Comment on Professor Lerner's Paper: A Marxist View Author(s): JOSEPH HALEVI Reviewed work(s): Source: Social Research, Vol

. 46, No. 2 (SUMMER 1979), pp. 240-254 Published by: The New School Stable URL: . Accessed: 01/01/2013 22:51
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brought have lost the role of equilibrating supplyand demand. This content downloaded on Tue.The above mechanism suggests and not regulatesupplyand demand./ Commenton Professor / Lerner'sPaper: A Marxist / / BY JOSEPH HALEVI View J^erner's argument can be dividedintotwoparts. 1 Jan 2013 22:51:48 PM All use subject to JSTOR Terms and Conditions .otherwise anyadjustment where In an in movements via prices economy prices.The content multiplier Keynesian formassertsthatit is possibleto move froma given simplest of outputto fullcapacity(when the degree unused capacity without latteris supposed to coincidewithfull employment) fullWhen the relations. in the cost-price any major change in increase levelof outputis reached.anyfurther employment the in since income will be reflected existing prices.inflathe level of monetary tion cannot be curbed by curtailing in spendingtherewillbe a since to a reduction expenditure. money the additionaldemand cannotaccommodate level of capacity thatpricesdo in real terms. to keep thewage/productivity relation necessary in character and it ends with latter dynamic partis essentially the proposal of issuing wage permitsas a means to curb of I shall not discussthe practical inflation.but the level of profits of income instead. validity cost-push to thetheoretical butshallconfine theabovesuggestion myself in its of Lerner'sargument.This is possibleonlybethe distribution mustbe cause spare capacity dealin of the pricemechanism working ing withthe asymmetrical the Keynesiansystemand one dealing with the measures The constant.

in moneywagesunder is to be seen in the downward rigidity and in theirrapid upwardadjustment to the static conditions. 65-86."The (Neo)-Classical and theReappraisal of Keynes' Resurgence in T. productivity widelyaccepted economicanalysis.2 In thiscase unitpricesare up to a point target 1Cf.: Inflation. "HowRecession FeedsInflation: PriceMarkups ina Concentrated Economy.. only because prices are (rightly)viewed as being costUnderthesecircumstances determined. and Productivity Mass. wages do not fallbehind the expectedrise in prices. 1976). Wachtel and P. Boorman. thedynamic condition for price stability is givenby wage increasesproportional to The in a result above is gains. 1977. however. Hines.There is no need trading. D.Current Theoryof Employment. That is. T.If. toattach towagesanyspecial behavior. Adelsheim. Issues eds. Paolo Sylos-Labini. we assume recontracting to be an rather than a rule1 and we start with an initial set of exception relative we to consider false wrong prices. oughtimmediately hence disequilibrium. rate of inflation under dynamic ones. A. The important point in Lerner'sargument(withwhichI the factthata cut in monefully agree) lies in havingstressed first and foremost tary spending generatesunemployment This is possible ratherthana declinein the rate of inflation. SaxonHouse/Lexington Books.pp. Corporation. Ct. 1 Jan 2013 22:51:48 PM All use subject to JSTOR Terms and Conditions . Havrilesky and J.pp. Another at wayoflooking the problem is to takeintoaccountthe formation of a concentratedsectorin whichmarkups are a function of a minimum rateof profit. TradeUnions. September/October This content downloaded on Tue.1974). presented variety of ways. as the norm. M." Challenge.: AHM Publishing Theory (Arlington Heights. H.A MARXISTVIEW 241 fall in outputand employment. for instance. 29-39. saryprerequisite this view is not it and has been in a fact. to corresponding According thefailure of thepricemechanism Professor Lerner. contemporary General Remarks I shallbeginby arguingthatwage flexibility is not a necesof As a matter forachieving fullemployment. new. H." in Monetary and Policy 111. G. (Lexington.

