poverty in plenty

Image: John Lee


There is no paradox of poverty in the midst of abundance, there is capitalism, private appropriation of unpaid work and social wealth


It is a consensus among economists that The general theory of employment, interest and money is a watershed in economic theory. While the original classical theory starts from the law of markets as a general principle for explaining economic phenomena, the Keynesian theory is based on the principle of effective demand. However, Keynes's definition of “classical theory” is much broader, as it also includes neoclassical thought (Marshall and Pigou, for example).

Based on the principle of effective demand, it was possible for Keynes to formulate a new economic paradigm (in the sense of Kuhnian), in which classical normal science failed to determine the extent to which one can think and the type of scientific achievement universally recognized by the community of economists. In other words, the systematization of the principle of effective demand led to the emergence of a new set of problems and exemplary solutions, relegating the broad classical theory to a valid case (full use of factors), although of very unlikely real existence in the economic reality of a “modern industrial community”; so that “[…] the teachings of that theory would be illusory and disastrous if we tried to apply its conclusions to the facts of experience […]” (KEYNES, 1996, p 43).

At the base of this new paradigm was the theoretical and practical recognition of the relationship between insufficient effective demand and economic crises and, above all, the understanding that without public sector interventions, beyond those of a strictly monetary nature, the vicious circle of the crisis would be much harder to break and the social, economic and political costs much higher in time and space. For Keynes (1996), it was necessary to consider the implications of insufficient effective demand for issues of economic prosperity, a problem that was not part of the formulations of the “classical theory”, since according to its postulates there should always be “[...] for the optimal use of resources [...]” (KEYNES, 1996, p 66).


The problem of “classical theory”

The problem with the “classical theory”, according to Keynes, was thinking about the economy according to the desire of those economists (and ours), that is, of an economy that was always on the path to full employment and, in which the obstacles of the real world were eliminated. only removable difficulties along this trajectory (if the law of the markets is respected); except for the constant threat of the Steady State (original classical theory), in case everything was not always to the taste and at hand of the capitalist class. For Keynes, the insufficiency of effective demand was more than a simple removable difficulty, as effective demand was the great enigma that remained to be deciphered in order to understand the behavior of modern industrial communities, in terms of their cycles, crises and necessary countermeasures.

From a theoretical point of view, there seems to be a big difference between the pattern of sociability (labour/capital ratio) derived from the original classical theory and the Keynesian theory, based on neoclassical theory. In the original classical theory, by Smith and Ricardo, for example, the income of the salaried worker was associated with a natural wage, which basically consisted of guaranteeing the physical reproduction of the worker as a means of production.

However, the figure of the economic surplus was dear to the original classical thought and became dangerous in the hands of Marx (formulation of a theory of the exploitation of labor in capitalism and the overcoming of this mode of production as a solution for a new sociability free of relations of exploitation and expropriation). For Keynes, determining the worker's income is related to the assumptions of neoclassical economics; whereby wages equal the marginal product of labor. According to this theory, wage determination is related to labor productivity and not to the worker's subsistence level.

For the neoclassical theory, simply, there is no surplus, since each factor is remunerated by its marginal productivity, the totality of the product is depleted in the distributive process. Thus, theoretically, even if reality continued to contradict the theory, the remuneration of capital and labor were made equal in nature. However, the historical capitalist dynamic ends up nullifying the theoretical differences between the classical and neoclassical schools regarding the capital/labor relationship. Marx had established the foundation of this relationship even before the advent of neoclassical theory: “[…] the rise in the price of labor is confined, therefore, within limits that not only leave the foundations of the capitalist system intact, but ensure its reproduction on an ever-increasing scale. bigger […]” (MARX, 2017, p. 697).

Keynes realizes the great difference between the assumptions of “classical theory” and the real economy of his time. Not because wages continue to represent a way of remunerating the use of labor power based on unpaid work and, consequently, on the private appropriation of economic surplus. But, because the economy is not in a situation of full employment of the factors and because “the population rarely finds as much employment as it would like at the current wage”.

