Political aspects of “buffer stock” employment

Abstract

Despite co-discovering, with Keynes, the theoretical framework for the principle of effective demand, Kalecki was dubious about the ability of governments in capitalist economies to use macroeconomic policy to create full employment in the longer term. This is not due to any economic limitations on the efficacy of these policies, but rather to more fundamental political ones which ensure that, unless the underlying institutions of capitalism are changed, full employment cannot be maintained. The next section of this paper shows that Kalecki drew an important distinction between achieving full employment, which was possible with the aid of government fiscal policy increasing effective demand, and the maintenance of that employment.