,*APT] #ab 
,KEYNESIANISM 9 ,REV]SE 

,PEOPLE 3 

,AU?OR 3 ,PAUL ,MATTICK 

,TEXT 3 

,KEYNESIAN 9T]V5TIONS 9 ! ECONOMY W]E AT FIR/ RA!R 9EFFECTIVE4 
,KEYNES EXPLA9$ ?IS BY SAY+ ?AT 0! M$IC9E HE RECOMM5D$ WAS TOO 
NIGG>DLY APPLI$40 ,! UNEMPLOYM5T PROBLEM REMA9$ UNSOLV$ UNTIL ! 
APPROA*+ ,SECOND ,WORLD ,W> =C$ ! V>I\S GOV]NM5TS TO DO = ! 
PURPOSE ( WAG+ W> :AT !Y HAD BE5 UNWILL+ OR UNABLE TO DO DUR+ ! 
PREC$+ DEPRESSION4 ,) ! BEG9N+ ( W> PRODUCTION1 H[ EV]1 ,KEYNES 
WAS F9ALLY CONV9C$ ?AT HIS !ORY W\LD F9D CONFIRMATION1 = N[ IT W\LD 
BE SE5 0:AT LEVEL ( CONSUMPTION IS NE$$ TO BR+ A FREE1 MOD]N 
COMMUNITY 444 )9 ! SI<T ( ! OPTIMUM EMPLOYM5T ( ITS 
RES\RCES40.<#a.> 

,W>-POLICIES1 H[EV]1 W]E QUITE 9DEP5D5T ( ! DEVELOP+ ,KEYNESIAN 
IDEOLOGY4 ,!Y DID NOT DIFF] FROM ?OSE EMPLOY$ 9 ! ,FIR/ ,WORLD ,W>2 NOR 
DID !Y DIFF] BETWE5 V>I\S NATIONS1 NOT ALL ( :I* ADH]$ TO ! 
0,KEYNESIAN REVOLUTION40 ,ALREADY 09 ! FIR/ WORLD W> IT 
PROV$ POSSIBLE TO DEVOTE ALMO/ HALF ( ! TOTAL RES\RCES ( ! COMMUNITY 
TO FI<T+20 & ! 0MOLD+ ( 9DU/RY 9TO ! %APE = W> 
NE$S10 WAS 0HELP$ =W>D BY DIRECT GOV]NM5T CO]CION ( 
9DU/RY40.<#b.> ,ALL 
! 9NOVATIONS ASSOCIAT$ ) ! COMM&E]$ ECONOMY ( ! ,SECOND ,WORLD 
,W>1 SU* AS =C$ SAV+S1 CONTROLS ON MONEY1 CR$IT1 PRICES & LABOR1 
PRIORITIES1 RATION+1 GOV]NM5T-BORR[+S1 & SO =?1 HAD BE5 EMPLOY$ 
9 ! FIR/ CONFLICT DESPITE ! 0OR?ODOX0 APPROA* TO ECONOMICS 
:I* PREVAIL$ AT ?AT TIME4 

,:ILE RA!R UNSUCCESSFUL 9 9CREAS+ ! 0PROP5SITY TO 
CONSUME0 DUR+ ! LONG DEPRESSION1 ,KEYNESIAN !ORY WAS CELEBRAT$ AS A 
0BRILLIANT SUCCESS0 9 CUTT+ IT D[N DUR+ ! W> BY WAY ( 
COMPULSORY SAV+S4 ,?\< NOT ABLE TO 9CREASE 9VE/M5TS T[>D FULL 
EMPLOYM5T1 IT L$ TO LABOR-%ORTAGES BY ! DE/RUCTION ( CAPITAL4 ,TO PUT A 
!ORY 9 REV]SE CAN ONLY MEAN TO PUT IT \T ( COMMISSION2 YET1 /RANGELY 
5\<1 ! SACRIFICE ( ! !ORY WAS SE5 AS A SIGN ( ! 
0FLEXIBILITY & ! FRUITFULNESS = PRACTICAL ACTIONS ( ! K9D ( 
?9K+ ?AT W5T 9TO ! G5]AL !ORY ( EMPLOYM5T1 9T]E/ & MONEY4 
,!RE IS NO?+ 9 ,KEYNES' PLAN = PREV5T+ 9FLATION 9 W>10 
IT HAS BE5 SAID1 0?AT CONTRADICTS HIS EXPLANATION ( UNEMPLOYM5T 9 
PEACE4 ,! PLAN = W> F9ANCE SUGGE/S ! NE$ = COMPULSORY SAV+S1 
:]EAS ! EMPHASIS 9 ! ,G5]AL ,!ORY IS UPON ! SOCIAL 
DISADVANTAGES ( ?RIFT4 ,! REV]SAL ( CIRCUM/ANCES FROM PEACE TO W> CALLS 
= A REV]SAL ( EMPHASIS40.<#c.> 

