The Economics of Michał Kalecki

329 Pages·1985·31.512 MB·English

by  Malcolm C. Sawyer (auth.)

Radical Economics
General Editor: SAM AARONOVITCH
Debates between economists are not just technical arguments
amongstpractitionersbut often reflectphilosophicaland ideological
positions which are not always made explicit.
Discontentgrewwith the prevailingeconomicorthodoxyasthelong
period of economicexpansion in the advanced capitalisteconomies
came to an end in the 1970s;disenchantment wasexpressed inopen
discussion about the 'crisis' in economics and in the rise of various
kinds of radical economic theory, often using the general title of
'political economy'.
Manyeconomistshavelookedfor a more fruitful pointofdeparture
in the ideas ofMarx and the classical economists and also in such
contemporary economists as Kalecki and Sraffa. Although it is
possible to identify a broad radical stream, it does not mean that
there are no significant controversies within this radical approach
and, indeed, it would be unhealthy if this were not the case.
Can radical economic theory interpret the world better than the
currentorthodoxywhichitchallenges?And can itshow also how to
change it?This isa challenge which this series proposes to take up,
adding to work already being done.
Each book will be a useful contribution to its particular field and
should become a text around which the study ofeconomics takes
place.
Radical Economics
Published
Amit Bhaduri, Macroeconomics
Michael Bleaney, The Rise and FallofKeynesian Economics
Keith Cowling, Monopoly Capitalism
Michael Howard, Profits in Economic Theory
Paul Hare, Planning the British Economy
Malcolm C. Sawyer, The Economics ofMichal Kalecki
Forthcoming
Terry Byres, The Political Economy ofPoor Nations
Matthew Edel, UrbanEconomics
David Purdy, The Theory ofWages
The Economics of Michal
Kalecki
c.
MALCOLM SAWYER
Professor ofEconomics
University ofYork
M
MACMILLAN
© Malcolm C. Sawyer1985
Softcoverreprintofthehardcover1stedition1985
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First published 1985
Published by
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BritishLibrary CataloguinginPublication Data
Sawyer,Malcolm C.
TheeconomicsofMichal Kalecki.-(Radical
economics)
I. Kalecki,Michal 2.Economics
I. Title II.Series
330.15'5 HB1I4.K28
ISBN978-0-333-34936-6 ISBN978-.1-349-18031-8(eBook)
DOl10.1007/978-1-349-18031-8
Contents
Preface and Acknowledgements VII
An Introduction to Kalecki and His Ideas
2 Prices, Profits and the Degree of Monopoly 20
3 Investment, Business Cyclesand Growth 43
4 Differential Savings, the Degree ofMonopoly and
the LevelofIncome 70
5 Money, Finance and Interest Rates 88
6 Wages, Employment and Inflation 108
7 The Political Economy ofFull Employment 125
8 Kalecki and Marx 144
9 Kalecki and Keynes: Comparisons and Contrasts 178
10 Development in Mixed Economies 212
II Kalecki and the Economics ofSocialism 230
12 Kaleckian Macroeconomics:Speculations on
Future Developments 268
List ofKalecki's Publications Referredto in Text 301
References 304
Index 316
Preface and
Acknowledgements
In writing this book,I have sought to satisfyfour majorobjectives.
The first one is to provide a systematic and sympathetic discussion
of the work ofMichal Kalecki, written to appeal to awideaudience
including undergraduatestudents.There isarelativelysmallband of
the cognoscenti who regard the work of Kalecki very highly (as
discussed in the introduction to Chapter 1).Forexample, Harcourt
(l977b)argues that'Kaleckiisamost importantpatron saint ofthe
post-Keynesians'. This book seeks to extend the knowledge and
enthusiasmof the cognoscentito a much wideraudience. In particu
lar,Iwouldargue thatKalecki hasmuch toofferto thedevelopment
of a macroeconomics which can help us to understand the crucial
problems ofunemployment, slowgrowth, inflation, etc.
The second objective is to consider Kalecki's work as a coherent
whole.This involvesconsideration of Kalecki's macroeconomics of
capitalist economies (Chapters 2 to 7 below) as a complete 'pack
age'.Italsoinvolvesadiscussionoftheextenttowhichhisapproach
to capitalist economies can be seen to be consistent (in a broad
sense)with his approach to socialist and developing economies.
The third objectiveisto beginan evaluation ofKalecki's placein
the study ofeconomics.This isreflectedinanumberofways.Ishall
seekto indicate placeswhere Kalecki'swork can beseenasa (often
unacknowledged) forerunner of the ideas of others. In Chapter 1
and atanumberofotherplacesscattered throughthetext,Icontrast
Kalecki's approach with the prevailing neo-classical orthodoxy. I
seek also to place Kalecki within the broad Ricardian-Marxian
tradition in Chapter 1, and this is followed up in Chapter 8 by a
comparison between the work of Marx and that of Kalecki. One
viii Preface and Acknowledgements
reason for making that comparison is that Kalecki was clearly
strongly influenced by the work of Marx, and to some degree the
work ofMarx permeated that ofKalecki.
A number of ideas developed by Keynes in the 1930swere also
developed independently by Kalecki at about the same time. In
