Francesco Vito

This article discusses full employment policies in their general and theoretical terms and...

This article focuses on the features and the working of the European Coal and Steel Community, seen as a first step in the ongoing process of European Integration. In Vito’s view the integration process would bear many economic advantages not only for the high concentrated sectors of Steel and Coal, but also in agriculture and transportation. While not ignoring the complexadjustment problem arising from the closure of less efficient firms and the unemployment costs arising from it, Vito underlines economic and social advantages of the 1952 Paris Agreement for the economy as a whole: cost reduction; better terms of trade; technical improvements; development of capital equipment; new outlays for export production and international migration. Moreover the establishment of a common market in Europe would strengthen the sense of solidarity and trust in a common heritage of culture and values, laying down the foundations of a durable peace in Europe.

The article discusses Keynes’s proposal contained in ‘‘The Question of High Wages’’ (1930) and Pagni’s criticism against it. In the article there emerges the author’s aversion to Pagni’s thesis: wage rises reduce firms’ self-financing margins, and, more in general, the savings of entrepreneurs whence come investment and, consequently, employment. Vito is not completely against high wages, but only if they are within the limits set by economic law: ‘‘Limits are set on social policy; that believing to be allowed to cross these limits undermines the whole social economy and in particular the working class’’. Key words: theory of wages; J.M. Keynes; C. Pagni; wages and social policy. JEL Classification: B2, B31, E12, E24.

The article amends the theses supported by Tagliabue and recalls those advanced in the article written, again by Francesco Vito, in 1931 (‘‘The Question of High Wages and a Proposal by J.M. Keynes’’, RISS, pp. 194-203). The author maintains that the English crisis regarded the conditions of inefficiency which had weighed down on English industry well before the war; he reports the data collected and analyzed by Loveday, according to which English exports saw the lowest growth among all the developed countries, the only exception being Germany. Vito contests the fact that the sterling returned at a too high value, and also that the price deflation policy was responsible for the crisis after 1925. But, according to the author, the main problem is high wages which, not being proportional to labor productivity, prevented production from being rationalized. Key words: British monetary policy; wages and labor productivity; Loveday; Rueff; Hayek. JEL Classification: B2, B22, E12.

The author offers an overview and an overall interpretation of the various policy measures and programs composing in the New Deal launched by the newly appointed American President Franklin D. Roosevelt. A theoretical basis and clear objectives underlie the New Deal economic policies in their entirety. Supported by deep knowledge of literature and concrete experiences attested by unpublished documents, the article focuses on Veblen, technocracy and planning (Soule, Chase), under- consumption and income inequality (Foster and Catchings) pragmatism and quantitative studies (Mitchell), public expenditure (Hansen, Mitchell), scientific management, industrial coordination, social activism, and the leading position of J.M. Clark from Columbia University where originated the ‘‘Brain Trust’’. Vito analyzes furthermore the contribution by Tugwell, Slichter, Hamilton, Hansen, Paterson, and Lorwin. The needs for social reform and social control on economic activity prevail over the need for cycle stabilization related to monetary policy: Monetary stabilization does not work by itself if not in the short term, and therefore managed currency experiments have to be subordinated or functional to managed economy. The author also deals with the issue of high wages, which he positively evaluates when part of a policy of wealth redistribution, production coordination and re-equilibration between the various sectors. Key words: New Deal; Veblen, Soule, Chase, J.M. Clark, Tugwell, Slichter, Hamilton, Hansen, Paterson, Lorwin; managed currency/managed economy; high wages policy. JEL Classification: B2, B25, B31.