Armaments and Full Employment

Michal Kalecki was in Oxford during the war and wrote the keynote essay in The Economics of Full Employment , six studies in applied economics, prepared at the Oxford University Institute of Statistics, and published in 1944. His essay is about the use of fiscal and monetary policy to achieve full employment in a capitalist economy. A year earlier he had written an article warning that full employment policies might encounter resistance from business leaders and industrialists. In the 1950s Kalecki, who had returned to Poland, appeared to change his view whether full employment under capitalism was a worthy and feasible objective. Two lectures on Armaments and the Business Cycle which he gave in 1955, throw light on this change of view, but they did not appear in English until the series of volumes of his Collected Works started to come out in the 1990s. The present note considers the arguments deployed in the lectures, and goes on to re-examine his original fears of political resistance. It concludes that he was right to stress such resistance, but argues that changes in the structure of capitalist economies in the past half-century have altered the nature of the politcal constraints.