S/M.51.3

Use and reproduction license:: In Copyright

Access:: Free access

DOI:: https://doi.org/10.48671/nls.js.AC14446084

9 required to maintain full employment he no doubt tacitly assumed that interest rates would be kept low. If the euthanasia of the rentier would be achieved i.e. the interest rate kept at the rate of inflation then the servicing of the public debt would not constitute a problem at all (except perhaps in so far as different groups might be affected in different ways by inflation).A positive real rate of interest may of course be tolerable if there is a sufficient growth of the national product. If the interest rate is substantial in relation to the growth rate, then the situation is likely to lead to a continuing increase in the public debt. Kalecki had proposed a tax on all wealth in order to service the debt.Since all capitalists would pay but only the rentiers would receive the yield of the tax this involves a shift of income from entrepreneurs to rentiers,which is not a very happy implication. A steadily growing public debt in this case implies a growth of the rentier income and of the number of people interested in it.In view of the large propensity to save of this class this growth will tend to be self reinforcing.Politically this means that a growing rentier class allied to an expanding financial sector will see to it that high interest is maintained and no experiments in expansion are entertained. Economically it means that there result automatically continuing additions to the budget deficit which do not benefit effective demand. Paradoxically enough (or so it seems) the large budget deficits of the last decades have not been the result of Keynesian-Kaleckian policies at all. Quite the opposite. When the end of the Keynesian era was officially declared in 1974/75 budgets everywhere turned very largely into deficit and they sky rocketed after Reagan took over. The explanation is not difficult: After 1974 the personal

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