For him, generally speaking, the only detailed account of the “classical theory” of employment was the book Theory of Unemployment, from Pigou, with the following postulates: (1) “the wage is equal to the marginal product of work”; and (2) “the utility of wages, when a given volume of work is employed, is equal to the marginal disutility of that same volume of employment”. Roughly speaking, the first postulate establishes that the level of employment reaches its limit when the marginal product of labor is equal to wages (PMgL = w). On the other hand, the second postulate, which establishes “[…] that the real salary of an employed person is exactly sufficient (in the opinion of the employed persons themselves) to cause the volume of labor actually employed […]” (KEYNES, 1996, p. 46), becomes the target of Keynes' criticism.

Based on the two postulates mentioned above, the “classical theory” establishes the volume of resources employed in an economy. The first gives the demand curve for employment and the second the supply curve, the volume of employment being fixed by the point at which the utility of the marginal product of labor equals the disutility of marginal employment. This balance is based on the assumption that the supply of labor is solely a function of real wages. However, according to Keynes, within certain limits, the demands of salaried workers have more to do with a minimum nominal wage than with a real wage. A result that alters the labor supply curve of the “classical theory”, which will now shift with each price movement “[...] leaving the question of what the effective level of employment will be totally undetermined [...]” (KEYNES, 1996, p. 48).

Thus, the assumptions of the “classical theory”, according to the second postulate, only admit two types of unemployment. The frictional related to “[...] certain adjustment imperfections [...] such as, for example, unemployment due to a temporary disproportion of specialized resources, resulting from wrong calculations, intermittent demand, delays resulting from unforeseen changes, or, also, the fact that the transfer from one job to another does not take place without some delay [...]” (KEYNES, 1996, p. 46).

The volunteer, related to the worker's refusal to accept a remuneration equivalent to his marginal productivity, which may be "[...] as a result of legislation, social customs, an understanding for a collective bargaining agreement, or, even, the slowness in adapt to changes or, simply, as a result of human obstinacy [...]” (KEYNES, 1996, p. 47). These two types of unemployment, admitted by the second postulate, of equality between real wages and marginal disutility of employment, describe the “state of affairs” called by the “classical theory” of full employment, which also coincides with “a theory of distribution in conditions of full employment”.

Keynes then wonders whether the above two categories encompass the whole problem of employment, considering that “the population seldom finds as much employment as it would desire at the current wage. For him, the conclusion reached by the “classical theory” and by the authors who follow it, was perfectly logical and inevitable, but without any adherence to reality. For it consisted simply in the refusal of non-employed factors to accept remuneration corresponding to their marginal productivity.

“[…] If the demand for labor at the prevailing nominal wage is satisfied before all the people willing to work for it are employed, this is due to a declared or tacit agreement between the workers not to work for wages. less, and that if they all admitted a reduction in nominal wages, the greater the volume of employment served” (KEYNES, 1996, p. 48).

Keynes resorts to the reality of unemployment in the United States, in 1932, to contest the solution of the “classical theory”. For, according to him, “[…] it is not very plausible to say that unemployment in the United States in 1932 resulted from a stubborn resistance of the worker to accept a decrease in nominal wages, or from a stubborn insistence on obtaining a real wage higher than the that allowed the productivity of the economic system […]” (KEYNES, 1996, p. 49). Thus, the unemployment that characterizes a period of depression does not seem to be associated with a refusal of the workforce to accept a decrease in their nominal wages. In this way, Keynes derives a new category of unemployment not covered by the “classical theory”: involuntary unemployment”.

“There are involuntarily unemployed people when, in the case of a slight rise in the prices of wage-earners' consumer goods relative to nominal wages, both the aggregate supply of labor willing to work at the current nominal wage and the aggregate demand for it at the said wage salary are greater than the volume of existing employment” (KEYNES, 1996, p. 53).

Therefore, for Keynes, the “classical theory” was not applicable to the problems of involuntary unemployment, only to the case of full employment. If on the supply side the “classical theory” does not hold up given its inability to explain involuntary unemployment, the same occurs on the demand side. Keynes then proceeds to examine the consequences of the first postulate, but saves the analysis of the theory of wages in its relation to employment for Book V, Nominal Wages and Prices. In chapter 2, The Postulates of Classical Economics, only concludes that if the “classical theory” depends on the hypothesis of the absence of involuntary unemployment and this is not supported in reality, then, also, the hypotheses that “the real wage is equal to the marginal disutility of work” are not supported; and that “supply creates its own demand”. For these three hypotheses “[…] are equivalent to each other, in the sense that they subsist or collapse together, since any one of them logically depends on the other two” (KEYNES, 1996, p. 58).


