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Great Debt and a Few

Grievances: A note on
Michal Kalecki as my
adopted mentor
Wlodzimierz Brus
Published online: 25 Aug 2010.

To cite this article: Wlodzimierz Brus (1999) Great Debt and a Few Grievances:
A note on Michal Kalecki as my adopted mentor, Review of Political Economy,
11:3, 257-260, DOI: 10.1080/095382599106977

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 Review of Political Economy, Volume 11, Number 3, 1999 257

Great Debt and a Few Grievances:

a note on Michal Kalecki as my
adopted mentor
W L ODZIM IERZ B RUS
Wolfson College, Oxford OX2 6UD UK
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The aim of this note is to exam ine brie y the in uence Kalecki exerted on the author s
way of thinking as a political economist. It is therefore a highly subjective piece, w ritten
with the bene t of hindsight. The great debt the author feels he ow es Kalecki derives
from Kalecki s uncompromising rejection of any kind of dogmatism. This trait appears
both in Kalecki s seminal analysis of the macroeconomics of capitalism and in his
attempt to w ork out a theory of grow th of a socialist economy. In both cases one of the
most inspiring features of Kaleckian economics w as its constant aw areness of the need
to combine rationality w ith a full appreciation of its socio-political consequences. The
author s `grievances focus on Kalecki s insuf cient attention to microeconomics, and
hence to the role of market mechanisms and the supply side of the economy.

Unlike my contribution to the Michal Kalecki Memorial Lectures over 20 years

ago (Brus, 1977) , when I intended to examine som e aspects of his theoretical
achievements, m y purpose this tim e is to consider brie y the in uence Kalecki
exerted on m y own way of thinking as a political econom ist. The reader m ust
be warned therefore that this is a highly subjective piece, written with the bene t
of hindsight, particularly the hindsight derived from decades of mom entous
real-world events and dramatic intellectual re-evaluations.
It so happened that, in the course of my studies, both underg raduate and
postgraduate, I never acquired a proper m entor a teacher to whom the student
relates closely and whose though t and personality makes an indelible imprint on
one s conceptual fram ework, even when they later diverge. Michal Kalecki
became for m e such a mentor inform ally, of course, because I rst met him in
1955 (he returned then to Poland for good) when I was 35 and an already
established academ ic teacher. From then on, and particularly from 1956 until his
death in 1970, I had the good fortune and privilege to be close to Kalecki both
personally and professionally, although m y own elds of interest, let alone
capacities, were much narrower than his.
Kalecki rm ly believed in the advantages of socialism , but viewed with
deep mistrust its Soviet-type embodim ent. Despite the fact that he returned to
Poland when the post-Stalin `thaw was well underway, he at rst categorically
refused to be drawn into any work on socialist econom ics because he regarded
open-m inded analysis still to be impossible there. He accepted my invitation to
ISSN 0953-8259 print/ISSN 14653982 online/99/030257-04 1999 Taylor & Francis Ltd
 258 Wlodzimierz Brus