,BUT ?IS CAN H>DLY BE CONSID]$ A 0REV]SAL ( EMPHASIS40 
,AFT] ALL1 ,KEYNESIAN !ORY WAS BAS$ ON ! CONCEPT ( A 0MATURE0 
CAPITALISM UNABLE ON ITS [N ACC\NT TO BR+ =? 9VE/M5TS L>GE 5\< TO 
ASSURE FULL EMPLOYM5T4 ,! PURPOSE & MEAN+ ( ,KEYNES' !ORY WAS3 TO 
PROVIDE A WAY TO HAVE FULL EMPLOYM5T 9 ! ABS5CE ( W> OR 
PROSP]ITY2 & TO OV]COME DEPRESSION NOT 9 ! OR?ODOX FA%IONS ( WAG+ 
W> OR PASSIVELY AWAIT+ ! DE/RUCTIVE RESULTS ( ! CRISIS1 BUT ?R\< 
! NEW & 0RATIONAL0 ME?OD ( GOV]NM5T-9DUC$ DEM&4 ,IT IS 
MORE ACCURATE TO SAY ?AT ,KEYNES SUSP5D$ HIS !ORY 0= ! 
DURATION40 ,9 FACT1 HIS CELEBRAT$ 0PLAN0 = F9ANC+ ! 
W> WAS M]ELY A SUGGE/ION TO DO DICTATORIALLY :AT WAS DONE AT FIR/ BY 
P]SUASION4 

,BECAUSE ( ! 0/ICK9ESS0 ( WAGES1 ,KEYNES AT ONE TIME OPPOS$ 
DEFLATION>Y POLICIES2 HE N[ OPPOS$ PRICE 9FLATION = ! SAME REASON4 ,9 
BO? CASES HE WAS NOT 9T5T ON *ANG+ AN EXI/+ PRACTICE1 BUT WANT$ ONLY 
TO MAKE IT MORE EFFECTIVE BY MAK+ IT MORE PALATABLE4 ,JU/ AS HE ONCE ?\<T 
?AT A DECREASE 9 REAL WAGES W\LD BE MORE ACCEPTABLE :5 C>RI$ \T UND] 
/ATION>Y OR 9CREAS+ MONEY-WAGES1 SO HE N[ ?\<T ?AT 0IT MAKES 
ALL ! DIFF]5CE 9 ! WORLD TO EA* 9DIVIDUAL P]SONALLY :E!R ! 
EXCESS ( HIS 9COME OV] HIS CONSUMPTION IS TAK5 FROM HIM BY TAX OR LOAN4 ,TO 
HIM P]SONALLY GOV]NM5T /OCK IS AN ADDITION TO HIS WEAL?1 TO HIS SECURITY1 
& TO HIS COM=T 9 FAC+ ! FUTURE4 ,IT GIVES HIM A CLAIM OV] ! FUTURE 
RES\RCES ( ! COMMUNITY4 ,SOMEONE WILL HAVE TO MEET HIS CLAIM4 ,BUT ?IS 
SOMEONE IS NOT NECESS>ILY HIMSELF1 &1 EV5 IF IT W]E1 IT MAY SUIT HIM 
BETT] & 9VOLVE LESS SACRIFICE TO P>T 9 9/ALLM5TS ) HIS P]SONAL 
RES\RCES & TO POSSESS MEAN:ILE A TITLE TO WEAL? :I* HE CAN REALIZE 9 
CASE ( NE$0.<#d.> 

