Wage-earners’ Investment Funds

Abstract

During the Second World War Keynes (1940) proposed a system of state-administered savings out of wages. The purpose of his proposed system was to reduce private consumption to allow for war-time production requirements in as equitable a way as possible (see Maital, 1972, for a discussion). Keynes saw implications of his proposal well beyond the special needs of the British war-economy. He suggested (Keynes, 1940) that ‘the accumulation of working class wealth under working class control [could induce] an advance towards economic equality greater than any we have made in recent times’. What Keynes had proposed was a kind of wage-earners’ investment fund. Advocating the partial socialisation of investment was clearly consistent with Keynes’s view, expressed in the General Theory, that capitalist institutions did not organise the process efficiently: ‘When the capital-development of a country becomes a by-product of the activities of a casino, the job is likely to be ill-done’ (Keynes, 1936).