Emil Kauder’s journal article surveys the reconstruction of Keynesian economics in the United States, Britain, and Sweden. Moving through consumption theory, the multiplier, equilibrium, business cycles, and growth, it asks what remains of Keynes’s system after extensive revision. Its governing distinction is between the transformation of analytical instruments and the persistence of central theoretical and political commitments:
Man kann diese ganze Bewegung, die langsam schon in den dreißiger Jahren beginnt und heute noch im Flusse ist, keinesfalls als eine Anti-Keynessche Revolution bezeichnen.
English translation: This entire movement, which slowly begins as early as the thirties and is still in flux today, can by no means be described as an anti-Keynesian revolution.
Reconstruction proceeds largely from within Keynes-influenced economics. Kauder therefore evaluates particular revisions rather than presenting the history as a contest ending in one school’s victory.
Duesenberry’s consumption theory supplies a decisive example. Against a stable relationship between current income and consumption, it introduces social comparison, rising living standards, and dependence on previously attained income. Families resist reducing accustomed expenditure when income falls, so consumption need not retrace its upward path. Socially situated behavior displaces an allegedly universal psychological relationship. Yet this advance also limits the theory’s geographical reach:
Für andere Länder müßte Duesenberrys Theorie weitgehend umgeschrieben werden.
English translation: For other countries, Duesenberry’s theory would have to be substantially rewritten.
Kauder treats American patterns of social conformity as historically specific, not readily exportable assumptions. Consumption analysis gains explanatory detail by attending to social circumstances, but loses the simplicity of a universally applicable function.
The multiplier undergoes a corresponding transformation through its interaction with investment:
Die amerikanischen Volkswirte fanden, daß neben dem Multiplikator noch der Akzelerator eine solche Hebelwirkung hat.
English translation: The American economists found that, alongside the multiplier, the accelerator also has such a leverage effect.
Samuelson and Hicks connect investment-generated consumption with consumption-induced investment. Additional expenditure can consequently initiate oscillations rather than merely raise income. Government intervention may increase employment while introducing new cyclical disturbances. Price changes and productive bottlenecks further qualify the mechanism: monetary expansion cannot reliably increase real output when supply cannot respond. Stolper’s analysis of import-dependent economies adds the possibility that credit expansion worsens both inflation and the balance of payments. Stabilization prescriptions thus acquire national and structural limits.
The equilibrium discussion distinguishes criticism of Keynes’s wage assumptions from the deeper problem of explaining an aggregate resting point. Kauder does not regard attacks on workers’ money illusion as sufficient to defeat Keynes. De Jong’s reconstruction nevertheless leaves unresolved the mechanism that brings firms to a common equilibrium and maintains it. Lindahl and Lundberg instead emphasize the interval between plans and realized outcomes, during which supposedly constant magnitudes can change. Lundberg’s alternative largely restores a classical saving–investment framework with a Keynesian liquidity qualification. Here Kauder finds criticism less innovative than the reconstruction of consumption and multiplier analysis.
Failed forecasts of American postwar depression expose the practical stakes. Kauder reports Woytinsky’s criticism of an unstable consumption function while preserving Klein’s distinction between faulty calculations and faulty theoretical premises. Predictive failure weakens confidence without conclusively refuting the theory.
Growth economics shows most clearly how Keynesian development exceeds Keynes’s original framework. Harrod, Domar, Hicks, and Kalecki replace static configurations with sequences of expanding income, productive capacity, and investment. The central question becomes whether growth can sustain full employment. Marxian reproduction and underconsumption arguments enter alongside Robertson’s temporal analysis, which links income from an earlier period to current expenditure. Keynesian concepts become elements of a shared analytical repertoire rather than exclusive school property. Kauder nevertheless questions whether mathematically constructed growth paths provide dependable accounts of the future.
The conclusion locates Keynes’s continuing distinctiveness in the possibility of economy-wide equilibrium without full employment. Its political counterpart is the preservation of the market economy through public stabilization. Kauder’s assessment separates revisable analytical techniques from a durable theoretical proposition and policy orientation: Keynes’s successors transform his system while retaining its central problem.
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