ourselves that the Keynes plan in itself does not solve this problem of
capital movementse - the payments union would not work if they were not
controlled ( as Kalecki and Schuhmacher argued in the Oxford Bulletin of
Statistics in 1944). In fact this problem is nowadays immeasurably
greater than it was then because of the enormous mass of mobile financial
capital and the perfection of the means of transferring it. In principle,
however, cooperative solutions exist for this problem, too. If the
country which looses the flight capital and the country which receives it
would cooperate they could avoid most destabilising and harmful
transfers. This is not completely utopian in so far as the influx of
funds also constitutes a problem .
Politics, however, are not governed by good sense and fairness; otherwise
governments would know that a structural surplus creates permanent
trouble in the long run unless the country is willing to buy up the rest
of the world. In the meantime, however, these governments are quite happy
with their foreign balance surplusses, for, if they would not have them
their budget deficit would have to be just so much greater in order to
maintain the same volume of effective demand.
I have started these comments, and I shall also end them, by pointing out
that we are in a world of transition which changes very quickly before
our eyes. This fully justifies us in discussing policies and plans even
if they appear to be unrealistic at the moment because they need not