,IT IS CLE> ?AT 0WEAL?0 US$ UP DUR+ ! W> CANNOT BE DRAWN 
UPON 9 ! FUTURE4 ,A 0CLAIM OV] FUTURE RES\RCES0 M]ELY MEANS 
ADDITIONAL FUTURE WORK3 5\< WORK MU/ BE DONE 9 ! FUTURE TO PRODUCE ! 
COMMODITY-EQUIVAL5T = ! !N-EXI/+ WAGE-RATES PLUS ! 
COMMODITY-EQUIVAL5T ( W>-SAV+S4 ,IT IS TRUE1 ( C\RSE1 ?AT PEOPLE ONLY 
CA% !IR W>-BONDS GRADUALLY1 :I* SPREADS ! SURPLUS-LABOR NECESS>Y TO 
R$EEM !M OV] A LONG] TIME4 ,BUT ?IS DOES NOT ALT] ! FACT ?AT ANY 
9CREAS$ CONSUMPTION /EMM+ FROM ! PUR*ASE ( W>-BONDS CAN COME ONLY \T 
( NEW PRODUCTION4 ,! 9DIVIDUAL'S CLAIM OV] FUTURE RES\RCES IS AN 
ILLUSION HE MA9TA9S BY NOT LOOK+ AT SOCIETY AS A :OLE4 ,IF 0SOMEONE 
ELSE WILL HAVE TO MEET HIS CLAIM0 AT SOME TIME1 !N1 ( C\RSE1 AT SOME 
O!R TIME1 HE WILL HAVE TO MEET SOMEBODY ELSE'S CLAIM4 ,KEYNES WAS AT ONE 
TIME CONV9C$ ?AT ! 9DIVIDUAL MU/ BE TAU<T TO SEE ! PROBLEM ( SOCIETY 
AS A :OLE4 ,BUT = ! SAKE ( VICTORY HE SUSP5D$ ?AT CONVICTION1 & N[ 
HOP$ ?AT ! WORK]S1 AT LEA/1 W\LD RETA9 ALL ?OSE ILLUSIONS :I* HELP$ 
RECONCILE !M TO ! 9CREAS$ EXPLOITATION NECESSITAT$ BY W>4 

,KEYNES ?\<T ( ! FUTURE 9 /ILL ANO!R RESPECT :ILE MAK+ HIS 
PROPOSALS = F9ANC+ ! W>4 ,HE FE>$ ?AT ! PO/ W> SITUATION W\LD 
LOOK MU* LIKE ! PRE-W>1 ) A LACK ( 0EFFECTIVE DEM&0 & 
ITS CONSEQU5T UNEMPLOYM5T4 ,9 DI/9CTION TO ! PRE-W> SITUATION1 H[EV]1 
!RE W\LD BE A BACKLOG ( PO/PON$ EFFECTIVE DEM&1 :I* C\LD S]VE TO 
BOL/] 9DU/RIAL ACTIVITY BY 9CREAS+ ! 0PROP5SITY TO 
CONSUME40 ,?\< SUSP5D$ DUR+ ! W>1 HIS !ORY W\LD HOLD GOOD AS 
SOON AS 0NORMALCY0 HAD BE5 RE/OR$4 

,! W> ITSELF ONLY PROV$ TO ,KEYNES ?AT ANY ECONOMIC SY/EM C\LD HAVE 
FULL EMPLOYM5T IF IT SO WI%$2 IT DID NOT OCCUR TO HIM ?AT UND] PRES5T 
CONDITIONS W> & PREP>ATION = W> MAY BE ! ONLY WAY TO FULL EMPLOYM5T4 
,IT OCCURR$ TO O!RS1 H[EV]1 & SOME ( HIS DISCIPLES VIEW$ W> 0AS 
A GREAT NEW 9DU/RY :OSE COLOSSAL DEM&S /IMULATE ECONOMIC ACTIVITY 9 
EV]Y NOOK & CRANNY ( ! ECONOMIC SY/EM10 EV5 ?\< 0! 
EXPECT$ YIELDS :I* RAISE ! M>G9AL EFFICI5CY ( GOV]NM5T 9VE/M5TS 
>E MA9LY 9 T]MS ( SOCIAL & MILIT>Y ADVANTAGES RA!R ?AN PECUNI>Y 
PR(ITS40.<#e.> 
,G5]ALLY1 H[EV]1 ! ,KEYNESIAN 0SPIRIT0 WAS BETT] REPRES5T$ 
BY ?OSE :O EMPHASIZ$ ! 0SOCIALI/IC0 ASPECTS ( GOV]NM5T 
CONTROL4 ,NE> ! 5D ( ! ,SECOND ,WORLD ,W>1 = 9/ANCE1 ,WILLIAM ,BEV]IDGE 
PROPOS$ A PROGRAM ( FULL EMPLOYM5T BAS$ ON ! 0SOCIALIZATION ( 
DEM& )\T ! SOCIALIZATION ( PRODUCTION40.<#f.> ,BUILT ON ,KEYNESIAN PR9CIPLES & 
*OOS+ FISCAL MEANS = ITS REALIZATION1 SU* A PROGRAM WAS TO C>RY ! FULL 
EMPLOYM5T POLICY ( W> 9TO ! CONDITIONS ( PEACE4 

