Robert R. Keller

Factor Income Distribution in the United States During the 1920's: A Reexamination of Fact and Theory

The traditional economic history of the 1920s emphasizes the importance of changes in the structure of the American economy. It is argued that three structural changes—monopoly power, technical change, and income distribution—tainted the prosperity of the twenties. The main features of this explanation are easily summarized. Rapid advances in technology reduced the costs of producing output. At the same time corporate monopoly power was increasing thereby restricting the tendency for output prices to fall. In the presence of weak labor unions, the interaction of technical change and monopoly power had the result of increasing “profits” relative to “wages.” The shift in the distribution of income not only favored owners of capital but it also created an imbalance between investment and consumption. Consumption expenditures could not keep pace with investment expenditures and this tendency towards underconsumption, in turn, was one reason for the onset of the Great Depression.

The Presidential Political Business Cycle of 1972

Previous studies of the political business cycle have examined time series data to determine whether a pattern of pre-election boom and post-election slump exists. The studies do not investigate the behavior and mechanisms by which a politician may effectuate a political business cycle. We focus on one time period, 1969 to 1972, and conclude that President Nixons personality and operating environment explain why he manipulated the economy for political gain. The mechanisms he utilized to improve macroeconomic conditions before the 1972 election include monetary policy, fiscal policy, and wage-price controls.

Monopoly Capital and the Great Depression: Testing Baran and Sweezy's Hypothesis

Baran and Sweezy in their book, Monopoly Capital,1 offer a challenging interpretation of the history of modern American capitalism. They argue that the transformation of the American economy from a system of small, competitive units to one characterized by large scale, oligopolistic firms, had a number of significant consequences. One of the most interesting of these was the inherent tendency of the American economy towards depression and stagnation. Their explanation of the relationship between chronic depressions and the rise of giant corporations can be paraphrased in the following way.** The giant corporations charged higher prices and received larger profits than their predecessors. The monopoly power associated with these firms enabled their owners to capture an increasing share of corporate income at the expense of workers. As the corporate sector became increasingly dominated by these giants, it increased the tendency for the income of capitalists to grow more rapidly than the wages of workers. This worsening distribution

The Kennedy-Johnson Tax Cut: A Revisionist History. By Martin F. J. Prachowny. Cheltenham, UK, Northampton, MA: Edward Elgar, 2000. Pp. ix, 227.

Was the Kennedy-Johnson tax cut and the tax surcharge of 1968 a triumph of “new economics” and “fine tuning” as the architects of these policies claimed? Not exactly, according to Martin Prachowny. He concludes that the chairmen of the Council of Economic Advisers (CEA) excessively trumpeted their self-described stellar performance and this self-serving propaganda led to the demise of activist stabilization policy.