#kalecki

[A] renewed demand for full employment must insist on a literal reading of the term; a living wage; and the responsibility of the state to ensure jobs whenever business does not. Possibly to achieve true full employment where the long postwar boom only approached that condition would only revive and confirm the profit-squeeze thesis, and enforce the conclusion that full employment is as ruinous to capitalism as commonly supposed. In that case, the attenuation of profitability, at a high plane of prosperity, might lead us to recall Marx’s proposition that no social order is ever overcome until all its productive capacities—surely these include those of its working people—have been fulfilled. Turning away (revolution is the word) from profitability as the index of social health, we might attain a nearly steady-state summit of civilization, and content ourselves with a slow-growing economy in which the red of socialism had been interfused with the green of sustainability. Or—a more pedestrian chance—full employment might spell nothing worse for capital than moderate inflation, with a balanced rate of exploitation securing the steady growth of wages and profits both. On this subject the last word still belongs to Kalecki: 'If capitalism can adjust itself to full employment, a fundamental reform will have been incorporated in it. If not, it will show itself an outmoded system which must be scrapped.'

It is probable that military expenditures will continue to mount. This will change the distribution of profits to the advantage of the armaments industries, as well as reinforce the importance of armaments expenditures as a factor in the general economic situation. This in turn will no doubt strengthen the economic and political position of the ‘new’ business groups. Their close association with the adventurous elements of the military machine will also contribute to such a shift in the structure of the ruling class. Other factors will work in the same direction: a further expansion of the war will be accompanied by an ever increasing disregard for world opinion. This will adversely affect civil liberties, in particular the Negro problem, where the opinion of newly created African states has been a factor of considerable importance. The United States will drift toward membership in the club of 'shameless countries,’ now including South Africa, Rhodesia, and Portugal. This will lead to the promotion in public life of reactionary politicians associated with 'predatory’ big business groups. It is these groups that are the beneficiaries of the war in Vietnam and it is they that are interested in its continuation…. In light of [this] the 'old’ business groups should have serious misgivings about the continuation of the war in Vietnam: what is advantageous to their competitors undermines their own economic and political position in the ruling class. Nor is this the end of the story. What they had in common with their adversaries–the effort to show the hopelessness of revolutionary movements in underdeveloped countries–has failed miserably. In this sense the war in Vietnam has already been lost.

[S]tate capitalism is closely connected with planning of one form or another which underdeveloped countries can hardly avoid today…. Evolution in this direction could be counteracted significantly by the pressure of the imperialist countries, exerted by attaching appropriate ‘strings’ to credits granted. Since underdeveloped countries cannot do without some inflow of foreign capital, pressure of this kind could be highly effective in changing the lower-middle-class governments into servile tools of big business allied with the feudal class. Apart from 'ideological’ victory, imperialist countries would gain a better foothold for defending their 'old’ investments in underdeveloped countries and for a 'new' expansion in this sphere. A significant obstacle to these imperialist pressures, though, is the possibility of obtaining credits from socialist countries. Its effect is reflected not merely in the amount of capital actually received from this source by underdeveloped countries, but also in strengthening their bargaining position in dealing with the financial capitalist powers. The competition with the socialist countries for influence in the 'intermediate regimes’ forces those powers to grant credits without attaching conditions as to the internal economic policy, although the imperialist governments do try to obtain as much as possible in this respect.

To the quantitative overestimate of the role of 'external markets' Rosa Luxemburg contributes a fundamental mistake, which she perpetrates in the analysis of the impact of these markets on development of capitalism. She considers—in any case in the main current of her argument—that the market for the surplus is created to the extent of total exports to the non-capitalist sector, and not only to the extent of the excess of exports over imports. "It is easy to show, however, that this approach is erroneous: the imported goods absorb purchasing power just like those home- produced, and thus, to the extent that exports are offset by imports, they do not contribute to the expansion of the markets for national product. Or, to approach it from a different angle, imports, like wages, are costs, and the part of disposal of profits is, alongside capitalist consumption and investment, solely the export surplus. And in order that this should be possible, export of capital is necessary. Only to the extent to which the capitalist system lends to the non-capitalist world (or the latter sells its assets) is it possible to place abroad the surplus of goods unsold at home. Only in this way do the 'external markets' solve the contradictions of the world capitalist system. "Obviously the net 'external markets' also played their role in the development of capitalism, but a much more modest one than would have been the case if really all the exports to the noncapitalist world contributed to the absorption of surpluses corresponding to accumulation.

The 'external markets', in the broad sense of Rosa Luxemburg, in the form of armament orders and ancillary expenditure–in so far as they are financed by loans and taxation of capitalists–play today a leading role in the functioning of modern capitalism. It is true that Rosa Luxemburg did not anticipate the enormous role of this type of external market' in the absorption of accumulation. But one way or another she maintained that capitalism is saved by 'external markets'. In her time it was no doubt exaggerated, but it has proved right today. "As for Tugan-Baranovsky, contemporary capitalism indeed put into focus his view of the paradoxical and absurd character of 'antagonistic systems' whose main task is not catering to human needs. In his vision of future capitalism, machines were to produce machines for production of machines. But making the high level of employment and worker consumption dependent on production of the means of destruction is even more absurd. "Both, despite slips in their arguments, contributed to the understanding of the perverse world in which we are living.

A bushel of dried dill stalk (Sry for being reactionary i just forgot to send this)

It is true that profits would be higher under a regime of full employment than under laissez-faire, and even the rise in wage rates resulting from the stronger bargaining power of the workers is less likely to reduce profits than to increase prices, and thus adversely affects only the rentier interests. But 'discipline in the factories' and 'political stability' are more appreciated than profits by business leaders. Their class instinct tells them that lasting full employment is an integral part of the 'normal' capitalist system.