Comment

There is a serious omission in the paper by Niels Thygesen, as there is no consideration of the role of the profit-wage-relationship in the present crisis. It is far from satisfactory to conduct reasoning on the business cycle in terms of the changes in the oil price or in terms of various changes in the components of effective demand. One has to take into account that most of the capitalist countries before the short boom in 1973, which gave the inflation an extra push, and before the recession in 1974, had difficulties in securing sufficient profits to stimulate and finance business investments.

The discussions about income policy and in some countries about new forms of collective savings (fonds) have their origin in these problems. Income policies are, however, difficult to apply in times of high employment.

Many signs show, that the high priority presently attached to the fight against inflation as compared to the efforts to increase employment, really is nothing more than proof, that several capitalist countries think it possible to change their past full employment strategy. By this I mean, that the fear of undesirable effects of high unemployment has been considerably reduced, so that the states have more leeway in accepting a more permanent unemployment as the basis for a redistribution from wages to profits. This feeling of a greater freedom of manouver is not only based on political assessments, but also on the fact that the states now think that they have a greater degree of control over economic development so that they may prevent an escalation of the crisis, that they are able to aim at that level of unemployment ploymentwhich is optimal for the wage-profit-relationship.

The question of a sufficiently expansive policy is in light of this not a question oi achieving closer international coordination or ensuring internal political backing of such an expansive policy. It is rather a question of a lack of interest in such an expansive policy, sometimes presented in form of warnings against repeating the errors of the past which were overexpansion with high rates of inflation as the consequence.