The Path of Economic Press. 95-100. direction. Suppose an exogenousincrease full-employment 3 Cf. opposite In order to pursue this task.I shalltherefore argue imperfections. employment only recently oped in a fully fledgedtheory by Professor Adolph Lowe in his fundamental workThePath ofEconomic on which Growth. it is necessaryto thinkof not in "abstracto" but in relation to the structure equilibrium of the economy. in full to attain to fall order when have even that. 1 Jan 2013 22:51:48 PM All use subject to JSTOR Terms and Conditions .This is determined by output and labor coefficients at one time and existing any by the fact that is specificand can be broadlydivided into two production nonhomogeneous products:capital goods and consumption Taken and output and labor goods.1960). failsto achieve full employwhya private-enterprise system from "perversebehavior.242 SOCIAL RESEARCH relatedto changes relatedto demand and positively inversely of in costs. "Stabilityand Full Employment.The above approachhas in myopinionthe merit in of moderncapitalism the historical development reflecting whichchangesin the market tookplace priorto (if structure not independently of) the makingof a strongtrade-union determined movement.3 Demand in a StaticStructural Framework Effective or steady-state Let us assumean economy under stationary equilibrium. together. wages the (capitalist) economymay well react in an employment. the argument below is based. pp. Adolph Lowe and StanStability Growth ford Pulrang. think. "specificity" coefficients give us the degree of absorptive capacityof the This line of while to Marx and back system. by the unevendiffusion beingchiefly I of technical these viewsdo not explain Yet." ment of resources"abstracting" market and all the rest. progress. This content downloaded on Tue. thought. Nicholas Kaldor. dating used by Kaldor in 1938 to explain the relationship between and been develhas fluctuations. 103-119. pp. (Cambridge: Cambridge University 1976)."in his Essays on Economic and Growth (London: Duckworth.

"Full OxEmploymentby StimulatingPrivate Investment?". inventoryaccumulation might appear undesired to the in theconsumption-goods sectorso thatthelevelof capitalists willbe sloweddown. of consumption goods has been accumulating. thereby consumption-goods prices and preventing the resourceshift ing the previoussituation from If on the other hand the place. Employment can expand thechangein thecomposition of capitalequipment onlyafter has made theinvestment-goods sectorcapable of growing at a due to the reducedwages. workers orderfortheadditional capitalgoods work with.Since it is alreadyworking increasein the thanproportional a more have to be. In in theannualrateofgrowth to be employed. creased. Under conditions of perfect and simultaneous price wouldfall.4Meanwhile.a surplus higherrate. This content downloaded on Tue. Thus relative panded consumption-goods the economy a declinein the supplyof consumpexperiences to the previousperiodand at the same tiongoods in relation time an increase in employment. 4 Cf.A MARXISTVIEW 243 of thelaborsupplytakesplace.Hence monetary as an profitability indicator of investment demand does not here perform any and the shiftin capital funds has to be role. Considernow thecase in which an increasein thesupplyof labor does lowerthe moneywage. can be exindustries savingratio. initially. vestedin the consumption-goods sectoruntilthe processof of capital stockto the expanded adjustingthe composition labor forceis completed. taking priceswererigid. given the money wage. profits. Michael Kalecki. ford Economic Papers 7 (March 1945): 83-92. activity in the absence of an increasein investment in the capitalAn increasein investment will be possible goods industries. 1 Jan 2013 22:51:48 PM All use subject to JSTOR Terms and Conditions . therefore must rise.triggering a Keynesian recession. restorflexibility.But thismeansthat mustbe providedforthemto sectorwill have to be inthe output of the capital-goods therewill at that the capital-goods to the industries. equilibrating sectorial broughtabout through capitaltaxation. consumption-goods prices The resulting windfall should not be inhowever.

