Hilferding, Woytinsky and the fiscal orthodoxy of interwar social democracy

Engelbert Stockhammer

No PKWP2118, Working Papers from Post Keynesian Economics Society (PKES)

Abstract: In 1931, when the Great Depression hit Germany, German social democrats discussed a proposal for a (proto-Keynesian) public-debt financed employment program, the so-called WTB plan drafted by Vladimir Woytinsky. But under the leadership of Rudolf Hilferding, the SPD’s main economics spokesperson (and a former finance minister), the SPD rejected the proposal. The paper argues, firstly, that Hilferding’s endorsement of the gold standard and fiscal austerity can be traced to his analysis in Das Finanzkapital. It, secondly, rejects purely ideational interpretation of social democracy’s hostility to public employment programs. This becomes apparent when considering the experience of other European countries. In the British case a non-Marxist labour government under Ramsey MacDonald also endorsed the gold standard and fiscal orthodoxy. The WTB plan represents a missed opportunity to develop a socialist Keynesianism that would have complemented the Austro-Marxist strategy of a democratic socialism well.

Keywords: Keynesianism; Marxism; social democracy; economic policy; gold standard; Austro-Marxism (search for similar items in EconPapers)
JEL-codes: B14 B24 B31 N14 (search for similar items in EconPapers)
Pages: 18
Date: 2021-11
New Economics Papers: this item is included in nep-his, nep-hpe and nep-pke
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