WOi 
ip 
£sO L 
Growth and Stagnation 
The experience of the years between the wars has led me 
to interest myself in the explanation of longterm developments 
like the stagnation of the 30s and later the post-war 
developments. After the classics the long term problems 
of history have been neglected by economists except Marx 
and Schumpeter. Marx asked very good questions, but his 
answers were not always so good. He posed the problem of 
inner contradictions of the capitalist system which would 
tend to make it more and more unworkable. Such inner 
contradictions can be found in the underconsumption idea. 
Unfortunately Marx failed to exploit this idea fully 
and instead followed-the hopeless trail of the increasing 
organic composition of capital. But it is remarkable that 
Marx introduced concepts which in one form or another 
play an important part in Kalecki's macro-economics: 
The department schema and the distinction between surplus 
value produced and surplus value realised. 
For the further development of thought it was extremely important 
that Rosa Luxemburg and Rudolf Hilferding recognised the 
emergence of a new phase of capitalism, monopoly capitalism, 
linked to imperialism. What was still neededrwas the 
development of the theory of effective demand by Kalecki i 
and Keynes*' in order to make the old undijeconsumption idea^ 
finto a cohherent theory^ 
t 
In my approach to the problem of the great depression 
written in the late 40s I proceeded on two different planes: 
I looked for the explanation in the "real" sphere of 
production and labor, and at the same time in the financial 
sphere (debt). I think both are important.