demand by stimulating mentof effective privateinvestment in relationto full-employment has a limitedvalidity goals.sustaining but the from latter meansessentially falling. capital This content downloaded on Tue. in the is allocated and pro tantomoreinvestment sector intotheconsumption-goods sector. 1 Jan 2013 22:51:48 PM All use subject to JSTOR Terms and Conditions .in order for the economyto move on a higherpath of capital shouldno longeract on thebasis accumulation entrepreneurs of pecuniary of the "maximization" (2) The manageprofits. Keynesian necessary Actually. free to it is when resources. in prima persona in the allocationof investment intervenes shiftin regoods there is no assurance that the necessary in eithercase. economy in the sphereof privateinvestment. modelis bothundulycomplicated lying coeffiand of labor the from arises output rigidity complexity 5 This is because under stationary the change in the conditions or steady-state level(rate) an unchanged achieved is initially of capital structure through equipment is poured lies in thefactthatlessinvestment The difference of capital-goods output. pointsout.In fact. sourceswill materialize I have dwelton thisexample(takenfromLowe's model)at some lengthbecause it bringsto the fore two elements:(1) nor the Even whenwages fallneither priceflexibility perfect sector in the consumption-goods of inventories accumulation will generatea reactionsuch that the additionalsupply of as Lowe correctly laborwillbe absorbed.244 SOCIAL RESEARCH the in the lattersectorwill interpret only if entrepreneurs lower from in sales of consumption reduction goodsstemming This of indicator an rates as largercapitalrequirements. providing goal the government It can be argued thatin such a situation deficit in traditional Keynesian spending might step through demand the level of effective policies. wage as a class with invest thatcapitalists is doubtful sinceit implies of the macroeconomic employment. however.5 but stateintervention is thattheunderto theabovereasoning criticism A possible Its and too simplistic. However. itdoes preventing in of investment the sectorial notimply composition directing Thereforeunless the government the required proportion. policiesmay constitute is not a morelaissez-faire The alternative. a hindranceratherthan a stimulus.

spending run demandin theshort wouldsolvethe problem of effective would maintainthe balance between while price flexibility in the long run.howhence the savingratio. dynamic or implicitly made. cludingLerner's. withgiven capital input coefficients (that is. should increase wages along with prodemand otherwise eitherthe problemof effective minedby the above threeparameters. the Starting to produce a unit of amountof capitalequipmentnecessary over output). exceed or fall shortof the requiredproportion. arose in the In thisway a curiousand paradoxicalsituation Western It was assumedthatgovernment literature.may ever.Since.Instead. demand and capacity This content downloaded on Tue. however(devotedto the relationship it will appear that tween wage increasesand productivity). It follows full employment.Its simplicity of the real economy. 1 Jan 2013 22:51:48 PM All use subject to JSTOR Terms and Conditions .A MARXISTVIEW 245 cientswhichdo not allow a fall in wages to be ipso facto levels.are explicitly Framework Relationin a Structural The Wage Productivity modelsis to be The mainconcern of post-Keynesian growth underwhichfull seen in thedefinition of thesetof conditions over time given the rate of can be maintained employment of and growth population has been foundthatthe shareof investment deternationalincome cannot exceed a certainproportion thenthat. theseveryfactors thestrong constitute pointsof a Marx-Lowe type model as soon as we compare it with post-Keynesian inones on whichcurrent policyrecommendations. sectormodelis in no wayrepresentative beIn the nextsection.a slowand by matched by higheremployment is mechanism no means smoothand automatictransitional may be seen in the factthata tworequired. the share of investments. willmake its appearanceor priceswilldecrease. adjustments of willhave to be made through changesin the distribution incomeon thebasisof upwardand downward priceflexibility.

