The Real Movement

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Tag: General Theory

Keynes and the myth of the Reagan administration’s neoliberalism

Robert Skildelsky, biographer of John Keynes, has written an essay written an essay on the 80 year legacy of the General Theory in which he credits Keynes with inventing macroeconomic policy and for showing how government could employ means at its disposal to offset economic depressions.

For all the genius of Keynes’ General Theory, its importance has not always been acknowledged by mainstream economics. By the 1980s, according to Skidelsky, most of mainstream economics came to reject many of the ideas first proposed by Keynes, particularly his argument capitalist economies were inherently prone to chronic underutilization of both capital and labor.

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How Keynes’ smuggled Marx’s concept of labor power into his General Theory

In chapter 4 of his General Theory, Keynes is looking for a quantitative unit of measure that reflects his subject of inquiry: what determines the level of employment? He was looking for a unit of measure that was, in his words, “appropriate to the problems of the economic system as a whole”.

When I first read this statement, I was confused, since it seemed obvious to me that the currency was the unit of measure in bourgeois economics. In this sense, I thought, bourgeois economics differed from labor theory, because the latter’s unit of measure is some definite weight of a commodity money. Since bourgeois political-economy rejects the notion of value, I assumed it was left with only the currency.

It turns out that I was wrong. Keynesian economics does not use the national currency as its unit of measure at all. The reality is much more interesting.

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