The critique of Say's law

Keynes's criticism of Say's law is very synthetic, but at the same time devastating. It basically consists of demonstrating that its rationale and implications do not adhere to a reality in which money has taken on a much larger dimension than just the function of intermediating exchanges. A theory that has as assumptions that (1) the economy (Say's law) is based on real exchanges, (2) money is a passive element in production and exchanges, and (3) an act of individual saving inevitably leads to a act of investment, is like Keynes's analogy, thinking Euclidean in a non-Euclidean world. Therefore, for him, there is “no other solution than to reject the axiom of parallels and elaborate a non-Euclidean geometry”, in this case “an economic system in which involuntary unemployment is possible in its strictest sense”; considering “the hypothesis of equality between the demand price of global production and the supply price” the “parallel axiom”.

A new economic theory must be formulated, as all the elaborations derived from the “classical theory” must be deduced again: “[…] the social advantages of individual and national saving, the traditional attitude towards the rate of interest, the classical theory of unemployment, the quantitative theory of money, the unlimited advantages of laissez-faire regarding foreign trade and many other aspects that we will have to discuss” (KEYNES, 1996, p. 58).


The principle of effective demand

To define the principle of effective demand, Keynes starts from the role of the entrepreneur in the face of a “determined technical, resource and cost situation”. In this context, the use of a certain amount of labor imposes on the Keynesian entrepreneur two types of expenses: factor cost and user cost. The first concerns the amounts he pays to the factors of production for their customary services.

The second, “are the amounts you pay other entrepreneurs for what you buy from them, along with the sacrifice you make by using your equipment instead of leaving it idle”. The entrepreneur's income or profit, as defined by Keynes, is the difference between the value of production and the sum of cost (of factors and use). The sum of factor cost plus profit is defined by the author as total income; resulting from the employment offered by the entrepreneur - or in synthetic terms, the product resulting from a certain volume of employment, or, more categorically, aggregate demand. However, for this product to be realized depends on the level of revenue that entrepreneurs expect to receive from the corresponding production: the aggregate supply price.

That it is nothing more than the expected product, “which is exactly enough for entrepreneurs to consider it advantageous to offer the job in question”. Thus, if for a given volume of resources employed the aggregate supply price is higher, there will be an incentive for entrepreneurs to increase the use of factors beyond the point of intersection between the aggregate demand and aggregate supply functions. Point called by Keynes of effective demand.

In the author's own terms: “Let Z be the aggregate supply price of the output resulting from the employment of N men and let be the relationship between Z and N, which we will call the aggregate supply function, represented by Z = φ (N). Likewise, let D be the product that entrepreneurs expect to receive from the employment of N men, with the relationship between D and N, which we will call the aggregate demand function, represented by D = ƒ (N) […] In this way, if for a given value of N, the expected product is greater than the aggregate supply price, that is, if D is greater than Z, there will be an incentive that leads entrepreneurs to increase employment above N and, if necessary, to raise prices. costs disputing the factors of production among themselves, until reaching the value of N for which Z is equal to D. Thus, the volume of employment is determined by the point of intersection of the aggregate demand function and the aggregate supply function, as it is at this point that entrepreneurs' profit expectations will be maximized. We will call effective demand the value of D at the point of intersection of the aggregate demand function with the aggregate supply function” (KEYNES, 1996, p. 60-61).

The problem with the original classical formulation, that supply creates its own demand, and which continued to underlie orthodox economic theory, implies that the price of aggregate demand always adjusts to the price of aggregate supply; which results in an indeterminacy in the volume of employment in the economy (“except to the extent that the marginal disutility of labor sets an upper limit for it”). Well, this means that effective demand comprises an infinite series of equilibrium values ​​and not a single value.

As Keynes (1996) noted, this result is due to “a special hypothesis regarding the existing relationship between these two functions” (supply and demand), that is, that they are always the same for any volume of employment: “[… ] must mean that ƒ(N) and φ (N) are equal for all values ​​of N, that is, for any volume of production and employment; and that when there is an increase in Z (= φ(N)) corresponding to an increase in N, D (= ƒ(N)) necessarily increases by the same amount as Z. Classical theory assumes, in other words, that the price of the aggregate demand (or product) always adjusts to the price of the aggregate supply, in such a way that, whatever the value of N, the product D acquires a value equal to the price of the aggregate supply Z that corresponds to N [… ]” (KEYNES, p. 61).