Chapter 9 I compare the work of Kalecki with Keynes's General
Theory. This permits further discussion of the work of Kalecki
within the general field of economic theory, as wellas dealing with
the question of the extent to which Kalecki could be said to have
anticipated Keynes (and vice versa). This comparison also allows
some indirectcomparisonsbetween Kaleckiand conventional(Key
nesian) macroeconomics.
The fourth purpose is to establish pointers for possible develop
ments of a Kaleckian macroeconomics. In recent years, there has
been a considerable interest in development ofsuch a macroecono
mics,afterthirtyyearsofsubstantialneglect. InChapter12,Iseekto
bring together a number of points raised in the earlier chapters
which relate to refinements and extensions ofKalecki'sapproach to
economics.
A comprehensive intellectual biography of Kalecki is already
availableinFeiwell(1975).Whilst sharingwith Feiwellahigh regard
for the work of Kalecki, this book has rather different aims
compared with Feiwell(1975).I have aimed the book specificallyat
alevelsuitableforundergraduates,and aimed for amore interpreta
tive book, with more comparisons between Kalecki and other
authors. I have limited the extent of biographical detail to the
minimum I thought necessary, although in Chapter 9 I have used
extensive notes to relate some points of interest on the intellectual
relationship between Kalecki and Keynes.
In the references I have only listed those works of Kalecki which
are actually referred to inthe text. Acomprehensivebibliographyof
Kalecki's work is given in Kowalik (1964) (for works before 1964)
and inFeiwell(1975).Aselectivebibliographyisprovidedin Oxford
Bulletin ofEconomics and Statistics, vol. 39.The collected works of
Kalecki are currentlybeingpublishedinPolish, and itisto behoped
that an English translation may soon beavailable. My research has
inevitably been somewhat restricted by my lack of Polish which
means thatsome ofKalecki's articles have not beenconsultedin the
preparation ofthis book.
Iam verygratefulto many people who have helped with comment
Preface and Acknowledgements ix
on drafts and with discussion on particular points. The interest
which many have displayed in this book has been a considerable
spur in its writing. I would like to thank Mrs Ada Kalecki for
written informationwhich isused inChapter9with her permission.
I was particularly fortunate that during the academic year 1983-4
when this book was being completed, Dr Jerzy Osiatynski was
visiting the Institute ofDevelopment Studies, University ofSussex.
AstheeditorofKalecki'sworks and aformer studentofKalecki, he
was able to provide me with much valuable information. Dr
Wlodzimierz Brus (now of Wolfson College, Oxford), a former
colleague of Kalecki, provided valuable background information,
particularly on Kalecki's involvement with policy discussion in
Poland. I am grateful to another colleague of Kalecki, Professor
KazimierzLaski (now ofUniversityofLinz,Austria)for permission
to refer to unpublished papers.
Iwould like to thank those whose comments on earlierdrafts led
to considerable improvements in style and content of this book.
Philip Arestis (Thames Polytechnic) and Peter Reynolds (North
Staffordshire Polytechnic) read through Chapters I to 7ofthe first
draft. George Catephores (University College London), Raja
Junankar (University of Essex) and Keith Gibbard (Manchester
Polytechnic) helped me with comments on Chapter 8, and discus
sions with Vicky Chick (University College London) have helped
clarify points discussed in Chapter 9. Paul Hare (University of
Stirling) and JanToporowski (Polytechnic of the South Bank) read
Chapter 11 for me and Sheila Smith (University of Sussex) read
Chapter 10. Whilst this book has benefited considerably from their
comments and advice, it isstillthe case that those who have helped
medo notnecessarilyagreewithwhatIhavewritten (indeed insome
cases I know that they willnot agree).
Dr Sam Aaronovitch responded enthusiastically to the idea ofa
book on Kalecki, and his comments (and our general discussions)
have also improved the book.
I would finallylike to thank participantsin seminars givenon the
relationship between Kalecki and Keynes at the Universities of
Dublin and Lancaster, Polytechnic of the South Bank (London),
Manchester, Newcastle and Wolverhampton Polytechnics, and the
jointseminar of North StaffordshirePolytechnicand Keele Univer
sity for comments and stimulus to further thinking.
I am very grateful to Mrs Ada Kalecki for permission to quote
x Preface and Acknowledgements
extensively from the following books and article written by her
husband: Selected Essays on the Dynamics ofthe Capitalist Econ
omy;SelectedEssays ontheEconomic Growth oftheSocialist andthe
Mixed Economy (both published by Cambridge University Press);
Essays onthe DevelopingEconomies (published byHarvesterPress);
'Theories ofGrowth in Different Economic Systems', Scientia, nos
5-6 (1970). I am also grateful to Allen & Unwin for permission to
quote from M. Kalecki, Essays in the Theory ofEconomic Fluctua
tions (1939).
University ofYork Malcolm C.Sawyer
England
January 1985