,! FE> ?AT !RE MI<T BE A RETURN ( P]SI/5T WIDESPREAD UNEMPLOYM5T 
9 ! WAKE ( ! W> PROV$ TO BE EXAGG]AT$4 ,9 ! DEFEAT$ NATIONS IT 
ONCE MORE BECAME A PROBLEM = A TIME1 BUT IF A DI/9CTION IS MADE BETWE5 
ECONOMICS & POLITICS1 ?IS WAS NOT A 0/RICTLY ECONOMIC0 PROBLEM4 
,UNEMPLOYM5T H]E WAS CLE>LY CAUS$ BY ! DEVA/ATION & DISLOCATIONS ( W> 
& WAS MA9TA9$ = SOME TIME BY OCCUPATION POLICIES ?AT RE/RICT$ 
ECONOMIC ACTIVITIES4 ,= ! VICTORI\S P[]S1 H[EV]1 L>GE-SCALE 
UNEMPLOYM5T DID NOT RECUR 9 ! IMM$IATE PO/W> ]A BECAUSE ( ! NE$ TO 
CONSOLIDATE NATIONAL GA9S1 TO R5EW US$-UP MEANS ( PRODUCTION1 TO TRY TO 
REGA9 LO/ M>KETS1 & TO PREP>E = ! EV5TUALITY ( A ,?IRD ,WORLD ,W>4 
,!SE ECONOMIES REMA9$ 9 P>T W>-ECONOMIES & ?US RETA9$ A HI< LEVEL 
( EMPLOYM5T4 ,AS ! DI/9CTION BETWE5 W>-TIME PRODUCTION & PEACE-TIME 
PRODUCTION CEAS$ TO EXI/1 !RE WAS NO NE$ TO ADAPT ! ,BEV]IDGE OR ANY 
O!R PLAN = ! FULL UTILIZATION ( NATIONAL RES\RCES4 

,:]EAS A DECADE ( DEPRESSION & GOV]NM5T 9T]V5TION HAD FAIL$ TO 
CREATE ! CONDITIONS ( A PROSP]\S CAPITAL ACCUMULATION1 ! ACTUAL CAPITAL 
EXPANSION AFT] ! W> KEPT ! 0GOV]NM5T 9 BUS9ESS40 ,FULL USE 
( PRODUCTIVE RES\RCES1 :]E & :5 IT CAME AB\T1 WAS ACCOMPLI%$ BY 
EXT5D+ GOV]NM5T-9DUC$ 0NON-PR(ITABLE0 PRODUCTION4 ,P>T ( 
?IS 9CREASE RESULT$ FROM PUBLIC WELF>E & =EIGN-AID MEASURES2 MO/ ( IT 
WAS G5]AT$ BY MILIT>Y EXP5DITURES4 ,AT V>I\S TIMES ATTEMPTS W]E MADE TO 
OP]ATE ) BALANC$ BUDGETS & TO GA9 SURPLUSES = DEBT RETIREM5TS4 ,BUT 
5SU+ BUS9ESS RECESSIONS REV]S$ !SE POLICIES QUICKLY4 ,IT WAS BY WAY ( 
9FLATION1 DEBT-ACCUMULATION1 GOV]NM5T-9DUC$ PRODUCTION1 W> PREP>ATION 
& ACTUAL W>F>E ?AT ! DOM9ANT CAPITALI/ NATIONS REA*$ AN 
APPROXIMATION ( FULL EMPLOYM5T4 ,?IS EXP]I5CE /R5G!N$ ,KEYNESIANISM & 
L$ TO ! WIDE-SPREAD BELIEF ?AT A GOV]NM5T-MA9TA9$ 
0QUASI-BOOM0 C\LD BE 9DEF9ITELY CONT9U$4 