Keynes found another problem with the classical formulation besides that of the special relationship between supply and demand functions. This is the “[…] situation in which aggregate employment is inelastic in the face of an increase in effective demand relative to the level of product corresponding to that level of employment […]” (KEYNES, 1996, p. 61). Even if there are incentives that lead entrepreneurs to increase employment, a point will be reached in which “a new increase in the value of effective demand is no longer accompanied by an increase in production”; that is, there are obstacles to full employment. So that Say's law is not true with regard to the relationship between supply and demand and its consequent determination of the volume of use of resources. At least in two situations not envisaged in the “classical theory”: 1) short term (fixed supply in relation to demand); and insufficient demand.

However, the main cause of non-correspondence between supply and demand as foreseen in Say's law is for Keynes a question of psychology: “[...] the psychology of the community is such that, when aggregate real income increases, aggregate consumption also increases , but not as much as income […]” (KEYNES, 1996, p. 62). This psychology of the community is named and quantified by Keynes in the concept of the community's propensity to consume, and the current investment rate will depend on it.

In turn, the latter will also depend on the “incentive to invest”, which depends on the relationship between the “complex of interest rates on loans of different terms and risks” and what the author called the marginal efficiency of capital. Given the propensity to consume and the rate of new investment, there will only be a level of employment compatible with economic equilibrium. This level cannot be higher than full employment. However, nothing guarantees that it is exactly equal to the level of full employment, since the effective demand associated with this is a special case of a particular (optimal) relationship that only happens by “accident or design”, when the propensity to consume and the incentive to invest provides “[…] a volume of demand just equal to the excess of the supply price of production resulting from full employment over what the community decides to spend on consumption when it is in a state of full employment” (KEYNES, 1996, p. 62-63).

Keynes (1996) summarized his theory of effective demand in eight propositions. First, the volume of employment N, given technical conditions, resources and costs, determines monetary and real income. Second, the propensity to consume determines the relationship between income and consumption (D1). This means that D1 depends on the amount of income and, consequently, on the volume of employment N (a relationship that is altered by a change in the propensity to consume). Third, effective demand, D, is the sum of consumption expenditures (D1) and the amount that entrepreneurs decide to invest in new investments (D2). Therefore, effective demand, D, determines the amount of labor, N, that entrepreneurs decide to employ. Fourth, consumption is a function of employment, that is, D1 is a function of N, so the consumption function can be written as Փ (N). Since the equilibrium condition is D1 + D2 = D = Փ (N), demand equals supply and, being D1 constant in the short term of the propensity to consume, the variable determining the level of employment and, consequently, the break-even point is D2, that is, Փ (N) ‒ (N) = D2. Fifth, “Consequently, the equilibrium employment level depends on (i) the aggregate supply function, φ, (ii) the propensity to consume, χ, and (iii) the amount of investment, D2. This is the essence of the General Theory of Employment” (KEYNES, 1996 p. 63). Sixth, the fifth proposition is not compatible with the hypothesis of constant nominal wages, since this implies that N cannot exceed the value that reduces the real wage until it equals the marginal disutility of labor; in other words, constant nominal wages are not compatible with all variations of D.

Propositions seven and eight represent a comparison between the classical theory and the theory proposed by Keynes. According to the seventh proposition, in classical theory, there can only be stable equilibrium at the level of full employment. Before this level there is what Keynes called a “neutral equilibrium”; whenever N is less than its maximum value. This neutral equilibrium is driven towards the stable equilibrium (maximum value of N) through the force of competition.

In the eighth proposition, Keynes argues that the passage from neutral equilibrium to full employment equilibrium is not automatic, as advocated by the classics. This is because given the conditions of the propensity to consume (no change in it), employment may not increase, so that the gap between supply and aggregate demand is not filled, that is, the economic system may find a stable equilibrium with N at a level below full employment. This is the thesis that revolutionized economic theory and that Keynes developed throughout his book.

