A historical note on the political económica of jmk.doc

J.M.Keynes



Introduction



The idea of this article is to summarize the ideas of Keynes on economic policy. In first place, to present the positions economical policy of Keynes along a historical period that is going since the twenties to the time of the General Theory and after; in second place, we will discuss the meaning of the concept “socialization of the investment”, and last tocompare the positions of Keynes with the one of its keynesian followers, considering mainly the intrawar period.
It intends to demonstrate that the critics the keynesian political ideas in policy area directed against the thought of the keynesian disciples much more that to the one of own Keynes and that these critic don’t commits very or almost in anything the Keynes´s..

1. The economicpolicy of J.M. Keynes
1.1. the slow down of the nominal wage

1. The first subject that becomes necessary to highlight is the reject on the part of Keynes of the policy of reduction of the monetary wages. This constitutes a definitive demarcation point in relationship with the classic neo-classics vision.
2. Keynes rejects those policy so much in the " Treatise on Money " as in the GeneralTheory. In the " Treatise ", using the fundamental equations, Keynes shows the theoretical possibility to reduce the monetary wages, although he/she gets the attention for the time of the adjustment.
3. A reduction of the monetary wages could reduce the unitary costs for unit of output, expressed in the first term of the equation P = E/O+I-S/O. A reduction of the monetary revenues t would allow thegrowth of the profits and would allow the retake of the investment. But a rigidity of the monetary wages exist in the real world, a reduction was political and socially impracticable without a guerrilla war in the industry.
4. In the General Theory, it recognizes that the reduction of the monetary wages would make not very sense is in a close economy or in an open economy. In both cases, ifoptimistic expectations existed on the future of the demand and on the expected futures revenues, a fall down of the wage will act as a shrink and it would move the marginal efficiency of capital also when this is above the rate of interest of long period.
5. In a close economy, the reduction of the monetary wages would generate regressive expectations, because a reduction of the costs would betray areduction of the prices, staying the depressed profit rate. A recovery of the prices of the actives or of the prices of the titles could be gotten with a policy of moderation of the expectations " bears ", i.e., the rate of conventional interest of long period practiced by the monetary authorities should assure a credible monetary policy, curving the speculative preference for the liquidity, but ina political democracy, the monetary wages are fixed through negotiations and commitment between managers and unions, the reduction of the wages only could just be possible in a repressive or dictatorship political regime. The facto, the monetary policy can contribute to a reduction of the real wage in a prolonged enlargement of the adjustment, throughout unemployment, by stagnation of the nominalwage

1.2. the interest rate policy

1. Discussing the policy of the interest rate, so much in " Tract " as in " Treatise ", Keynes considers that an increase of the prices allows the expansion of the profits, investment and output; otherwise drives to a decline of the production and of the employment, for the that, the recommendation rule is basically the resource to the variations in theinterest rate, in order to stabilize the prices. This basic position presupposes the existence of a weak relationship with an international monetary system.
2. In " Tract ", Keynes considers that a reduction of the interest rate provokes a movement in the relative prices to the drop, increasing the actives in the hand of the bank system (the monetary base) what allows to increase the amount of...