,KEYNES' UNTIMELY DEA? 9 #aidf DEPRIV$ HIM ( ! OPPORTUNITY TO 
WITNESS ! 0VALIDATION0 ( HIS !ORIES 9 GOV]NM5T-MANIPULAT$ 
PO/W> ECONOMIES4 ,?AT ?IS HAD BE5 A*IEV$ L>GELY BY WAY ( W> & 
PREP>ATION = W> WAS TO BE REGRETT$2 YET 0LOGICALLY0 IT %\LD 
HAVE BE5 POSSIBLE JU/ AS WELL UND] CONDITIONS ( PEACE4 ,9DE$1 IT HAD BE5 
,KEYNES' 9T]E/ 9 9T]NATIONAL PEACE & G5]AL SOCIAL WELF>E :I* 
HAD L$ HIM TO ADVOCATE A GOV]NM5T-REGULAT$ 9VE/M5T POLICY 9 ! FIR/ 
PLACE4 ,SU* A POLICY1 ,KEYNES FELT1 W\LD REMOVE ! PRESS+ ECONOMIC MOTIVES 
= W>1 S9CE NO C\NTRY W\LD NE$ 0TO =CE ITS W>ES ANY LONG] ON 
ANO!R1 OR TO REPULSE ! (F]+ ( ITS NEI<BORS4 ,9T]NATIONAL TRADE C\LD 
CEASE TO BE :AT IT IS1 NAMELY1 A DESP]ATE EXP$I5T TO MA9TA9 EMPLOYM5T AT 
HOME BY =C+ SALES ON =EIGN M>KETS & RE/RICT+ PUR*ASES1 :I*1 IF 
SUCCESSFUL1 WILL M]ELY %IFT ! PROBLEM ( UNEMPLOYM5T TO ! NEI<BOR :I* 
IS WOR/$ 9 ! /RUGGLE40 ,9/EAD IT W\LD BECOME A 0WILL+ & 
UNIMP$$ EX*ANGE ( GOODS & S]VICES 9 CONDITION ( MUTUAL 
ADVANTAGE40.<#h.> 

,:ILE /ILL ADH]+ TO NEO-CLASSICAL DOCTR9E1 ,KEYNES HAD BE5 UNDOGMATIC 
5\< TO ADVOCATE PROTECTIONISM :5EV] ,BRITI% 9T]E/S MADE ?IS 
ADVISABLE4 ,DUR+ ! ,GREAT ,DEPRESSION HE W5T BEYOND ?IS TO R$ISCOV] AN 
0ELEM5T ( SCI5TIFIC TRU? 9 M]CANTILI/ DOCTR9E10.<#i.> 9 ! 
M]CANTILI/'S DISREG>D = ! WORLD AT L>GE4 ,AT ?AT TIME1 IT WAS ! 
GOLD /&>D :I*1 9 ,KEYNES' VIEW1 WAS L>GELY RESPONSIBLE = ! 
PREVAL5CE ( UNEMPLOYM5T2 = UND] ITS RULE1 !RE WAS NO 0OR?ODOX 
MEANS OP5 TO ! AU?ORITIES = C\NT]+ UNEMPLOYM5T AT HOME EXCEPT BY 
/RUGGL+ = AN EXPORT SURPLUS & AN IMPORT ( ! MONET>Y METAL AT ! 
EXP5SE ( !IR NEI<BORS40.<#a.> 

,KEYNES FAVOR$ ECONOMIC POLICIES 0UNIMP$$ BY 9T]NATIONAL 
PREOCCUPATIONS0 & DIRECT$ TO ATTA9+ AN OPTIMUM LEVEL ( DOME/IC 
EMPLOYM5T4 ,9 HIS VIEW1 IT WAS ! 0SIMULTANE\S PURSUIT ( !SE 
POLICIES BY ALL C\NTRIES TOGE!R :I* IS CAPABLE ( RE/OR+ ECONOMIC 
HEAL? & /R5G? 9T]NATIONALLY1 :E!R WE MEASURE IT BY ! LEVEL ( 
DOME/IC EMPLOYM5T OR BY ! VOLUME ( 9T]NATIONAL TRADE40.<#a#a.> ,RECOGNIZ+ ! 
LIMITATIONS & DANG]S ( SU* A POLICY1 ,KEYNES TRI$ TO OV]COME !M BY 
TAK+ P>T ( ! NATIONAL ECONOMY \T ( ! PROCESS ( 9T]NATIONAL 
COMPETITION4 ,IF ALL C\NTRIES W\LD DO LIKEWISE1 !RE C\LD BE FULL EMPLOYM5T 
EV]Y:]E4 