Due to its importance, we transcribe it in full for the reader: “[…] (8) When employment increases, D1 also increases, but not as much as D, since when our income rises, our consumption also rises, albeit less. The key to our practical problem lies in this psychological law. It follows that, the higher the level of employment, the greater the difference between the aggregate supply price (Z) of the corresponding output and the sum (D1) that entrepreneurs hope to recoup with consumer spending. Consequently, when the propensity to consume does not change, employment cannot increase unless it happens at the same time as D2 grow, so that it fills the growing gap between Z and D1. Given this, the economic system can find a stable equilibrium with N at a level below full employment, that is, at the level given by the intersection of the aggregate demand function and the aggregate supply function — excluding the special hypotheses of classical theory, according to which, when employment increases, a certain force always intervenes, compelling D2 to climb as necessary to bridge the growing gap between Z and D1” (KEYNES, 1996, p. 64).

Keynes, in a very clear and logical way, is step by step demonstrating that the “insufficient effective demand” is a variable that has to be incorporated into the body of economic theory. The world of the classics, of celebrated optimism, in which “[…] everything works out for the best in the best of all possible worlds, as long as we let things go by themselves […]” (KEYNES, 1996, p. 66), no longer exists more; or actually, never existed. The economy of the XNUMXth century, due to its size, complexity and level of technique, required new perspectives on money, wages and profits. The insufficiency of effective demand is the heuristic key that allows Keynes to make the theory of prices a subsidiary subject in his general theory, as the author himself states.

The premise that there should be a natural tendency towards the optimal use of resources represented much more a desire for the path that the economy should follow than the behavior of reality. Ricardo, like no other economist, managed to impose such a premise and turn it into economic dogma for more than a century. Keynes attributes the Ricardian victory to “a complex of affinities between his doctrine and the milieu in which it was launched”, which is certainly true.

In the words of the author: “The fact that the Ricardian victory was so complete makes it coated with curiosity and mystery. This victory was probably due to a complex of affinities between his doctrine and the milieu in which it was launched. I believe that the fact that he came to conclusions entirely different from those that an ordinary and uneducated individual might have expected contributed to his intellectual prestige. The fact that his teachings, translated into practice, were austere and sometimes unpleasant gave him virtue. Its power to sustain a logical, vast and coherent superstructure gave it excellence. It gave him authority that he could explain many apparent social injustices and cruelties as inevitable incidents in the march of progress, and that he could show that the attempt to change this state of affairs was, on the whole, more likely to do harm than good. By formulating a certain justification for the freedom of action of the individual capitalist, he attracted the support of the dominant social forces grouped behind authority” (KEYNES, 1996, p. 66).


The false paradox of poverty amidst plenty

However, we have to consider the inexorable rhythm, at the same time, of expansion and transformation, which capitalism acquired during the XNUMXth century, synthesized in the unfolding of the first Industrial Revolution, in the development of a new technical standard that gave rise to a Second Industrial Revolution. Industrial, in the development of new forms of business organization (stock company) resulting from the processes of concentration and centralization of capital and, consequently, from a new pattern of capital accumulation (monopoly capitalism), from new relations between capital and labor ( labor legislation) and, the establishment of a new standard of international relations and the imperialist race that it originated, from the end of the XNUMXth century onwards.

The investment possibilities opened up at the beginning of the 1930th century, automotive and aviation, electricity and oil, for example, seem not to have been enough to give rise to the great accumulation of capital that came from the XNUMXth century. The imperialist race, the First World War, the Great Depression and the Second World War, despite all the complexity of these events, from an economic point of view represent means of reestablishing, providing or generating adequate profit rates for the process of capitalist accumulation. It is the idea “of a 'solution' to the problem of realization through an armaments industry”; an “uninterrupted armamentism” as a characteristic of twentieth-century capitalism, at least from the XNUMXs onwards, as Mandel discusses in his book late capitalism. Along with arms production comes all the military conflicts necessary to give vent to this production and the imperatives of the imperialist economy.

However, analyzing exclusively the period of the Great Depression, Keynes considers the lack of effective demand to be the only major impediment to prosperity, understood as the “optimal use of resources”, or even to the “proper” functioning of capitalism: “[...] the mere existence of insufficient effective demand can paralyze, and often does, the increase in employment before it has reached the level of full employment. The insufficiency of effective demand will inhibit the production process, despite the fact that the value of the marginal product of labor continues to exceed the marginal disutility of employment” (KEYNES, 1936, p.64).

Keynes thus hoped to have found from the insufficiency of effective demand an “explanation of the paradox of poverty in the midst of plenty”. As a good bourgeois economist, he could not understand that the poverty/abundance relationship is part of the functioning of capitalism, not a paradox. That in this mode of production the generation of wealth (abundance) occurs via the exploitation and dispossession of salaried workers and subordinate countries to the international division of labor.

