Keynesianism, Social Conflict and Political Economy

239 Pages·2000·3.176 MB·English

by  Massimo De Angelis (auth.)

Keynesianism, Social Conflict and Political Economy
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Keynesianism, Social
Conflict and Political
Economy
Massimo De Angelis
Lecturer in Political Economy
University of East London
First published in Great Britain 2000 by
MACMILLAN PRESS LTD
Houndmills, Basingstoke, Hampshire RG21 6XS and London
Companies and representatives throughout the world
Acatalogue record for this book is available from the British Library.
ISBN 978-1-349-41248-8 ISBN 978-0-333-97749-1 (eBook)
DOI 10.1057/9780333977491
First published in the United States of America 2000 by
ST. MARTIN’S PRESS, LLC,
Scholarly and Reference Division,
175 Fifth Avenue, New York, N.Y. 10010
ISBN 978-0-312-23146-0
Library of Congress Cataloging-in-Publication Data
De Angelis, M. (Massimo)
Keyesianism, social conflict, and political economy / Massimo De Angelis.
p. cm.
Includes bibliographical references and index.
ISBN 978-0-312-23146-0 (cloth)
1. Keynesian economics—History. 2. Social conflict—United States—History–
–20th century. 3. Economics—United States—History—20th century. I. Title.
HB99.7 .D4 2000
330.15'6—dc21
99–055733
©Massimo De Angelis 2000
Softcover reprint of the hardcover 1st edition 2000 978-0-333-75137-4
All rights reserved. No reproduction, copy or transmission of this publication may be made
without written permission.
No paragraph of this publication may be reproduced, copied or transmitted save with written
permission or in accordance with the provisions of the Copyright, Designs and Patents Act
1988, or under the terms of any licence permitting limited copying issued by the Copyright
Licensing Agency, 90 Tottenham Court Road, London W1P0LP.
Any person who does any unauthorised act in relation to this publication may be liable to
criminal prosecution and civil claims for damages.
The author has asserted his right to be identified as the author of this work in accordance with
the Copyright, Designs and Patents Act 1988.
This book is printed on paper suitable for recycling and made from fully managed and sustained
forest sources.
10 9 8 7 6 5 4 3 2 1
09 08 07 06 05 04 03 02 01 00
Contents
List of Figures and Tables viii
Preface and Acknowledgments ix
Abbreviations x
1 Introduction: The Social Meaning of Economics 1
1.1 Conventional wisdom 1
1.2 The social meaning of Keynesianism 3
1.3 The structure of the book 8
2 The Making of the Keynesianism of Keynes 11
2.1 Introduction: economic liberalism before the
Keynesian revolution 11
2.2 Social conflict and Keynes’ early political intuition 14
3 Keynes’ Scientific System 23
3.1 Aggregates and time: the co-ordinates of a new
capitalist strategy 23
3.2 Time, crisis, and expectations 29
4 The Mass Worker and Ford’s Strategy 37
4.1 Introduction 37
4.2 The attack on working-class power through the
elimination of the craft worker 40
4.3 Patterns of insubordination of the mass worker 41
4.4 Ford’s five-dollar day and the strategy for the
subsumption of the mass worker 44
4.5 Workers’ resistance and the decay of the
five-dollar day 48
5 War, Class War, and the Making of the Social
Microfoundations of Keynesianism 50
5.1 Introduction 50
5.2 Social turmoil during the Great Depression 50
5.3 The “crisis of productivity” during the war years 53
5.4 Union bureaucratization and war planning 56
v
vi Contents
6 War Planning and the Rise of the Keynesian Orthodoxy 61
6.1 Introduction 61
6.2 The “danger” lying ahead: the strategic role of
economics in class war planning 67
7 The Institutional Features of Post-war Keynesianism 75
7.1 The theoretical consensus and strategic role of
economics in post-war economic planning 75
7.2 A struggle-pushed consensus 82
7.3 The social basis of Keynesianism
and its limits: the social “microfoundation” of
macroeconomic policies 83
7.4 A general illustration of the social
“microfoundation” of macroeconomics 84
7.5 Recognition and co-optation of working-class
autonomy: the Taft–Hartley Act 86
7.6 The union contract 88
7.7 The link between work and revenue among
unwaged workers 92
7.8 Conclusion 96
8 The Theoretical Features of Post-war Keynesianism 97
8.1 Introduction 97
8.2 The analytical framework of the Neo-classical
Synthesis: the IS–LM model 98
8.3 Aggregation, wage rigidity, and working-class power 102
8.4 Wage rigidity, productivity deals, and state planning 104
8.5 Time and expectations: endogenizing “animal spirits” 106
8.6 Adaptive expectations, productivity deals, and
state planning 107
9 Economic Modeling and Social Conflict: 1 – The Fiscal
Multiplier 112
