Advertisement

Background of the Employment Act II: Keynesian Economics

  • Donald R. Stabile
Chapter

Abstract

This chapter will consider Keynes’ influence on economic thinking in the USA from the publication of The General Theory of Employment, Interest and Money in 1936 to the end of the 1940s, with a focus on fiscal policy and wages. Its goals are to pinpoint the components of Keynesian economics that formed a background to the Employment Act and to compare Keynesian economics with the political economy of a living wage to examine the feasibility of bundling them together into the hybrid system of redistributive economics, as happened in the USA. To do so, I will first review what Keynes said in that classic book and set forth the initial response his ideas found among economists in the USA during the late 1930s and the 1940s.

Keywords

Keynes Wages Unions Fiscal policy Inflation 

References

  1. Backhouse, Roger E., and Bradley W. Bateman. 2011. Capitalist Revolutionary: John Maynard Keynes. Cambridge, MA: Harvard University Press.CrossRefGoogle Scholar
  2. Berendt, Emil B. 2007. A Mathematical Note on Msgr. John A. Ryan’s Thought on the Minimum Wage. Review of Social Economy 65 (December): 459–473.CrossRefGoogle Scholar
  3. Chick, Victoria. 1983. Macroeconomics After Keynes: A Reconsideration of the General Theory. Cambridge, MA: MIT Press.Google Scholar
  4. News, C.I.O. 1945. See 10 Million Out of Work by 1946. CIO News 8 (August 20): 1.Google Scholar
  5. Clark, John Bates. 1968 [1907]. Essentials of Economics Theory. New York: Augustus M. Kelley Publishers.Google Scholar
  6. Clark, John Maurice. 1939. An Appraisal of the Workability of Compensatory Devices. The American Economic Review 29, Supplement, Papers and Proceedings of the Fifty-First Annual Meeting of the American Economic Association (March): 194–208.Google Scholar
  7. Crouse, Eric. 2018. America’s Failing Economy and the Rise of Ronald Reagan. New York: Palgrave Macmillan. Amazon Kindle Edition.CrossRefGoogle Scholar
  8. de Vroey, Michel. 2016. A History of Macroeconomics from Keynes to Lucas and Beyond. Cambridge: Cambridge University Press.CrossRefGoogle Scholar
  9. Dickman, Howard. 1987. Industrial Democracy in America: Ideological Origins of National Labor Relations Policy. La Salle, IL: Open Court.Google Scholar
  10. Elliot, John E., and Barry S. Clark. 1987. Keynes’s “General Theory” and Social Justice. Journal of Post Keynesian Economics 9 (Spring): 381–394.CrossRefGoogle Scholar
  11. Foster, William Trufant, and Waddill Catchings. 1924. Money. 2nd ed. Boston and New York: Houghton Mifflin Co.Google Scholar
  12. ———. 1925. Profits. Boston and New York: Houghton Mifflin Co.Google Scholar
  13. ———. 1928. Business Without a Buyer. Boston and New York: Houghton Mifflin Co.Google Scholar
  14. Gordon, Robert J. 2016. The Rise and Fall of American Growth: The U.S. Standard of Living Since the Civil War. Princeton, NJ: Princeton University Press. Amazon Kindle Edition.CrossRefGoogle Scholar
  15. Green, William. 1946. The American Federation of Labor’s Wage Policy. The Annals of the American Academy of Political and Social Science 248 (November): 1–5.CrossRefGoogle Scholar
  16. Hansen, Alvin H. 1936. Mr. Keynes on Underemployment Equilibrium. The Journal of Political Economy 44 (October): 667–686.CrossRefGoogle Scholar
  17. ———. 1947. Economic Policy and Full Employment. New York: McGraw-Hill Book Co.Google Scholar
  18. ———. 1964 [1951]. Business Cycles and National Income. New York: W.W. Norton & Co.Google Scholar
  19. Hartwig, Jochen. 2017. “Relative Movements of Real Wages and Output”—How Does Keynes’s 1939 Essay Relate to His Theory of Effective Demand? Journal of the History of Economic Thought 39 (June): 257–270.CrossRefGoogle Scholar
  20. Horwitz, Steven. 2016. The Problem with Keynesianism: A View from Austrian Capital Theory. In What’s Wrong with Keynesian Economic Theory? ed. Steven Kates, 106–122. Cheltenham, UK and Northampton, MA: Edward Elgar Publishing.CrossRefGoogle Scholar
  21. Kahn, R.F. 1931. The Relation of House Investment to Unemployment. Economic Journal 41 (June): 173–198.CrossRefGoogle Scholar
  22. Kaufman, Bruce E. 2018. How Capitalism Endogenously Creates Rising Income Inequality and Economic Crisis: The Macro Political Economy Model of Early Industrial Relations. Industrial Relations 57 (January): 131–173.Google Scholar
  23. Keynes, John Maynard. 1932 [1925]. Am I a Liberal? In Essays in Persuasion, ed. John Maynard Keynes, 323–338. New York: Harcourt, Brace and Company.Google Scholar