As Marx seminally noted in Book I of Capital: “The law of capitalist production, which underlies the so-called “natural law of population”, simply results in this: the relationship between capital, accumulation and the wage rate is nothing more than the relation between the unpaid labor turned into capital and the additional labor required to set the additional capital in motion. It is not, therefore, at all a question of a relationship between two mutually independent magnitudes – on the one hand, the size of capital and, on the other, the size of the working population – but rather, ultimately, the relationship between the unpaid and paid jobs of the same working population. If the amount of unpaid labor supplied by the working class and accumulated by the capitalist class grows rapidly enough to permit its transformation into capital with only an extraordinary increase in paid labour, wages rise and, other things being equal, unpaid work decreases proportionately. But as soon as this reduction reaches the point where the surplus labour, which feeds capital, is no longer offered in the normal quantity, a reaction takes place: a smaller part of income is capitalized, accumulation slows down and the upward movement of wages receives a blowback. The rise in the price of labor is confined, therefore, within limits which not only leave the foundations of the capitalist system intact, but ensure its reproduction on an ever-increasing scale. In reality, therefore, the law of capitalist accumulation, mystified into a law of nature, expresses only that the nature of this accumulation excludes any decrease in the degree of exploitation of labor or any rise in the price of labor which might seriously threaten the constant reproduction of labor. capitalist relationship, its reproduction on an ever-expanding scale” (MARX, 2017, p. 697).

In turn, the capital/labor ratio is reflected in relations between countries. The international division of labor is moved through a “capitalist imperialism”, even if in our eyes such relations appear to be based on free trade. And the power of polarization, exploitation and devastation of the “new imperialism”, as Harvey (2004) and Wood (2014) call it, for example, allows the carrying out of all kinds of atrocities in the name of the “endless accumulation of capital”, because currently “[…] the economic power of capital is capable of going far beyond the control of any existing or conceivable political or military power […]” (WOOD, 2014, p. 18). In this respect, chapter 1, “All because of oil”, from Harvey's “New imperialism”, and chapter 7, from Wood's “Capital empire”, “'Surplus imperialism', war without end".

The fundamental economic problem for Keynes was how to guarantee profitability to private investments, given a situation in which the propensity to consume and the amount of new investments resulted in an insufficient effective demand. Thus, for the author, the problems of effective demand and the profitability of investments appeared as chronic problems of capitalism, even for richer communities. For, “the richer the community, the more the gap between its actual and potential production will tend to widen”, and the greater the accumulated capital, the less attractive the opportunities for new investments will be.

But despite being chronic these problems could be treated and corrected. It is not that capitalism has failed. They were restricted failures (effective demand and investment) and technical failures (a dynamo problem): “[…] for this reason, the analysis of the propensity to consume, the definition of the marginal efficiency of capital, and the theory of the rate of interest are the three main gaps in our current knowledge that we need to fill […]” (KEYNES, 1996, p. 65).

So, for Keynes, it all boiled down to a dynamo problem to match effective demand and investment opportunities. It was necessary to replace the old dynamo of market self-regulation (Say's law) with a new one, that of effective demand, which would be driven by the adoption of government public policies (and in a situation of very low interest rates, mainly, via a expansionary budget policy).

Keynes' solution was accepted and met the imperatives of capital until a new reconfiguration of capitalism from the mid-1970s onwards. What makes General Theory a truly unique case, however, is that it combines an imposing intellectual feat with immediate practical relevance in the face of a world economic crisis”. However, perhaps Keynes' biggest mistake was thinking that capital could be contained and tamed for social purposes (the opposite of its essence: production for production's sake, accumulation for accumulation's sake).

the euthanasia of reindeer, that is, “the cumulative power of oppression of the capitalist in exploiting the scarcity value of capital”, was not confirmed. On the contrary, the new technological pattern of capitalism at the end of the 1930th century transformed rentism, through global financialization, into the new dynamo of the capitalist economy. It also brought, as in the 2008s, a crisis of global proportions (XNUMX), but now without the appeasing figure of Keynes; just the plain old perversity of capitalism and “the cumulative power of oppression of the capitalist”.