give, in Novem ber 1955, two lectures in the Institute of Social Sciences
(attached to the Central Comm ittee of the Polish United Workers comm u-
nist Party, but gradually becoming a hot-bed of revisionist ideas) only on the
condition that they would be strictly con ned to the capitalist W est. Even so,
these two lectures, `The impact of m ilitarisation on the business cycle after the
Second World War (Kalecki, 1955) , clearly signalled what was to becom e the
hallm ark of Kalecki s approach to any problem under exam ination: rejection of
all kinds of dogm atism, whatever its sacred sources just the opposite of the
`real socialist practice. Two important doctrinaire views were quietly and
convincingly undermined in the course of these two lectures: that the increas-
ingly evident success of the econom ic perform ance of the capitalist world after
the war should be attributed only to m ilitarisation, and that the burden of
militarisation was falling entirely on the shoulders of the workers. The com plex
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analysis of factors in uencing the dynam ics of the capitalist econom y, and of the
econom ic policy tools available for a degree of steering the process, m arkedly
contrasted with the belief then prevailing that the inevitable crash was just
around the corner.
The fast changing political circum stances in Poland, boosted inter alia by
Khrushch ev s denunciation of Stalin at the XX Congress of the Soviet Com m u-
nist party, opened the way for Kalecki to drop his reservations about the
inadvisability of engaging in theoretical discussion of socialist econom ics. The
most signi cant m anifestation of this new attitude cam e during the National
Congress of Econom ists in June 1956 in the paper on `Investment and national
incom e dynamics in socialist economy (Kalecki, 1956). The paper was directed
against the so-called law of faster developm ent of the produc er goods sector
(`departm ent I in the Marxian reprod uction schemes of vol. II of `Das Kapital )
as an allegedly absolute condition for sustained growth. By using a sim ple
growth m odel, which was to be the starting point for his theory of growth under
socialism , in com bination with his own interpretation of the Marxian repro-
duction schem es, Kalecki demonstrated how inadmissible the absolutist conclu-
sions were. The strong impression Kalecki s paper m ade on me, as well as on
the gathering as a whole, was not because he endorsed or refuted a speci c
developm ent policy in absolute terms, but because he showed that conclusions
have to be derived from assumptions and interrelations clearly de ned and
without the vagueness that provid es a breeding groun d for fetishist beliefs
planted behind a sm oke-screen of `holy Scriptures , in this case of wrongly
interpreted Marxian theory.
Perhaps most inspiring in the Kaleckian way of practising econom ics was
his constant awareness of the need to combine rationality with full appreciation
of its socio-political implications. In no other eld, probab ly, did this come out
more clearly during his Polish years than in his work on the theory of growth
under socialism and the related problem s of long-term planning (Kalecki,
195764). It is also in this eld that m y debt to Michal Kalecki as m y m entor
is the greatest.
Each step in his analysis contained a careful scrutiny of the consequences
of a particular growth policy for living standards. Even with an existing pool of
unem ployed labour warranting an acceleration of growth, the trade-off between
 Great Debt and a Few Grievances 259

the relative loss in consum ption at early stages against later gains was m eticu-
lously examined, the more so when the contem plated acceleration of growth
would involve an increase in the capital intensity of produc tion, and hence the
long-term gains in consum ption could not be taken for granted. But even when
such gains were certain, within given theoretical assum ptions continuing in
perpetuity and reaching a m axim um level under the so-called `golden rule
conditions, Kalecki insisted on the need to take into account the impact of the
choice of capital intensity in the course of the `recasting process. I mention the
growth theory as an example, but evidently it carried a wider m essage: all the
beloved slogan-type objectives of socialist planners (such as raising produc tivity
as much as possible or aim ing at the highest possible level of technology) should
not be regarded as fetishes and m ust be subjected to rational exam ination in the
light of existing circum stances and in relation to their social effect.
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This kind of message obviou sly could not endear Kalecki to the powers that
be (by 1964 he had to abandon all involvement in Polish planning practice),
despite the fact that his uncom prom ising anti-dogmatism applied in equal (or
perhaps stronger) m easure to the market m echanism . Kalecki s criticism of the
latter, including `Say s law , the rising m arginal cost curve etc, is too well
known to need repeating here, but I want to invoke my personal experience in
the context of the drive for reform of the Polish econom ic system in the second
half of the 1950s. As often happens when disillusionm ent with a trusted line of
action occurs, former believers move to the opposite extrem e. This was the case
with m any of us Marxist economists, m yself included when the full extent of
the damage in icted on the Polish econom y by Stalinist central planning becam e
apparent. Kalecki warned against substituting unlimited con dence in all-em -
bracing comm and planning with equally unlim ited con dence in m arket automa-
tism, where the m ovem ent of perfectly exible and sensitive prices is supposed
to steer the econom y invisibly along a rational dynamic equilibrium path. It
would not be right to say that, in the course of our subsequent joint work on the
principles of the reformed econom ic system (`new m odel , as we used to call
those proposals the authorities never agreed to implement), m y own views
became identical with Kalecki s; but his in uence was strong enough to rid m e
of my neophy tic zeal.
The above rem arks should be regarded only as an illustration perhaps a
pale one of the general direction of Kalecki s thinking and of the great
bene cial in uence it had. So, why speak at all of grievances against him as m y
mentor? This is a very dif cult question to answer because one has to distinguish
between aspects of socio-econom ic reality which, at the tim e, were barely
perceptible or at least of m uch lesser signi cance than today (like the globalisa-
tion of capital m ovem ents, explosion of the share of services in national output
and dramatic changes in social structure), and factors which even then could and
should have been taken into consideration in theoretical analysis.
Kalecki was predom inantly a m acroeconomist, especially so with regard to
a socialist econom y, with comprehensive nationwide planning as its de ning
feature. He paid relatively little attention to the behaviour of econom ic agents on
the microscale, and when he did it was mainly from the point of view of
inducing them to implem ent proper ly the provisions of the plan (not necessarily
 260 Wlodzimierz Brus