see J. the affect way profoundly problems in the shortperiod The contradiction betweenconsumption . Dow. are in fact and in thelongrunand thelongrunbottlenecks in a socialist of thecentral of a realistic theory growth problems economy. 1970. òcientia. however.however. by stimulatinginvestmentin a wrong direction (as already pointed out by Lowe). As a result.the decision to change the composition of capital equipment will be taken ex ante whereas prices should adjust afterthe fact.7 Leaving aside forthe timebeing the question of the balance of trade. factors. saving any higher consumption. . "Theory ot Growth in Ditterent bocial Systems. R.246 SOCIAL RESEARCH There is a fallacyin this. . Michael Kalecki. May/June This content downloaded on Tue. . The general case. The Management 1945-60 (Cambridge: Cambridge UniversityPress.6 To quote Michael Kalecki (which leads to the relationshipbetweenwages and productivity): us directly of "longrun Nowherein Western modelsappearsthe problem income When national bottlenecks. 1 Jan 2013 22:51:48 PM All use subject to JSTOR Terms and Conditions . far from coordinatingthe structureand the level of investment. The argument has been constructedon the basis of a "one commodityoutput. is that of a systemwhose output is divided into a set of nonsubstitutable goods. resulting gaps technological the balanceof thelatter tradeand to maintain good by foreign reeithersome exportshave to be increasedor some imports willbe usually These operations placed by home production. 7 Cf." which is both investibleand consumable.In this context I would like to stress once again that governmentactivitiesin the West. .and only by a flukewillthiscorrespond to full-employment requirements. of capitaland labourand in this outlays by higher accompanied of economicgrowth. Kalecki's remarks fit particularlywell in a framework 6 For an Economy of theBritish empirical analysis. Thus any increase in the into higher real investsaving ratio is ipso facto transformed takes the form of in ratio the fall likewise ment. C." growsat a development industries of certain lags behindthatof highratetheexpansion or because of certain demandfortheirproducts organizational be made have to The . particularlyPart IV. 1964). may even add further"rigidities"to the already existingones.

productivity increases more in the capital-goods rather than in the avsector.forinstance. in a closed economy. providedthe savingratiodoes not fallbelow the fullof theformation level. profit willincreasein margins the capital-goods sector.on the one hand. vis-à-vis mechanism anyequilibrating display is validonlyin withproductivity to increase wage ratesexactly This content downloaded on Tue. consumption-goods They chiefly changethesaving ratioforanygivengrowth rate.that to a laborproductivity in thecapital-goods willcorresector higher a lower level of investment with unit spond higher profits. phenomenon giving stagnation occur in the consumption-goods if in sector productivity the latter were to rise more thanthe average. giventhe composition avoid inflationary it is necessary forwagesto be tiedto strains not to the and averageof weighted output consumption-goods in bothsectors.Pricesmaynot fall in the same proportion. willlead which. 1 Jan 2013 22:51:48 PM All use subject to JSTOR Terms and Conditions . That is. to a slow down in the aggregate rate. It mustbe investment notedthatin myscheme(borrowed from Lowe) theinflationary pressureon consumption by a goods can be mitigated of the in in favor the structure of change capitalequipment latter.however. quite possible. excess-demand in consumption-goods inflation margenerate ketswhile. laborproductivity If. increasesin capital-goodsindustrieshave a Productivity different effecton the economythan those in completely industries.but onlyindirectly and aftera certain time.A MARXISTVIEW 247 In short. can The same rise to tendencies.It is necessary first to have a shift in the composition of capital equipmentwithwages remaining unchangedin the transitional It is period. sincethe capitalist economy fullemployment.on the otherhand. In thiswaytheydo influence the level of real wages. ment.This leads to theproblem employment and utilization of thesurplus(a topicdealtwith byPaul Baran and the the special case where productivity changesare uniform share of investment to the requirements offull employcorresponds does not such as Lowe's. consumption-goods raisingwagesby the weighted erage of productivity changesin both will. to of capitalequipment.