,) OR )\T ! GOLD /&>D1 A FULL-EMPLOYM5T POLICY IMPLIES 
DIFF]5T ?+S = DIFF]5T NATIONS & = ! DIFF]5T CLASSES )9 
!SE NATIONS4 ,ITS SUCCESS OR FAILURE DEP5DS ON ! NATION'S RELATIVE 
/R5G? 9 T]MS ( NATURAL RES\RCES1 ON ITS POSITION )9 ! GIV5 
09T]NATIONAL DIVISION ( LABOR10 & ON ! DEGREE TO :I* IT IS 
DEP5D5T ON A C]TA9 LEVEL ( 9T]NATIONAL TRADE4 ,= SOME NATIONS FULL 
EMPLOYM5T IS A LESS] CONSID]ATION ?AN ! EXT5T & T]MS ( 9T]NATIONAL 
TRADE4 ,!Y CANNOT EXI/1 LET ALONE A*IEVE FULL EMPLOYM5T1 SAVE BY AN 
EXTRAORD9>Y 0PREOCCUPATION0 ) ! 9T]NATIONAL ECONOMY4 
,H[EV]1 ,KEYNES REGRETT$ 09T]NATIONAL PREOCCUPATIONS0 ONLY 
9S(> AS !Y W]E BAS$ ON ! GOLD /&>D1 :I* DID NOT HAVE ! 
0EQUILIBRAT+0 P[] IT WAS SUPPOS$ TO POSSESS4 ,HE WANT$ TO 
REPLACE IT ) AGREEM5TS REA*$ BY CONSCI\S CONSID]ATIONS ( 9T]NATIONAL 
ECONOMIC NE$S4 ,JU/ AS ,KEYNES ?\<T IT POSSIBLE TO DEVISE /ATE 
9T]V5TIONS 9 ! NATIONAL ECONOMY :I* DID NOT COME 9 CONFLICT ) 
PRIVATE 5T]PRISE1 SO HE ?\<T ?AT 9T]NATIONAL BODIES C\LD REGULATE ! 
WORLD ECONOMY )\T VIOLAT+ ! SPECIAL 9T]E/S ( ANY P>TICUL> 
C\NTRY4 ,ADDITIONAL DATA & 9/RUM5TALITIES ( CONTROL W\LD BE REQUIR$1 ( 
C\RSE2 BUT ,KEYNES SAW NO 9SURM\NTABLE DIFFICULTIES 9 APPLY+ HIS 
SUGGE/IONS = ! DOME/IC ECONOMY TO ! WORLD4 

,9 ! MID/ ( ! ,SECOND ,WORLD ,W>1 & 9 ANTICIPATION ( ! COM+ 
PEACE1 ,KEYNES PROPOS$ ! E/ABLI%M5T ( AN 9T]NATIONAL CURR5CY & 
CR$IT SY/EM DESIGN$ TO REMOVE ! REASON = W> BY ALLEVIAT+ 
9T]NATIONAL DEPRESSIONS & GU>ANTEE+ ! NECESS>Y 9T]NATIONAL TRADE4 
,AN ,9T]NATIONAL ,CLE>+ ,UNION & A NEW 9T]NATIONAL =M ( MONEY CALL$ 
0BANCOR0 W]E TO S]VE AS 9/RUM5TS = ! REVIVAL ( A 
MULTILAT]AL TRADE & PAYM5TS SY/EM :I* W\LD /RESS ! POSITIVE & 
AVOID ! NEGATIVE ASPECTS ( ! DEFUNCT GOLD /&>D4 ,9 AN EMASCULAT$ =M 
IT BECAME1 9 ,BRETTON ,WOODS1 ! ,9T]NATIONAL ,BANK = ,RECON/RUCTION & 
,DEVELOPM5T & ! ,9T]NATIONAL ,MONET>Y ,FUND4 

