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Hilferding, Woytinsky and the fiscal orthodoxy of interwar social democracy

Author

Listed:
  • Engelbert Stockhammer

    (King’s College London)

Abstract

In 1931, when the Great Depression hit Germany, German social democrats discussed a proposal for a (proto-Keynesian) public-debt financed employment program, the so-called WTB plan drafted by Vladimir Woytinsky. But under the leadership of Rudolf Hilferding, the SPD’s main economics spokesperson (and a former finance minister), the SPD rejected the proposal. The paper argues, firstly, that Hilferding’s endorsement of the gold standard and fiscal austerity can be traced to his analysis in Das Finanzkapital. It, secondly, rejects purely ideational interpretation of social democracy’s hostility to public employment programs. This becomes apparent when considering the experience of other European countries. In the British case a non-Marxist labour government under Ramsey MacDonald also endorsed the gold standard and fiscal orthodoxy. The WTB plan represents a missed opportunity to develop a socialist Keynesianism that would have complemented the Austro-Marxist strategy of a democratic socialism well.

Suggested Citation

  • Engelbert Stockhammer, 2021. "Hilferding, Woytinsky and the fiscal orthodoxy of interwar social democracy," Working Papers PKWP2118, Post Keynesian Economics Society (PKES).
    • Handle: RePEc:pke:wpaper:pkwp2118
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    File URL: https://www.postkeynesian.net/downloads/working-papers/PKWP2118.pdf
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    References listed on IDEAS

    as
    1. L. Randall Wray, 2016. "Why Minsky Matters: An Introduction to the Work of a Maverick Economist," Economics Books, Princeton University Press, edition 1, number 10575.
    2. Tilton, Timothy A., 1979. "A Swedish Road to Socialism: Ernst Wigforss and the Ideological Foundations of Swedish Social Democracy," American Political Science Review, Cambridge University Press, vol. 73(2), pages 505-520, June.
    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    Keynesianism; Marxism; social democracy; economic policy; gold standard; Austro-Marxism;
    All these keywords.

    JEL classification:

    • B14 - Schools of Economic Thought and Methodology - - History of Economic Thought through 1925 - - - Socialist; Marxist
    • B24 - Schools of Economic Thought and Methodology - - History of Economic Thought since 1925 - - - Socialist; Marxist; Scraffian
    • B31 - Schools of Economic Thought and Methodology - - History of Economic Thought: Individuals - - - Individuals
    • N14 - Economic History - - Macroeconomics and Monetary Economics; Industrial Structure; Growth; Fluctuations - - - Europe: 1913-

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