wage Yet the inflationary pand less than the average productivity. inducedby thatanyexpansionof investment notices correctly increase will eventually productive government expenditure capacity.Thus further and largerdeficit management be necessary.The important point and onlyto is directed on where investment dependent mainly ifthe In relation.Bationof whatand whereto investto capitalists' since it was exran's argumentis all the more remarkable pounded in a period of relativeprice stability. substitution notionof nonimmediate blendswiththe arguhow Baran's to see It is easy analysis mentdevelopedin thispaper and withKalecki'sobservation on long-run bottlenecks. to which theviewaccording He beginsbycriticizing anytype of spendingis to be welcomed. then.too. of Growth This content downloaded on Tue.248 SOCIAL RESEARCH in his famousThePolitical whichraisesan Economy ofGrowth8). of flow willnotbe matched incomes a output. 1957). a lesserextent on thewage/productivity wage bill were to expand along withthe average increasein of employed labor.Thus the wage bill should increaseonly pari theexpansionof consumption-goods output(inclupassu with rates mustexunit sive of housing).which in turn will outpace the level of effective would demand. on the groundsthatit mainHe tainsor increasesthe level of demand and employment. was aware of the prob8 Paul Baran. hence an inflationary as is seen inflation is that tionwillarise. Keynes. Now.but productivity plus thenetaugmentation would take consumption goods were to expand less. 1 Jan 2013 22:51:48 PM All use subject to JSTOR Terms and Conditions . The Political Economy (New York: MonthlyReview. inflation and between the about relationship important point deficit-spending policieswhenthe latterleave the determinadecisions.inflation place anyhow. fact. strains theywillbe feltin all those branchesof the industry operatingunder roughly and wherethe inelastic is wheresupply conditions competitive also holds. by proportional situain particular consumption goods. if public spendingis directedtowardnonproductive in money theexpansion activities armaments) (in Baran'sview.In our case. since willnot disappearaltogether.

M. the advancedcapitalist Kalecki."9 thatthereis no reason to assume that"the system seriously which in use". the factors of are misemploys production in the volumenot the direction of hence: "It is determining actual employmentthat the existing systemhas broken thus dismissing to socializeeconomic down. propositions termsthan the first one.however. The GeneralTheory is possibleto prove thatat any one timea definite thevolumeof outputand itsstrucbetween exists relationship has to be maintained. 379. 157. 1936). 9J. justmentprocessis by no means continuous the structural Yet the sourcesof the factors adjustimpeding of characteristics have to be foundin thesocioeconomic ments Thus economies.In thiscontextthe level of incomeand emrather is tied to changesin the level of investment ployment Interest and Money(London: Macof Employment. This content downloaded on Tue. from in investment thattheshift of theeconomy capitalgoods sectormayfailto take place to the to the consumption-goods requiredextent. he maintained mostprofitable. p. in the first the adto show I tried as section.A MARXISTVIEW 249 in relationto the level of of investment lem of the structure effective demand. p. the composition deof the the cause of on wages becomes problem effective features it is because of the oligopolistic mand. On one hand he acknowledged clear evidence fromexperiencethat the investment policy whichis sociallyadvantageouscoincideswiththat which is On theotherhand.but he tooka somewhat position ambiguous that "thereis no towardit. 1 Jan 2013 22:51:48 PM All use subject to JSTOR Terms and Conditions . to the barrier as of changesin pointedat thedegree monoply of the markup The constancy of investment. 10Ibid. and automatic. Furthermore."10 any necessity Since the in muchstronger last are cast activity. by assuming of incomegivenand exogenously thedistribution determined. More exactly. model formed Today withthe use of a pure reproduction nonshiftable and capital equipgoods by nonhomogeneous ment. I would assume thattheyreflected more Keynes'sthought closely.. Keynes. if full employment turalcomposition.

