Full text: What is New Since Keynes?

What is it then that we (Keynesians) have still to learn? 
What is the weak point of the policies pursued in the 
pet-war years? We do not know very well how to induce 
industry to invest and create capacity of just the right 
amount and of the right type. 
The idea was that if you create sufficietn demand by fiscal 
policies then the profits and the utilisation of capacity 
created in this way will induce industry to invest. 
It was not assumed that this will necessarily be sufficient 
to maintain full employment, in other words it was 
regarded as possible that a permanent budget deficit 
be necessary for this purpose but with a low rate of interest 
and a d-e-e-c-rrt- rate of growth this would not be a great problem. 
Kalecki considered,however, the possibility that 
industry in spite of the favorable profit situation 
wmred not create sufficient capacity to £&&& the full 
employment demand ( Three ways to full employment. In 
The Economics of Full Employment. Oxford institute of Statistics). 
In this case he proposed special incentives for business 
- the so-called modified income tax which essentially very 
much ressembles the tax incentives ( quick depreciation ) 
widely used after the war. Also he considered that the 
government itself could in case of need build the required 
capacities ( the national industries would give the 
opportunity ). 
Now I think that here is the crux of our policies. 
I suspect that it may no1 ssible to induce industry 
to invest at a reasonable rate just by keeping effective 
demand at full employment level.

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