Keynes, despite the initial resistance encountered in academia and politics, managed to impose his ideas and save capitalism: If “Ricardo conquered England as completely as the Holy Inquisition conquered Spain”, as Keynes himself had stated; he conquered the world as completely as The Beatles had done. However, saving capitalism not only did not solve the problem of poverty, but gave capitalism time to rebuild itself, create new forms of surplus value extraction (dematerialization of value) and a new pattern of capital accumulation (digital-financial ), which denies Keynesianism itself and even the democratic system.

So, this is the real Keynesian paradox: of the development of capitalism as the destruction of the being and the planet. There is no paradox of poverty in the midst of abundance, there is capitalism, appropriation of unpaid work and social wealth privately, intra and inter countries. Capitalism is the very paradox, the very human contradiction that always finds ways to move, but is never resolved, since our form of sociability never surpassed our primitive struggle for existence: because human work, our most precious asset, which could give rise to another form of socialization that is more solidary and cooperative, has still been a motive for greed and all sorts of possible and imaginable forms of exploitation and expropriation, between social subjects and between nations.

A general theory, undoubtedly, was a revolution in economic theory, but to maintain the status quo of an economic system that concentrates income/wealth and is based on the exploitation of human labor. We need a revolution in economic theory that moves towards perceiving work, production and money from their social functions. An economic theory in this perspective can only be a communist economic theory.

*José Micaelson Lacerda Morais is a professor in the Department of Economics at URCA. Author, among other books, of Capitalism and the revolution of value: apogee and annihilation.



WOOD, Ellen Meiksins. The empire of capital. Sao Paulo: Boitempo, 2014.

KEYNES, John Maynard. The General Theory of Employment, Interest and Money. São Paulo: Editora Nova Cultural Ltda, 1996. (The Economists)

KRUGMAN, Paul. Introduction. In: KEYNES, John Maynard. The General Theory of Employment, Interest and Money. São Paulo: SARAIVA, 2017.

MANDEL, Ernest. late capitalism. São Paulo: Abril Cultural, 1982.

MARX, Carl. Capital: critique of political economy. Book I: the capital production process. 2nd ed. São Paulo: Boitempo, 2017.


See this link for all articles


  • João Cândido and the Revolt of the Whipwhip revolt 23/06/2024 By PETRÔNIO DOMINGUES: In the current context, in which there is so much discussion about State reparations for the black population, the name of João Cândido cannot be forgotten
  • Fear and HopeJoao_Carlos_Salles 24/06/2024 By JOÃO CARLOS SALLES: Against the destruction of the public university
  • The collapse of Zionismfree palestine 80 23/06/2024 By ILAN PAPPÉ: Whether people welcome the idea or fear it, Israel's collapse has become predictable. This possibility should inform the long-term conversation about the future of the region
  • Franz Kafka, libertarian spiritFranz Kafka, libertarian spirit 13/06/2024 By MICHAEL LÖWY: Notes on the occasion of the centenary of the death of the Czech writer
  • A look at the 2024 federal strikelula haddad 20/06/2024 By IAEL DE SOUZA: A few months into government, Lula's electoral fraud was proven, accompanied by his “faithful henchman”, the Minister of Finance, Fernando Haddad
  • Return to the path of hopelate afternoon 21/06/2024 By JUAREZ GUIMARÃES & MARILANE TEIXEIRA: Five initiatives that can allow the Brazilian left and center-left to resume dialogue with the majority hope of Brazilians
  • About artificial ignoranceEugenio Bucci 15/06/2024 By EUGÊNIO BUCCI: Today, ignorance is not an uninhabited house, devoid of ideas, but a building full of disjointed nonsense, a goo of heavy density that occupies every space
  • The society of dead historyclassroom similar to the one in usp history 16/06/2024 By ANTONIO SIMPLICIO DE ALMEIDA NETO: The subject of history was inserted into a generic area called Applied Human and Social Sciences and, finally, disappeared into the curricular drain
  • Theological manual of neoliberal neo-PentecostalismJesus saves 22/06/2024 By LEONARDO SACRAMENTO: Theology has become coaching or encouraging disputes between workers in the world of work
  • Chico Buarque, 80 years oldchico 19/06/2024 By ROGÉRIO RUFINO DE OLIVEIRA: The class struggle, universal, is particularized in the refinement of constructive intention, in the tone of proletarian proparoxytones