Lenin-Keynes Capitalism

Introduction

Before Keynes, the problem of unemployment had been for the most part neglected. Since Ricardo, the problems that economists had felt were suitable to deal with had instead been allocation of resources and productivity. Ricardo wrote to Malthus, "Political Economy...should be called an enquiry into the laws which determine the division of the produce of industry amongst the classes who concur in its formation (Beasley-Murray, 48-56)."

If unemployment was ever examined at all, it was not studied as a variable, but instead was viewed as a fixed factor. Because of the belief that underemployment equilibrium was impossibility, economists had avoided the problem of unemployment. The result was that by the 1930s, when economists were forced by The Great Depression to become interested in employment, their explanations were unrealistic and inaccurate (Hegel, 20-31).

Discussion

Keynes was the first to make a successful study of the factors which cause employment and, of course, the first to show that these factors could set the equilibrium rate of employment below full employment.

In doing this, Keynes shifted the emphasis in economic problems from those described by Ricardo to the problems of employment. Even if economists do not agree with Keynes's analysis, they have still been forced to examine unemployment much more than in the past (Mulgan, 14-19). Keynes's influence is so widespread that employment has become a concern in many fields of economic analysis that until relatively recently had not been related by economists to unemployment at all, such as, for example, international trade.

It is only since Keynes that the consequences of international trade on a nation's employment, which is such an important consideration in the United States today, have been analyzed. Seymour Harris believes that Keynes's shift in emphasis to problems of employment is his greatest contribution, and it is, no doubt, one of his most revolutionary (Hobsbawm, 24-29).

In my judgment, Keynes's opinion was truly revolutionary. It is true that some individual ideas in opinion had appeared in the writings of economists before Keynes, including those of Malthus, Hobson, Robertson, Kahn, and Wicksell. It also must be acknowledged that the New Deal had already put into practice Keynes's determination that the government must invest in public-works projects during a depression (Mulgan, 14-19).

But the arguments which show that opinion is revolutionary are still stronger. Keynes was the first person, by refuting Say's Law, to expose the assumptions economists had been making for the past hundred years; in doing this, Keynes created a much more "general" theory than had appeared in the past (Hegel, 20-31). Even if government policies had anticipated some of his ideas, Keynes was the first person to show that these policies were theoretically sound (Lenin, 11-16). And Keynes's conclusion that policies of government investment were necessary in a depression was radically different from the policies advocated by most economists since Adam Smith--it truly marked an end to the advocacy of laissez-faire.

Unlike many economists whose individual ideas appeared, Keynes was able to bring about a revolution by getting these ideas accepted by economists ...