250 SOCIAL RESEARCH thanto thosein productive The latter capacity. 1971). Kalecki provided the with the satisfaction the process described theoretical basis for understanding foundations to explainthesocioeconomic above. 1 Jan 2013 22:51:48 PM All use subject to JSTOR Terms and Conditions .pointing among things contradicunderlying tion betweendeficit-spending policies and full employment There is no need. the composition Remarks Closing to Lerner's hypothesis. would happen (in fact. p. positively deciinvestment this is because in an oligopolistic economy a sionsare made withpurposesotherthanthoseof providing to full rateof accumulation along employment necessary keep of social needs. Selected Essayson theDynamics of theCapital Economy (Cambridge: Cambridge UniversityPress. (although points such Exportsplay the same role. typeof change of centrally planned socialist is indeed a characteristic can be accompaniedby economieswherea fallin investment This phenomenon an increase in output and employment. as the chiefexplanation to resortto armament expenditure of American feature it to a basic capitalism).Baran sought the other out it.has happened) if more investment rather weredevotedto consumption-goods thancapital-goods There is an important to industries. "Without markets(export) profitsare conditionedby the abilityof to consumeor to undertakecapitalinvestment.If pricesare indeed relatedto increasesin the wage/productivity ratio. and theroleplayedbyarmaments. The argumentsuggests. contrary betweenwages and prothatthereis no unique relationship in relation to pricesas long as we do not definehow ductivity and whereinvestment goods are allocated. Michael Kalecki.namely."11 capitalists 11Cf. 86.however. corollary the above statement. as Kaleckiput it. This content downloaded on Tue.that consumption-goods prices will be lower and the wage/productivity ratiohigherdue to the change in of output.

In WesternEurope the labor movement chief a that or aware investment. outputand employment This is not to denythatsometimes (as I believeis the case to the now forItaly)the levelof wagesis too highin relation the latter as Yet as of investment. price cantly wage policy in many casesthisdoes noteliminate thefallin since. wage curbs are nonetheless accompaniedby cuts in at home."Scienceand Society R.A MARXISTVIEW 251 true in the lightof capitalist This is particularly countries' to exportquite independently fromwhatis needed tendency full In this to relation to achieve (in imports) employment.12 A PoliticalFootnote Lerner'sessay witha on Professor I ended my comment about the politicalawarenessamong the workingstatement in Western classforces Europe thatincomeor wage policiesas are not tied to investment wellas "socialcontracts" programs and social of both full-employment aimed at the satisfaction is true: the level of home needs at large. "On Incomes 33 (Fall 1969): 415-425. This is best exemplified 12Cf. case the nonuniqueness of the wage/productivity relation also demand holds but in reverse:whenever falls foreign signifito foster is advocated a competition. long-run and wage policiesare bound to fail(as theyhave) in contracts the absence of some formof socialist planning. exports. Quite the contrary seen as a passive(dependent)variis increasingly investment are looked upon as the truly whereas able. This content downloaded on Tue. Nuti. indepenexports in the so-calledNew Ecodent one. Heidner. rate long full-employment in the formof social does not flowback to the community to implement it is impossible accumulation any typeof wage/ is income policy. Lontagarfonder (Stockholm. 1975). M. capitalist directly indirectly which based on considerations sourceofjobs. D.however. is nevertheless is This do with to have nothing whysocial stability. Policy. 1 Jan 2013 22:51:48 PM All use subject to JSTOR Terms and Conditions .

