Keynes and Kalecki on Full Employment


This essay compares the ideas of Michal Kalecki and John Maynard Keynes. The topic is, indeed, too broad. Thus, I narrow it down and just attempt to, very briefly, answer two questions. First, is Kalecki a Keynesian? And second, are there distinctions between Keynes’s and Kalecki’s positions on full employment?

To answer the first question, I mainly rely on the secondary literature by experts in the field. For the second question, however, I directly focus on Kalecki’s Political Aspects of Full Employment (Kalecki 1943) and Chapter 18 of Keynes’s General Theory Of Employment, Interest And Money (Keynes 2016). I highlight the differences in Keynes’s and Kalecki’s viewpoints and methods that are apparent in these works.

Kalecki Keynes full employment

Is Kalecki a Keynesian?

John Maynard Keynes and Michal Kalecki came from different theoretical and intellectual backgrounds but reached similar outcomes, most notably, the doctrine of effective demand. Keynes was a student of Marshall and thus his work bears more similarities to the orthodox economics (Davidson 2000: 3). Kalecki, on the other hand, belonged to the Marxian tradition and hence, the notion of class and the relation between capitalists and workers are conspicuous in his work.

Julio Lopez (Lopez 2002: 20) provides some insight into the reason for the similarity of their ideas. According to him, first of all, Keynes’s and Kalecki’s backgrounds were not radically different. Marx’s was not the only economics Kalecki had read but, on the contrary, he had studied classical economic theories. Second, Keynes and Kalecki lived around the same time. Since they were “… keen, perhaps even obsessive, observers of the world they lived in” (Lopez 2002: 20), it should not come as a surprise that they developed similar views on that world.

Despite the  similarities, there are several major differences between the theories of the two, including their stance on diminishing marginal returns (Lopez 2002: 610), determinants of investment (Lopez 2002: 613), endogenous money system (Kriesler 2016: 97; Lopez 2002: 616), distribution central role, imperfect competition and uncertainty expectation (Kriesler 2016: 97).

In short, the answer to the first question depends on what we mean by “Keynesian”. If “Keynesian” is the one with similar ideas to Keynes’s, then Kalecki is indeed Keynesian. If, on the other hand, “Keynesian” is the one who follows and/or borrows ideas from Keynes, then Kalecki is not. Although it is possible that he knew of Keynes’s work (Lopez 2002: 620), Kalecki developed most of his theories himself and on a quite distinct theoretical base.

Keynes’s and Kalecki’s positions on full employment

To investigate the distinctions between Keynes’s and Kalecki’s positions on full employment, due to time limitations for a comprehensive literature review, in the following, I only focus on Chapter 18 – The General Theory of Employment Re-Stated of Keynes’s General Theory Of Employment, Interest And Money (Keynes 2016) and Kalecki’s Political Aspects of Full Employment (Kalecki 1943).

Keynes has a conspicuous emphasis on human nature and psychological propensities. In the short Chapter 18, there are twelve direct references to psychology (e.g. psychological propensity, psychological law, psychological characteristics) and three instances of the direct use of the term, “human nature”. The frequent reference to the human nature, with the implication of a common set of psychological propensities among all human beings, is without clear definitions of the aspects or mentioning a theoretical source.

“Human nature” is an “empty signifier”[1], “a signifier without a signified” (Laclau 1996: 36). It can possess various meanings depending on who and in what context uses it. Reliance on empty signifiers in developing theories is troublesome, because, in the long run, it can lead to serious controversies and possibly complete undermining of the theory.

Reliance on a concept such as “human nature” can cause trouble. What we understand of the term is the superimposition of various forces, including cultural, historical, political and even economic. Therefore, “human nature” and our understanding of it changes once these forces or their balance change.

Keynes, however, is smart enough not to easily fall into this trap. In the same chapter, he briefly mentions that theories should be examined on the background of “our general knowledge of contemporary human nature” and “the world in which we live” (Keynes 2016: 226). Nonetheless, in the rest of the chapter, he continues with the general theory without reflecting on the conditions of its applicability to the world and human nature of his time.

On the other hand, Kalecki in Political Aspects of Full Employment relies less on human nature and individual psychological propensities. Instead, he builds his argument extensively on the notion of class and the relation between capitalists and workers. While these are also general concepts, they are much less ambiguous, because they obviously originate from the work of Marx. In this sense, Kalecki has an obvious Marxian view on the full employment question while Keynes’s approach is closer to (neo)classicals.

Politics and values are probably the most important factors that set the texts apart. While Kalecki’s work is explicitly value-laden and political, Keynes attempts to use a neutral and value-free language. In other words, while Kalecki is openly critical of the status quo, putting a significant portion of the blame on monopoly and capitalists for resisting full employment, Keynes’s text seems to be “scientific” and non-judgemental. Being free from values and judgement is only on the surface. On deeper levels, values are assumed and hidden in the methodology and the use of empty signifiers. In fact, as I have argued in Power and Knowledge (Karambakhsh 2016) the whole notion of value- and power-free knowledge is suspicious, if not overall fallacious.


In this essay, I considered two questions regarding Keynes and Kalecki. I argued that while the outcomes of their intellectual endeavours are similar, their points of departure are not. Their approach to the problem of full employment, at least in the selected works, are also different. While Kalecki is openly political, Keynes attempts to be “scientific”. That is why Kalecki can be viewed as Keynesian due to the similarities of the outcomes but not due to the theoretical base or methodology.


Davidson, P (2000), ‘There Are Major Differences Between Kalecki’s Theory of Employment and Keynes’s General Theory of Employment Interest and Money’, Journal of Post Keynesian Economics, vol. 23, no. 1, pp. 3-25.

Kalecki, M (1943), ‘Political Aspects of Full Employment’, The Political Quarterly, vol. 14, no. 4, pp. 322-330.

Karambakhsh, P (2016), ‘Power and Knowledge’. viewed 10 September 2016.

Keynes, JM (2016), General Theory of Employment, Interest and Money, Atlantic Publishers & Distributors (P) Limited.

Kriesler, P (2016), ‘Keynes, Kalecki and the General Theory’, In, Post-Keynesian Essays from Down Under Volume I: Essays on Keynes, Harrod and Kalecki, Springer, pp. 81-104.

Laclau, E (1996), Emancipation(s), Verso.

Lopez, JG (2002), ‘Two Versions of the Principle of Effective Demand: Kalecki and Keynes’, Journal of Post Keynesian Economics, vol. 24, no. 4, pp. 609-621.


[1] The idea of the empty (floating) signifier is originally from Claude Lévi-Strauss.