Friday, October 28, 2011

Keynes on the War Economy

Doing a little more reading on the war economy and post-war expectations. This was interesting - it's from a radio broadcast "Will Re-armament Cure Unemployment" (1939):


"What a difference all this makes! It is not an exaggeration to say that the end of abnormal unemployment is in sight. And it isn't only the unemployed who will feel the difference. A great number besides will be taking home better money each week. And with the demand for efficient labour outrunning the supply, how much more comfortable and secure everyone will feel in his job. There will be other reasons for plenty of anxiety. But on of the worst anxieties is anxiety about getting and keeping work. There should be less of that than for years past.


I have a special extra reason for hoping that trade unionists will do what they can to make this big transition to fuller employment work smoothly. I began by saying that the grand experiment has begun. If it works, if expenditure on armaments really does cure unemployment, I predict that we shall never go back all the way to the old state of affairs. If we can cure unemployment for the wasted purposes of armaments, we can cure it for the productive purposes of peace. Good may come out of evil. We may learn a trick or two which will come in useful when the day of peace comes, as in fullness of time it must."

8 comments:

  1. Where did you get this address by John Maynard Keynes from? The "Keynes on the Wireless" anthology? Or somewhere else?

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  2. The problem is that once the war is over, there is often a very large unemployment resulting from people being withdrawn from wartime production. That's why there was a spike in unemployment in 1948.

    But does the same not apply to peacetime public works as well? These works are meant to be temporary. Once a bridge is built, you wouldn't build a second bridge over the same bridge.

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  3. This gem is a great find. I hope Daniel will tell us where we can find it.

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  4. Prateek Sanjay you cannot be referring to the UK as there was full employment throughout the post war period ( until 1973 ). 1948 was the coldest year of the century and there was a severe coal shortage as a result. But no demand problem thanks to economic controls and demand management. You must be very lacking in imagination if you cannot think up projects to spend money on!

    ReplyDelete
  5. "You must be very lacking in imagination if you cannot think up projects to spend money on!"

    Yes, all the groundwork can be done on a Super-Conducting Supercollider, and then it can be shelved (add http:)

    //en.wikipedia.org/wiki/Superconducting_Super_Collider

    Or all the work can be done on a nuclear waste depository, and it can be shelved.

    //en.wikipedia.org/wiki/Yucca_Mountain_nuclear_waste_repository

    Or a corporation to produce synthetic fuels can be funded:

    //en.wikipedia.org/wiki/Synthetic_Fuels_Corporation

    There are any number of wonderful projects like these on which the federal government can spend the money of taxpayers and future generations.

    ReplyDelete
  6. A word of advice, Mark: criticizing someone who thinks there are worthwhile public investments to be made by furnishing examples where public investments were nixed probably isn't the smartest argument you could have come up with.

    ReplyDelete
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