by export-led generated demandhas policiesis wellknown:once thelevelof domestic or limited. as a dependent abroad home at depends on stable prosperity prosperity dethe viciouscircleof stop-gopoliciesis altogether provided feated. 5-14. J. Journalof Economics. pp. Robinsonand F. This content downloaded on Tue. actsas a constraint thusbecoming a hindrance to The circle vicious (profit) expansion. the breakdown of socialreformnamely. been compressed the chancesthatimports willbe reduced and exportsincreasedby the desired amount are the more the same policiesare adopted by all counweaker. policy all the countriesit can be achieved only throughstop-go of the working-class policiesat home.whichcan be summarized it was takenfor to the early'seventies Fromthe late 'fifties full were not welfare and that social employment granted economicset up. in the case of the policyis to be maintained. The main contradicthe truly indetioninvolved becomesclear.Exportsrepresent the indicatorof its profpendent variable of the system. In trieswiththe avowedgoal of exporting thewage/productivity thecase offailure relation can no longer butwillhave to be revised be takenas parametric if downward All the same. to thesameareas. causing withnegativeeffects on the level or tendencies stagnationist on the rate of increasein employment.252 SOCIAL RESEARCH in whichthe levelof domestic nomicsof Cambridge. demand on exports. Cambridge 13 "What Has Become of Employment Policy?". as follows: ism. 1 Jan 2013 22:51:48 PM All use subject to JSTOR Terms and Conditions . It is againstthissocioeconomic thatthecrisis of background whatI think has beenthebasicpolitical of pillar postwar Europe has to be evaluated.13From the viewpoint movement theaboveshowson one hand thatthelevelof social beenconsidered had exports could havebeenhigher well-being On the otherhand. at homeis likely to hitthe successtherelative impoverishment export industries in the competing countries. to which Yet to the extent this is carriedout by itability. of a capitalist withtheworking incompatible March showsthatstable variable. Wilkinson.

Britain'sEconomic Problem:Too Few Producers This content downloaded on Tue. The crisis of thesocialdemocracies also stemsfromthe fact thattheyacceptedin mostcases wage or incomepoliciesasexistedbetweenthe latterand sumingthatno contradiction the social-welfare system. 1976). todaythesocialdemocracies in curtailing them.entailingthe industrial decay of with the maintenorthern France and Wales.. The clearly statedby twoOxford in a recentbook. Robert Bacon and Walter Eltis.e. It is interesting to see that the crisisof social reformism manifests itself as a political of the socialdemocracy crisis and notof theconservative This is becausewhilethe social parties.Scotland. (London: Macmillan.The generalargument especially was thatthestatesectorwouldsupplyadvancedsocialservices to thosein EasternEurope without at a levelsuperior generatwiththe private Of courseit did notpass sector. exceptionalhigh rate growth incomealongwith an effective social-welfare somewhat system the above chronicimbalances at the politicallevel. 14Cf. along nance of a large gulfbetweensouthern Italyand the north. democracies providedthe masssupportforwelfare programs. 117-158.A MARXISTVIEW 253 withthe drive for exports. their implementation took place largelyunder conservative are largely involved governments. ing a conflict unnoticed thatthe economicdevelopment was taking place in a structurally uneven way. the of of per capita However. 1 Jan 2013 22:51:48 PM All use subject to JSTOR Terms and Conditions . mitigated The picturecompletely in the early 'seventies. changed The recession due to the simultaneous effect of export largely a in situation which the of social policiesproduced system servicescame under attackand began to be progressively dismantled. reduce the purchasing of power the working populationand state expenditureon these services)in order to boost the even economyin its export componentonce again without the chronic imbalances that mentioning generatedby very policy.14 economists is to freehome resources(i.

30 (July 1977): 20-22. since no solutionto the chronicimbalin ances is in sighteven forthe long run.and in the meantimethe reneweddriveforexportsis no longermitigated by an ever income.254 SOCIAL RESEARCH This has proved to be wrong. no. and level of Quite the conemployment increasing in whichdevelopThis sharpensthe uneven features trary. B." Rinascita (Rome).15 Only Yet this be devised when necessary. "Politica commerciale attiva non é sinonimo di autarchia. have to be unambiguously 15Cf. Nuti. There is therefore a and to countries healthy pressure strong many European in itssectoof investment of theallocation discusstheproblem in context can some this rial and regionaldimensions. In fact. This content downloaded on implement defeated. 1 Jan 2013 22:51:48 PM All use subject to JSTOR Terms and Conditions . M. formof wage restraints to the ones in stands of completeopposition type wage policy the latter the former followedso far. Rowthornand D. mentis takingplace.

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