,AL?\< ! DESIRABILITY ( & ! NECESSITY = 9T]NATIONAL ECONOMIC 
COOP]ATION HAVE BE5 G5]ALLY RECOGNIZ$1 LITTLE HAS ACTUALLY BE5 DONE 9 
?IS RESPECT4 ,AFT] ,WORLD ,W> ,I,I1 ,KEYNES HIMSELF BEGAN TO REALIZE ! 5ORM\S 
DIFFICULTIES 9 ! WAY ( MAK+ ! CAPITALI/ SY/EM WORK MORE EFFICI5TLY4 
0,NO ONE CAN BE C]TA9 ( ANY?+ 9 ?IS AGE ( FLUX & *ANGE10 
HE WROTE N[2 0DECAY+ /&>DS ( LIFE AT A TIME :5 \R COMM& OV] 
! PRODUCTION ( MAT]IAL SATISFACTION IS ! GREATE/ EV]1 & A DIM9I%+ 
SCOPE = 9DIVIDUAL DECISIONS AT A TIME :5 MORE ?AN BE=E WE %\LD BE 
ABLE TO AF=D !SE SATISFACTIONS1 >E SUFFICI5T TO 9DICATE AN UND]LY+ 
CONTRADICTION 9 EV]Y DEP>TM5T ( \R ECONOMY4 ,NO PLAN WILL WORK = C]TA9 
9 SU* AN EPO*40.<#a#b.> ,HE HA/5$ TO ADD ?AT 0IF ALL PLANS %\LD 
FAIL1 WE & EV]YONE ELSE WILL TRY SOME?+ DIFF]5T40 ,WE %\LD 
0ACT ON ! OPTIMI/IC HYPO!SIS UNTIL IT HAS BE5 PROV$ WRONG40 
,! OPTIMISM ,KEYNES SUGGE/S WAS TO N\RI% ITSELF ON NO MORE ?AN ! 
0P]MAN5T TRU? ( CLASSICAL !ORY10 ON ! 0UND]CURR5T 
( A LAW ( VALUE10 :I*1 LIKE A 0NATURAL =CE0 OR ,ADAM 
,SMI?'S 09VISIBLE H&10 WILL RE/ORE ! DI/URB$ ECONOMIC 
ORD]4 ,BUT ,KEYNES /ILL HELD ?AT !RE WAS NO NE$ TO WAIT PASSIVELY = ! 
0NATURAL =CES0 TO TAKE !IR C\RSE4 ,! PROCESS C\LD BE EAS$ 
& HA/5$ ALONG BY RATIONAL IMPLEM5TATIONS 9 SUPPORT ( ! 
NATURALLY-GIV5 EQUILIBRIUM T5D5CIES4 

,9 VIEW ( ! W>'S VA/ DEVA/ATION ( BO? ,EUROPE & ,ASIA1 ! 
REVIVAL ( ! DI/URB$ WORLD ECONOMY BECAME1 9 ! ,KEYNESIAN VIEW1 
,AM]ICA'S RESPONSIBILITY4 ,! ,AM]ICANS W\LD HAVE 0TO DISCOV] 
WAYS ( LIFE1 :I*1 COMP>$ ) ! WAYS ( LIFE ( ! LESS =TUNATE 
REGIONS ( ! WORLD1 MU/ T5D T[>D & NOT AWAY FROM1 EXT]NAL 
EQUILIBRIUM40.<#a#c.> ,:AT ?IS W\LD IMPLY 9 PRACTICAL T]MS ,KEYNES 
WAS SP>$ ! NECESSITY ( RELAT+4 ,HIS DISCIPLES1 H[EV]1 APPROA*$ ! 
PROBLEM EI!R 9 /RICTLY BUS9ESS T]MS OR AS A QUE/ION ( PHILAN?ROPY4 
,BECAUSE PRIVATE =EIGN LOANS & 9VE/M5TS W]E NOT SUFFICI5T TO REVIVE & 
DEVELOP EXTRA-,AM]ICAN ECONOMIES1 GOV]NM5T LOANS & GRANTS W\LD HAVE TO 
FILL ! GAP4 ,IF ! ,UNIT$ ,/ATES 05T]S 9TO 9T]NATIONAL 
COOP]ATION ON 9T]NATIONAL MONET>Y & F9ANCIAL >RANGEM5TS10 IT 
WAS SAID1 0& IF ! =EIGN LOANS >E 9VE/$ 9 PRODUCTIVE & USEFUL 
PROJECTS1 !N IT IS REASONABLE TO SUPPOSE ?AT OV] A LONG-RUN P]IOD ! 
9T]E/S & AMORTIZATION *>GES CAN BE PAID4 ,!Y WILL BE RELATIVELY SMALL 
9 PROPORTION TO TOTAL 9T]NATIONAL TRANSACTIONS & CAN QUITE EASILY BE 
MANAG$ 9 A REASONABLY /ABLE & PROSP]\S WORLD40.<#a#d.> ,MORE RADICAL 
,KEYNESIANS SUGGE/$ SOME =M ( PEACE-TIME L5D-LEASE1 ) A P]IODIC 
CANCELLATION ( 9T]NATIONAL CR$IT BALANCES2 = 0SURPLUS \TPUT %\LD 
NEV] BE CONSID]$ A PROBLEM AS LONG AS PEOPLE 9 ANY P>T ( ! WORLD >E 
UND]F$ & LIV+ 9 SUBNORMAL CONDITIONS1 UNTIL1 AS ,KEYNES HAS BE5 QUOT$ 
AS SAY+1 '! LA/ ,HOTT5TOT [NS A ,ROLLS-,ROYCE C>4' 0.<#a#d.> 

