Michał Kalecki

Michał Kalecki, portrait drawing by Manuel García Jódar

Michał Kalecki (born June 22, 1899 in Łódź , † April 17, 1970 in Warsaw ) was a Polish economist . The self-taught economist anticipated knowledge of John Maynard Keynes and influenced the thinking of the Cambridge School and post-Keynesianism .

Life

Kalecki came from an impoverished Jewish family and began studying engineering at the Warsaw Polytechnic from 1917 to 1923 . After three years of military service, he took up studies at the Danzig Polytechnic again. Three years later his father became unemployed and had to drop out without a diploma. As a business journalist, he wrote about cartels and trusts, the economic situation in the textile industry and British-Soviet economic relations.

From 1929 he worked as an employee at the Institute for Economic and Price Research in Warsaw. Thanks to a Rockefeller grant , he was able to visit Stockholm in 1936 , then London and Cambridge . During the Second World War he became an employee of the Oxford Institute of Statistics , where he worked out a rationing plan.

After the war he worked on the United Nations Advisory Board in New York , where he was involved in the preparation of the World Economic Report 1947–1954, among other things. Political events during the McCarthy era led him to leave the United States in 1955. He returned to the Poland of the Gomułka regime , where, as a government advisor, he warned of an excessive investment quota. The anti-Semitic campaign in the wake of the Six Day War , which culminated during the March riots in 1968 , led him to resign from his position on the state planning commission. Kalecki founded a department for problems of planning and economic development at the Warsaw University of Planning and Statistics .

Economic, sociological and political theses

Kalecki's theoretical economic thinking can be summed up with the words “prosperity through demand”. From him comes the insight: "Workers spend what they get, capitalists get what they spend."

Keynesianism anticipated and expanded

In an article from 1933, Kalecki wrote that one of Rosa Luxemburg's mistakes was not to have understood that deficit-financed government spending should be viewed from the perspective of effective demand as “domestic exports”. After all, Luxembourg had anticipated the Keynesian foreign trade multiplier in connection with the pre-capitalist classes and countries.

The basic idea of ​​Keynesian employment policy is that the self-regulation of the market often fails, but that the state can remedy it. In contrast to Keynes, however, Kalecki came to his general theory by starting from Marx's reproduction schemes, which he developed in a coherent form into a business cycle theory .

1. Like Karl Marx and Michail Tugan-Baranowski before him, Kalecki demonstrated that it is investment , not private saving, that controls capital accumulation.
2. He then showed that a budget deficit creates employment in a recession.
3. Then he pointed out that wage cuts can only make a recession worse.
4. The interest rate depends on the supply and demand for the stock of money , and not on the flow rate of saving.
5. The expectation of future profits stimulates companies to accumulate.

According to GC Harcourt, Kalecki's version is much more satisfactory than the Keyneschen, because it is explicitly dynamic, in that it contains a cycle theory that leads to a growth analysis.

Paths to full employment

In 1944, as a staff member at the Oxford Institute of Statistics, a year after the publication of his skeptical article on the political cycle, Kalecki left a kind of political testament entitled Three Paths to Full Employment.

In terms of a policy of stimulating private investment, he found monetary policy measures, such as keeping interest rates low, to be ineffective. On the other hand, he recommended a modification of the income tax that allows replacement and new investments to be written off 100% immediately.

In principle, however, the private economy has the function of creating tools for the production of consumer goods, not the creation of production capacities or jobs for its own sake, since it is dedicated to the goal of making profit. However, entrepreneurs might only react positively to investment incentives if they placed trust in the political situation.

Deficit spending through investments by the state in infrastructure could induce sufficient savings to guarantee the financing of the national deficit in the long term. However, there is:

1. In the event of a rise in interest rates due to a lack of flexibility in the credit system, the risk of private investments being crowded out by the state ( crowding-out ; solvable through an “accommodative monetary policy”).
2. Inflation tendencies arise if the correct relationship between existing plants and available labor is not maintained. With full employment, strong unions could see prices skyrocket. Furthermore, government debt management is required to prevent the long-term interest rate from rising too much above the short-term.