expressed in form al detailed indicators). One rarely nds in Kalecki s writings

references to the role of innovative behaviour by m anagers in a socialist
econom y as a vital element of economic ef ciency, which m ay to som e extent
explain his treatment of technical progre ss in the theory of growth as exclusively
exogenous. A link can probab ly be established between the insuf cient attention
to microeconom ics and Kalecki s rm conviction of the decisive function of
demand-managem ent in securing sustained developm ent with an adequate level
of utilisation of resources, particularly labour. I support the aggregate dem and
approach to econom ic dynam ics; the apparent ability of central planning to
adjust incom e distribution between wages and pro ts to the capacity level of
output and employm ent was to m e the m ain econom ic attraction of socialism .
But this ought not to m ean disregarding the supply-side, which is inevitably
connected with entrepreneurship, competition, rivalry, Schumpeterian `creative
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destruction , and hence with the market mechanism and full consideration for
proper ty rights. Unfortunately, Kalecki did not discuss the consequences of the
fact that all these elem ents were missing in the existing socialist economy. The
emphasis was always on governm ent actions, not only under socialism but also
in the Third W orld and the developed capitalist countries. The essence of
`funda mental reform of capitalism (the subject of Kalecki s last article, pub-
lished posthum ously Kalecki 1971) , which was supposed to generate the
stability of the system after the Second W orld W ar, was presented as consisting
mainly of increased state interventionism , which lled up the aggregate dem and
gap, substantially reduced unemployment, and developed the `welfare state . As
for the socialist state, whose dom inant position in resource allocation was
rightly beyond any doubt, Kalecki never took on board the problem of
self-interest and con icts within the suprem e layers of authority: the central
planner appeared usually as a hom ogeneous entity striving correctly or erro-
neously, this is another m atter to attain some general objective.
All this could never have overshadowed the cardinal in uence of Kalecki s
anti-dogm atism and m anifestation of the inseparability of the social from the
econom ic, but nevertheless it m ade itself felt in my evolution as an econom ist,
delaying the necessary revision of som e previously cherished concepts. Needless
to say, the points raised in this brief note are contentious, but they deserve to be
discussed on the occasion of Michal Kalecki s centenary.

References
Brus, W. (1977) Kalecki s economics of socialism. Oxford Bulletin of Economics and Statistics,
39(1), pp. 5767.
Kalecki, M. (1955) `The impact of armaments on the business cycle after the Second World War .
In Collected W orks of M ichal Kalecki, vol. II, 1991, pp. 351373 (Oxford, Clarendon Press).
Kalecki, M. (1956) Investment and national incom e dynamics in socialist economy. Ekonomista,
49(5), pp. 6170 (in Polish). In a revised form published in Collected Works of M ichal
Kalecki, vol. III 1992, pp. 131157 (Oxford Clarendon Press) under the title `Problems in the
theory of growth of a socialist economy .
Kalecki, M. (195764) Long-term planning. In Collected Words of Michal Kalecki, vol. III, 1992,
pp. 181254 (Oxford, Clarendon Press).
Kalecki, M. (1971) (with T. Kowalik) Observations on the `crucial reform . In Collected W orks
of M ichal Kalecki, vol. II, 1991, pp. 467476 (Oxford, Clarendon Press).