,FROM A ,KEYNESIAN PO9T ( VIEW1 =EIGN AID BY WAY ( GRANTS1 LIKE PUBLIC 
WORKS & >MAM5TS1 MAY BE REG>D$ AN 9/RUM5T = DOME/IC FULL 
EMPLOYM5T4 ,AT ANY RATE1 IT IS EASI] TO GET RID ( SURPLUS COMMODITIES ?AN 
SURPLUS POPULATIONS4 ,AS WAGES >E 0CO/S ( PRODUCTION10 ! 
PR(ITABILITY ( PRIVATE 5T]PRISE W\LD SUFF] IF SURPLUS PRODUCTS W]E 
DI/RIBUT$ AS HI<] WAGES4 ,! WAGE-SY/EM ITSELF PRECLUDES ANY SIGNIFICANT 
0FREE DI/RIBUTION20 = UND] ?IS SY/EM1 PEOPLE WORK ONLY IF 
!Y MU/4 ,9 ANY CASE1 A L>GE P>T ( SURPLUS PRODUCTION CONSI/S ( PRODUCTS 
:I* CANNOT BE DIRECTLY CONSUM$ AT ALL4 ,ELIM9AT+ OV]PRODUCTION ?R\< 
=EIGN AID ?US APPE>S ALMO/ IRRESI/IBLE1 = IT SEEMS TO LEAVE ! 
SOCIO-ECONOMIC CONDITIONS AT HOME UNDI/URB$4 

,BUT 0%>+ ! WEAL?0 ) O!R NATIONS WILL NOT B5EFIT 
DOME/IC BUS9ESS4 ,:ILE IT HELPS SOME 5T]PRISES :I* C\LD NOT FUNCTION 
PROP]LY )\T A /EADY DEM&1 =EIGN AID HAS TO BE PAID = \T ( ! 
:OLE ( DOME/IC PRODUCTION4 ,& ! DISPOSAL ( SURPLUSES BY WAY ( =EIGN 
AID1 LIKE !IR DI/RIBUTION VIA ! WAGE-SY/EM1 IS LIMIT$ = BO? ! 
GIV+ & ! RECEIV+ C\NTRIES4 ,9S(> AS IT 9VOLVES FREE DI/RIBUTION1 
OR DISPOSAL AT UNREALI/IC PRICES1 IT CUTS D[N ! 0EFFECTIVE 
DEM&0 /ILL 5JOY$ BY PRIVATE PRODUC]S1 IF NOT 9 ! AID-DISP5S+ 
C\NTRY !N 9 O!R NATIONS4 ,?\< UNAVOIDABLE1 IT ?US DOES NOT ALWAYS SUIT 
PRIVATE 9T]E/S 9 ! AID-RECEIV+ NATIONS4 ,%ORTAGES YIELD EXTRA PR(ITS 
& ! DI/RIBUTION ( FREE1 OR L[-PRIC$1 COMMODITIES DOES AFFECT 9T]NAL 
PRICE RELATIONS TO SOME EXT5T4 ,TRADE 9/EAD ( AID IS !N PREF]R$ BY BO? 
AID-DISP5S+ & AID RECEIV+ NATIONS 9 :I* PRIVATE PROP]TY RELATIONS 
DOM9ATE4 ,AID1 P>TICUL>LY 9 ! =M ( LOANS1 IS REG>D$ A NECESS>Y 
M$IUM = ! CREATION ( FUTURE TRADE RELATIONS & FUTURE PR(ITABLE CAPITAL 
9VE/M5TS4 ,! 0EXT]NAL EQUILIBRIUM0 TO BE A*IEV$ IS ?US 
/ILL M>KET EQUILIBRIUM4 

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