From “The
General Theory” Pages 268-269 Chapter 19:
"(i) Except
in a socialised community where wage-policy is settled by decree, there is no
means of securing uniform wage reductions for every class of labour. The result
can only be brought about by a series of gradual, irregular changes,
justifiable on no criterion of social justice or economic expedience, and
probably completed only after wasteful and disastrous struggles, where
those in the weakest bargaining position will suffer relatively to the rest. A change
in the quantity of money, on the other hand, is already within the power of
most governments by open-market policy or analogous measures. Having regard to
human nature and our institutions, it can only be a foolish person who would
prefer a flexible wage policy to a flexible money policy, unless he can
point to advantages from the former which are not obtainable from the latter.
Moreover, other things being equal, a method which it is comparatively easy to
apply should be deemed preferable to a method which is probably so difficult as
to be impracticable…….
(ii)…..If
important classes are to have their remuneration fixed in terms of money in any
case, social justice and social expediency are best served if the remunerations
of all factors are somewhat inflexible in terms of money. Having regard to the
large groups of incomes which are comparatively inflexible in terms of money, it
can only be an unjust person who would prefer a flexible wage policy to a
flexible money policy, unless he can point to advantages from the former
which are not obtainable from the latter.
(iii) The
method of increasing the quantity of money in terms of wage-units by decreasing
the wage-unit increases proportionately the burden of debt; whereas the method
of producing the same result by increasing the quantity of money whilst leaving
the wage-unit unchanged has the opposite effect. Having regard to the excessive
burden of many types of debt, it can only be an inexperienced person who would
prefer the former.
Of course you didn't even address the core substance of his arguments the extreme difficulty of cutting wages the hard way vs cutting them the easy way
ReplyDelete1. I would prefer attempting to explain the truth to the populace. I’d explain that they had been the victims of prior Keynesian-style monetary manipulations which artificially bid up prices and wages and that their present prices and wages were thus unrealistic. And I would end the Keynesian-style policies forever. They would change their prices and wages or they would starve.
ReplyDelete2. The U.S. government doesn’t have the authority to even think about “cutting wages the hard way vs cutting them the easy way”. And without the prior unconstitutional, illegal and immoral monetary manipulations, there would never be large groups of people charging unrealistic and artificially high wages and prices.
3. Average people need to know who their enemy is: The Keynesians.