Since he was extremely skeptical of the fine-tuning of state economic policy for economic as well as sociological and political reasons, he saw income redistribution as a third way through a restructuring of the income tax with partial shift to the wealth tax (while maintaining the tax incentives for new investments). This means that enough savings can be skimmed off to support the effective demand exerted by the state and private households. With this, Kalecki anticipated the basic idea of Trygve Haavelmo's “balanced budget” multiplier .

Kalecki opens his contribution Political Aspects of Full Employment (1943) with the following list:

“The 'leaders of the economy' oppose full employment that the state generates through its spending. The reasons for this can be divided into three groups:

1. The uneasiness about government interference in the employment problem itself.
2. The discomfort with the purpose of government spending (public investment and subsidizing private consumption).
3. The discomfort with the social and political changes that occur when full employment becomes permanent. "

Individual evidence

1. ^ Basil J. Moore: [1] Workers spend what they get; Capitalists get what they spend. Southern Economic Journal, vol. 57, no. 2 (January), 1991, pp. 868-870. Review of "Macroeconomic Problems and Policies of Income Distribution: Functional, Personal, and International, edited by Paul Davidson and Jan A. Kregel, Aldershot, England and Brookfield, VT: Edward Elgar Publishing Co., 1989".
2. ↑ Solow, RM (1975): Review of GR Feiwel (1975). In: Journal of Economic Literature, Vol. 13, No. 4, pp. 1331 ff. / Karl Kühne: Michal Kalecki - a pre-Keynesian Post-Keynesian. In: Post-Keynesianism: Economic theory in the tradition of Keynes, Kalecki and Sraffa / with contributions by Karl Dietrich, Hubert Hoffmann, Jürgen Kromphardt, Karl Kühne, Heinz D. Kurz, Hajo Riese u. Bertram Schefold. Metropolis: Marburg 1987. ISBN 3-926570-00-8 . P. 38 ff.
3. ^ Joan Robinson: Introduction . In: Kalecki: Studies in the Theory of Business Cycles . London 1966. pp. VIIff. SX
4. ^ GC Harcourt: Review zu Feiwel (1975). Economica, Vol. 80, No. 73, pp. 92 ff.
5. ^ T. Haavelmo: Multiplier Effects of a Balanced Budget. In: Econometrica. Volume 13. 1945. p. 311 ff.
6. ^ Ewald Nowotny: Political Aspects of Full Employment - Today. In: Economic Theory, Political Power and Social Justice. Linz University Writings Volume 7. Vienna 1987. pp. 455–476. ISBN 978-3-7091-8896-5 .
7. ^ Crisis and Prosperity in Capitalism - Selected Essays 1933–1971. Weimar 1987. pp. 235 f.

Works (selection)

Crisis and prosperity in capitalism. Selected essays 1933–1971. Weimar 1987. ISBN 3-926570-01-6

literature

• Karl Kühne: Michal Kalecki - a Pre-Keynesian Post-Keynesian. In: Post-Keynesianism: Economic theory in the tradition of Keynes, Kalecki and Sraffa / with contributions by Karl Dietrich, Hubert Hoffmann, Jürgen Kromphardt, Karl Kühne, Heinz D. Kurz, Hajo Riese u. Bertram Schefold. Metropolis: Marburg 1987. ISBN 3-926570-00-8 . Pp. 37-70.
• GR Feiwel: The Intellectual Capital of Michal Kalecki. A Study in Economic Theory and Policy. Knoxville / Tennessee 1975.
• Malcom Sawyer: Macroeconomics in Question: The Keynesian-Monetarist Orthodoxies and the Kaleckian Alternative. Wheatsheaf Books: Brighton 1982.

Web links

• Literature by and about Michał Kalecki in the catalog of the German National Library