Collected Works of Michal Kalecki, vol. 5, Developing Economies.

• Author: Malamud, Bernard

Michal Kalecki (1899-1970) is best known for his anticipation of Keynes. His examination in the 1930s of the workings of the capitalist system focused on interdependencies between income distribution, finance, and demand in an economy operating below full employment. This work on modern capitalism, together with The General Theory, is the basis of post-Keynesian economics and establishes Kalecki among the leading economists of the twentieth century. His collected works, edited by Jerzy Osiatynski, first appeared in Polish and have since been translated into English. Volume V brings together essays on economic development written by Kalecki in the 1950s and 1960s when he was at the Economics Department of the U.N. Secretariat, the Polish Academy of Sciences, or the Polish Central School of Planning and Statistics.

When Kalecki turned his attention from demand-constrained developed economies to supply-constrained developing economies, he kept his focus on the distribution of income between classes. He was intent that development should not come at the expense of low wage workers and poor peasants. Kalecki expected urbanization and industrialization to raise incomes and increase the demand for necessities. The supply of agricultural output then sets the limit to acceptable growth: more rapid growth drives up food prices, reduces real wages, and triggers inflationary conflict. He viewed feudal landlords, merchants and moneylenders - demons he thrashes throughout his essays - as major impediments to increased agricultural productivity and saw land reform as a first step toward development.

Kalecki had little confidence in the ability of indigenous capitalists to propel growth in less developed countries. They could not marshall sufficient resources, he feared, and their investments would be misdirected into luxury-good sectors. He therefore championed state capitalism, with development paced to protect the poor against inflation and financed by taxes on high incomes and luxuries. Kalecki recognized that capital imports could ease the constraint that agriculture placed on non-inflationary growth, but he was leery of foreign aid, loans repayable in goods excepted. Nowhere in these essays does Kalecki consider population control as a way to check the growing demands for food and the threat of inflation that he associated...