Institute for International Political Economy Berlin Marx and Keynes: from exploitation to employment Author: Fritz Helmedag Working Paper, No. 113/2019 Editors: Sigrid Betzelt, Eckhard Hein (lead editor), Martina Metzger, Jennifer Pedussel Wu, Martina Sproll, Christina Teipen, Achim Truger, Markus Wissen, Reingard Zimmer Marx and Keynes: from exploitation to employment Fritz Helmedag* Abstract Marx’s and Keynes’s analyses of capitalism complement each other well. In a rather general model including the public sector and international trade it is shown that the labour theory of value provides a sound foundation to reveal the factors influencing employment. Workers buy ‘necessaries’ out of their disposa- ble wages from an integrated basic sector, whereas the ‘luxury’ department’s revenues spring from other sources of income. In order to maximize profits, the wage good industry controls the level of unit labour costs. After all, effective demand governs the volume of work. On this basis, implications for economic policy are outlined. JEL-classification: E11, E12, E24 Keywords: Employment, Marx, Keynes, Surplus value * Chemnitz University of Technology, Economics Department, Thüringer Weg 7, D-09107 Chemnitz, Germany. Email:
[email protected] Paper presented at the IPE 10th Anniversary Conference: Studying Modern Capi- talism – The Relevance of Marx Today, Berlin, 12-13 July 2018. 2 Fritz Helmedag 1. Surplus value and the rate of profit The essence of this article is that the great economic thinkers mentioned in the title make a good couple not only regarding their exposure of capitalism’s mal- functions but also, and more importantly, from an analytical point of view.