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

Since Kalecki wrote his famous classic on the politics of full 
employment (Kalecki 1943) nearly half a century has passed and the 
experience of history accumulated since invites us to use his 
methods and his questions on it. His paper predicted a stop-go 
cycle; more generally it analysed the attitudes of business to 
full employment policies. To generalise even more we might discuss 
the role of politics in this field. 
It seems striking to day that among the reasons Kalecki gives for 
the capitalists' dislike of full employment policies he does not 
mention their fear that deficit spending sooner or later would 
lead to increased taxation. And taxation, indeed, is a bugbear of 
capitalists. Looking at the post-war history of full employment 
policies in the United States one feels that this fear has played 
a very large role.Again, in Europe when the welfare spending 
continued to rise as a percentage of GDP this also led to a 
preoccupation with the question of taxes.The importance of the 
question of the public debt and its service is of quite a 
different order of magnitude now than it was in Kalecki's 
thinking. The reason for the difference is fairly obvious. 
Kalecki,as well as Keynes and his followers, were thinking in 
terms of interest rates as low as they were in England during the 
second world war, to a great extent owing to the influence of 
Keynes at the treasury. The reaction against the cheap credit 
began soon after the end of the war (some economists in U.S. 
talked of the "rediscovery of money") and reached its climax in 
the era of monetarism from 1979 on. When Kalecki considered the 
possibility,or even likelyhood, of a permanent deficit being 
*Acknowledgements are made to Alois Guger and Ewald Walterskirchen 
for valuable suggestions.

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