[Marxism] a question I can't answer: Why do European capitalists prefer stagnation?

Jim Farmelant farmelantj at juno.com
Wed Mar 11 17:30:20 MDT 2009

On Wed, 11 Mar 2009 19:10:53 -0400 Louis Proyect <lnp3 at panix.com> writes:
> mihaly koltai wrote:

> > Europe (and especially Germany) is, at least partly, restrictive 
> government
> > policies and wage stagnation, and not 'rigidities', 
> 'institutional
> > sclerosis' and so on.
> I am not quite sure that this is what you are getting at, but I 
> think 
> that the presence of mass social democratic parties in Europe puts 
> certain limits on the ability of the bourgeoisie to "Americanize" 
> its 
> economies. The struggle with Sarkozy in France seems to epitomize 
> this.
That would make sense to me.  In countries with strong
trade unions and social democratic parties, loose
monetary and fiscal policies while resulting in
increased economic growth would also result
in wage hikes well in excess of any gains in
productivity, thus redistributing income
away from capitalists to workers.  Not surprisingly,
capitalists would tend not to be overly
enthusiastic about such policies.

In a country like the US where there is no
mass social democratic party (the Democrats
being a capitalist party that likes to pretend
on occasion that it is a workers party) and
where the power of organized labor was
largely broken back in the 1980s, capitalists
are a bit more tolerant of the use of fiscal
and monetary policies than they are in
Europe, since the redistributive effects
of such policies are less here.

Paul Sweezy over sixty years ago in
his book, *Theory of Capitalist
Development*, noted the political
limitations on the use of Keyensian
macroeconomic tools as instruments
for managing capitalist economies,
stressing that capitalists would tend
to be resistant to the consistent reliance
upon Keynesian economic policies because
the consistent application of such policies
over time would tend to empower
labor at the expense of capital.
Years later, Sweezy and Baran noted
that American capitalists eventually
did hit upon a way of pursuing
Keynesian economic policies in
such a way as to be not detrimental
to their own interests, namely what
Kalecki had referred to as military
Keyenianism, the use of military
spending to stimulate the economy.
That kind of economic stimulus
was much less threatening to capitalists,
indeed was generally quite profitable
to big capital.

Jim F.
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