[Marxism] New Deal

Jim Farmelant farmelantj at juno.com
Fri Dec 26 19:47:22 MST 2008

On Fri, 26 Dec 2008 17:24:03 +0000 abu hartal <abuhartal at hotmail.com>

> Second, today's New Deal exponents say that the 
> reason the New Deal was not more effective was that fiscal policy 
> was too timid. But in fact firms alreadysuffering low profitability 
> were scared that the power of the sack would diminishand that FDR 
> would be too supportive of labor. It was not reduction of 
> veterans'benefits or other federally created final demand that had 
> investment demandcollapse in 1937. It was the exhaustion of 
> inventory accumulation, coupled withdim prospects for profitability 
> from new investments--prospects dimmed by the appearanceof mass 
> labor unrest.  Now I am not saying that the higher rate of 
> exploitation  would havespurred capital accumulation on with the 
> prospect of higher profits. But unemployment insurance, public works 
> and pro-labor policies  did not save the day thenand they won't now. 

Keynes, himself. it should be pointed out, had some awareness of these
factors and pointed them out  in his, "An Open Letter to President
(http://newdeal.feri.org/misc/keynes2.htm).  There he wrote:

"You are engaged on a double task, Recovery and Reform;--
recovery from the slump and the passage of those business 
and social reforms which are long overdue. For the first, 
speed and quick results are essential. The second may be urgent too; 
but haste will be injurious, and wisdom of long-range purpose is more 
necessary than immediate achievement. It will be through raising high 
the prestige of your administration by success in short-range Recovery, 
that you will have the driving force to accomplish long-range Reform. 
On the other hand, even wise and necessary Reform may, in some respects, 
impede and complicate Recovery. For it will upset the confidence of the 
business world and weaken their existing motives to action, before 
you have had time to put other motives in their place. It may over-task 
your bureaucratic machine, which the traditional individualism of the 
United States and the old "spoils system" have left none too strong. 
And it will confuse the thought and aim of yourself and your
administration by giving you too much to think about all at once."


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