9.1 Some methodological remarks 112
9.2 The dissection of the simple income determination
model 117
9.3 The Keynesian multiplier and Marxian categories:
rate of surplus value and rate of profit 122
Contents vii
9.4 Implicit assumptions and implications of the
dissected income determination model: wages
and productivity 123
9.5 Implicit assumptions and implications of the
dissected income determination model:
extention of working time 125
9.6 The social meaning of the Keynesian strategy
of employment creation 126
9.7 The social multiplier with public expenditures
in a closed economy 127
9.8 The social multiplier in the open economy 129
10 Economic Modeling and Social Conflict: 2 – Inflation
and the Phillips Curve 135
10.1 Introduction 135
10.2 The Phillips curve and capital’s strategies 137
10.3 From cracks to wreckage: class struggle, the
crisis of Keynesianism, and the collapse of the
Phillips curve 142
11 Conclusion: Looking Ahead 148
11.1 The general features of this book 148
11.2 The new crisis and the process of globalization:
general characteristics 150
11.3 Globalization and new social movements 152
11.4 The current crisis and neoliberal opportunism 155
11.5 The current crisis and the Keynesian alternative
to neoliberal strategies 157
11.6 What then? 173
Notes 179
References 203
Index 218
List of Figures and Tables
Figures
7.1 Members of the American Economic Association, 1900–60 78
9.1 Class relations and balance of trade: 1 131
9.2 Class relations and balance of trade: 2 132
9.3 Adjustment under the Gold Standard 133
9.4 Adjustment under Bretton Woods 134
10.1 Relation between productivity, wages, and prices in the
Phillips curve 139
10.2 Feasible policy targets constrained by the class struggle 141
10.3 Shift in the short-run and long-run Phillips curve 146
11.1 Governing the parameters of accumulation 170
Tables
4.1 Worker productivity for the Model T Ford, 1909–13 14
7.1 Formal comparison of the economic orthodoxy before
and after the Second World War 76
7.2 The growth of fringe benefits, 1955–87 89
8.1 Political comparison of mainstream economic paradigms
before and after the Second World War 100
10.1 Initial and final effects caused by an increase in aggregate
demand 145
11.1 Gross and net flows of foreign direct and portfolio
investment, 1970–97: major industrial countries 159
11.2 Non-residents’ holdings of public debt, 1983–97 160
11.3 Cross-border transactions in bonds and equities,
1975–97: selected major industrial countries 161
viii
Preface and Acknowledgments
This book has been a long enterprise. Some parts of its material have
been published in various forms. The substance of Chapter 2, 3, and 10
has seen the light in the American journal Research in Political Economy
(De Angelis 1997); some sections of Chapter 9 are forthcoming in the
Review of Radical Political Economy; while a large part of the section on
capital movements in Chapter 11 has been published in theJournal of
Post Keynesian Economics (De Angelis 1999). Grateful thanks are
extended to the publisher of all journals for permission to reproduce
this material here. The main ideas of most chapters have been the
result of my work for a Ph.D. at the Department of Economics,
University of Utah, finished in 1995, under the supervision of Rajani
Kanth and Norman Waitzman. To both go my thanks. More
poignantly, this work would not have seen the light if it had not been
for the decisive and apparently indefatigable work of Harry Cleaver at
the University of Texas at Austin, who was my external supervisor. To
him goes my most comradely affection. Ferruccio Gambino and Bruno
Cartosio must be thanked for the invaluable insights they gave me in
various conversations on the history of the American labor movement,
and Ed Emery for his vividly colored stories of struggles that evoked
the spirit of an epoch. Since the completion of my thesis, several
people have contributed to the development of this work with their
encouragement, comments and useful criticisms. Silvia Federici and
Mariarosa Dalla Costa have enlightened me on the conditions of the
women’s movement in the 1970s. Philip Arestis, Chris Fuller, Peter
Howells, Andrew Kliman, Gary Mongiovi, Bruce Pietrykowski, Angelo
Reati, and Ernesto Screpanti have enabled me to sharpen various
aspects of my argument, while George Caffentzis has provided encour-
agement for the overall project and insights on the condition of the
global economy today. To all of them goes my gratitude, bearing in
mind that the usual caveats apply. This book is dedicated to the
memory of John Merrington, historian and translator with a passion
for people not roles.
MASSIMODEANGELIS
ix