  24. ———. 1965 [1936]. The General Theory of Employment, Interest and Money. New York: Harcourt, Brace & World, Inc.Google Scholar
  25. Kim, Soo Haeng. 2009. Keynes’ Bourgeois Socialism. In Heterodox Macroeconomics: Marx, Keynes and Globalization, ed. Jonathan P. Goldstein and Michael G. Hillard, 227–237. London and New York: Routledge.Google Scholar
  26. Klein, Lawrence R. 1961 [1947]. The Keynesian Revolution. New York: The Macmillan Co.Google Scholar
  27. Laidler, David. 1999. Fabricating the Keynesian Revolution: Studies of the Inter-War Literature on Money, the Cycle and Unemployment. Cambridge: Cambridge University Press.Google Scholar
  28. Lawlor, Michael S. 2006. The Economics of Keynes in Historical Context: An Intellectual History of the General Theory. New York: Palgrave Macmillan.CrossRefGoogle Scholar
  29. Lindert, Peter H., and Jeffrey G. Williamson. 2016. Unequal Gains: American Growth and Inequality Since 1700. Princeton, NJ: Princeton University Press. Amazon Kindle Edition.CrossRefGoogle Scholar
  30. Mann, Geoff. 2017. In the Long Run We Are All Dead: Keynesianism, Political Economy, and Revolution. London and New York: Verso Press. Amazon. Kindle Edition.Google Scholar
  31. Marglin, Stephen A. 1990. Lessons of the Golden Age: An Overview. In The Golden Age of Capitalism: Reinterpreting the Postwar Experience, ed. Stephen A. Marglin and Juliet B. Schor, 1–38. Oxford: Clarendon Press.Google Scholar
  32. Mill, John Stuart. 1969 [1909]. Principles of Political Economy. New York: Augustus M. Kelley Publishers.Google Scholar
  33. Mitchell, Wesley C. 1922. The Crisis of 1920 and the Problem of Controlling Business Cycles. The American Economic Review 12 (March): 20–32.Google Scholar
  34. ———. 1970 [1913]. Business Cycles. New York: Burt Franklin.Google Scholar
  35. Phelps, Orme W. 1948. Collective Bargaining, Keynesian Model. The American Economic Review 38 (September): 581–597.Google Scholar
  36. Pressman, Steven. 1991. Keynes and Antipoverty Policy. Review of Social Economy 49 (Fall): 365–382. In What’s Wrong with Keynesian Economic Theory? ed. Steven Kates, 183–200. Cheltenham, UK and Northampton, MA: Edward Elgar Publishing.Google Scholar
  37. Roosevelt, Franklin D. 1933. Statement on Signing the National Industrial Recovery Act. June 16. Online by Gerhard Peters and John T. Woolley. The American Presidency Project. http://www.presidency.ucsb.edu/ws/?pid=14669. Accessed November 23, 2013.
  38. Rosen, Elliot A. 2005. Roosevelt, the Great Depression, and the Economics of Recovery. Charlottesville and London: University of Virginia Press. Amazon Kindle Edition.Google Scholar
  39. Rutherford, Malcolm. 2011. The Institutionalist Movement in American Economics, 1918–1947. Cambridge: The Cambridge University Press.CrossRefGoogle Scholar
  40. Ryan, John Augustine. 1906. A Living Wage: Its Ethical and Economic Aspects. New York: The Macmillan Co.Google Scholar
  41. Samuelson, Paul A. 1948. Economics. New York: McGraw-Hill Book Co.Google Scholar
  42. Simpson, David. 2016. What’s Wrong with Keynesian Economics? In What’s Wrong with Keynesian Economic Theory? ed. Steven Kates, 201–217. Cheltenham, UK and Northampton, MA: Edward Elgar Publishing.CrossRefGoogle Scholar
  43. Slichter, Sumner H. 1934. Towards Stability: The Problem of Economic Balance. New York: Henry Holt and Co.Google Scholar
  44. ———. 1936. The Adjustment to Instability. The American Economic Review 26, Supplement, Papers and Proceedings of the Forty-Eighth Annual Meeting of the American Economic Association (March): 196–213.Google Scholar
  45. Stabile, Donald R. 2016. The Political Economy of a Living Wage: Progressives, the New Deal and Social Justice. New York: Palgrave Macmillan.CrossRefGoogle Scholar
  46. Stabile, Donald R., and Andrew F. Kozak. 2012. Markets, Planning and the Moral Economy: Business Cycles in the Progressive Era and New Deal. Cheltenham, UK and Northampton, MA: Edward Elgar.CrossRefGoogle Scholar
  47. Veblen, Thorstein. 1935 [1904]. The Theory of Business Enterprise. New York: Charles Scribner’s Sons.Google Scholar
  48. ———. 1908. Professor Clark’s Economics. Quarterly Journal of Economics 22 (February): 147–195.CrossRefGoogle Scholar

Copyright information

© The Author(s) 2018

Authors and Affiliations

  • Donald R. Stabile
    • 1
  1. 1.Department of EconomicsSt. Mary’s College of MarylandSt. Mary’s CityUSA

Personalised recommendations