Beyond Keynesianism: The Socio-Economics of Production and Full Employment.

• Author: Yeager, Leland B.

Beyond Keynesianism gathers papers presented at a conference held in July 1989 by the Labour Market and Employment research area of the Wissenschaftszentrum fiir Sozialforschung in Berlin. Almost all of the authors are or have been associated in one way or another with the WZB/LME (so abbreviated in the book). Matzner is also Professor of Public Finance at the Technische Universitat in Vienna; and Streeck, his coeditor, is Professor of Sociology and Industrial Relations at the University of Wisconsin. Because the authors evidently share a common outlook cultivated at the WZB/LME, their book, unlike the typical conference volume or Festschrift, may be reviewed mostly as a whole rather than article by separate article.

Despite "Keynesianism" in its title but as the word "beyond" perhaps does warm, the book says little about macroeconomic theories that build on Keynes's work. Keynes was concerned with aggregate demand, say the editors, and now attention can turn to the supply side. The book contributes to a new institutional economics. Even Keynes remarked in 1943 on the need, in the editors' paraphrase, "for far-reaching changes of institutions and policies if full employment was to be achieved."

The chief exceptions to my non-Keynesian characterization of the book occur in brief chapters near its end. Hansjorg Herr argues that whether countercyclical fiscal policy can work as intended depends heavily on specific national and international circumstances, including the "quality" of the national currency, which depends on how much confidence it commands. Japan supposedly was able to pursue fiscal policy effectively in the late 1970s, thanks to favorable labor-market institutions and industrial relations and an effective incomes policy. Around the same time, Herr says, Germany pursued an excessively restrictive fiscal policy. Expansionary French policy early during Mitterrand's presidency was frustrated by an unfavorable context. Herr attributes the foreign-exchange strength of the dollar until early 1985 to false expectations of U.S. economic policy. Heinz-Peter Spahn also ponders the fundamental indeterminateness of exchange rates under the current system, as well as ideas for international policy coordination. Jan Kregel considers the economics of German unification.

Perhaps the book's most pervasive theme is the importance of "diversified quality production." Competitiveness in national and international markets no longer hinges, if it ever...