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COMMENTS ON ABBA LERNER'S "FROM PRE-KEYNES TO POST-KEYNES" / Vol. 46, No. 2 (Sum 1979)

Arien Mack, Editor

Abba Lerner sees the continuity of Keynes with the theory that preceded him. Contemporary post-Keynesians see his break with orthodoxy and want to complete it. There is no doubt that Keynes, editor of the Economic Journal and influential spokesman for the Liberal Party, did often stress the continuity of his thinking with the accepted opinion of the day. His purpose was to change that opinion, to move it forward, and to educate it. In that sense, he was a polemicist and a propagandist. But he was also a great and imaginative thinker, and we do not have to be hound by the compromises he chose to make. He opened a door; we can go through it

The present essay will suggest that a broadly accepted interpretation of Keynes (set out succinctly by Lerner) fails to comprehend the crucial "micro" problems of concern to Keynes and his followers, because the interpretation ignores the basic methodological innovations underlying the (in reality very sparse) suggestions for full-employment "policy." Further, the Lerner interpretation ignores the wider political and social aspects of Keynes's analysis, aspects which resemble classical "political economy" more than the modern conception of "economics."

I shall begin by arguing that wage flexibility is not a necessary prerequisite for achieving full employment. Another way of looking at the problem is to take into account the formation of a concentrated sector in which markups are a function of a minimum target rate of profit. In this case unit prices are up to a point inversely related to demand and positively related to changes in costs. The above approach has in my opinion the merit of reflecting the historical development of modern capitalism in which changes in the market structure took place prior to the making of a strong trade-union movement, being chiefly determined by the uneven diffusion of technical progress. Yet, I think, these views do not explain why a private-enterprise system fails to achieve full employment of resources "abstracting" from "perverse behavior," market imperfections, and all the rest. I shall therefore argue that, even when wages have to fall in order to attain full employment, the (capitalist) economy may well react in an opposite direction.

Although they differ about where the boundary between public and private has to be redrawn, neoconservatives and new-left radicals have something hidden but very important in common. They implicitly accept that there has to be a boundary between public and private, that there are public and private spheres in which different rules obtain. Although they argue different positions, their arguments can thus be seen as part of one and the same logic of the public/private. The questions addressed in this article are: What is this "logic" (ideology)? Why is it so deeply rooted? What would it be to do without it? With minor exceptions, my argument will be internal to the Western liberal-democratic tradition. It does not claim universal applicability.

In its most general terms, to assert that individuals have rights immediately gives rise to a number of conundrums for which no satisfactory resolutions seem available. What sorts of entities are included in the term "individual" (or "all men")? As for the question of how one should delimit or define the "rights" which individuals are declared to have, I find myself running into two quandaries, one conceptual, the other moral.

Attempts to describe the origin of surplus value, particularly, but not exclusively, those oriented toward more popular audiences, frequently eschew complete explanation of why labor power is considered to be the only commodity that can produce surplus value. It is the purpose of this brief note to fill in the often neglected argument which must support such assertions and, in so doing, refocus attention on the power of Marx's analysis.

The purpose of this essay is to search for a conceptual framework by which the legitimation function of economic thought might better be understood. To accomplish this end, the legitimation function of economics will be examined in three social-historical contexts according to the predominant force which guides or steers economic activity: where tradition is predominant in steering economic activity; where the market mechanism is predominant; and where economic activity becomes increasingly steered administratively. Economic thought has not only reflected these three steering forces, it has acted to stabilize them; and in the case of the latter two, it was instrumental in their emergence. The following three sections will examine, in turn, these three steering mechanisms and the legitimating economic thought which has accompanied each.

The sociological tradition presents modern scholarship with a legacy of almost intimidating proportions. Yet we are still a long way from assessing its full significance. Hampered by the virtual inaccessibility of many key texts, whether through editions going out of print or the nonavailability of translations, the result has been predictable: the manifest discrepancy between our acknowledgment of "the classics" and our understanding of their work. It is therefore encouraging to witness the resurgence of interest in the writings of Comte, Durkheim, Simmel, and Max Weber which has taken place in the last decade and the numerous documentaries, interpretations, and critiques which have been its outcome. It is in the context of this minor renaissance that the translation published below is offered.

Latin America, as I see it, makes possible a kind of case study of the efficacy of religiously inspired protest and, on the positive side, vision of "the good society" in the modern world. After discussing the development of Catholic social teaching in the encyclicals of John XXIII, the documents of the Second Vatican Council, the statements of Paul VI, and the pronouncements of Latin American bishops' councils, I intend to explore the conditions under which this teaching has found institutional expression and served as motivational and legitimating ideology for social change in Latin America. My conclusions bear upon the issue of prophetic religious utterance and how it may be efficacious in the context of severe political repression as a defense of human rights and social change benefiting the powerless.

When it comes to the study of the future there really are no experts, merely varying degrees of ignorance competitively disguised as bravado or anxiety. Indeed, nearly all thought that purports to be serious about the future. Little more than a variation on the inadequate theme of either pessimism or optimism. I shall discuss some of the major deficiencies with these habitual ways of thinking about the future. Throughout the discussion my emphasis will be upon the unreliability of our normal ways of thinking about knowledge and control. I ask the reader to ponder carefully the implications of the argument. My major intent is to urge a reaffirmation of a timeless perspective on human experience that is more durable and realistic than our contemporary philosophies of hope and despair.

Throughout this essay, we will be concerned with parens patriae commitment, that is, with those cases where the state intervenes for the mentally ill person's own good. In particular, we will consider those cases where the purpose of the commitment is to provide treatment that has a reasonable chance of success within a limited period of time. Such commitment cases arise when the very mental illness that requires treatment makes the person unable to understand the value of treatment and thus leads him to reject it. Therefore it is characteristic of such commitment cases that the potential patient denies the need for treatment; the illness which diminishes his life also prevents him from forming a correct judgment regarding his mental and emotional condition.

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