Observations on Populism and the New Ideas of Michał Kalecki
The socialist theorists only became capable of… analysing [capitalism] after they had overcome the one-sided pamphleteering and accusation that was typical of the early critical as well as socialist literature. (Tadeusz Kowalik) 
It is difficult to write scientifically about populism. Historically, the concept is rooted in the political philosophy and rhetoric of rural societies reacting to and emerging into urban industrial ways of living and thinking, ways that have inevitably differed according to the historical experiences of rural populations and the process of their urbanization. Those differences in historical experience gave rise to fundamental dissimilarities between American and European populism. Modern populism, associated with anti-globalization attitudes towards cosmopolitanism, immigrants and international co-operation, shares something in common with that earlier populism: a sense of regret about the now partly forgotten promise of prosperity. But it is driven by the failure of an urban economy to provide that prosperity.
Underlying the populist reaction of today are sentiments of nostalgia and conspiracy, both in relation to the causes of the loss of welfare and the means of its recovery. These sentiments have provided the fuel for populist movements, but not the rational analysis that those movements would require to succeed in improving social conditions. Such rational analysis requires an understanding of the ‘impersonal forces’ in the economy that drive such factors as employment and wages. The Polish economist Michał Kalecki (1899–1970) provided insights into those ‘impersonal forces’, which he believed were essential for the rebuilding of economic prosperity through full employment.
That old populism
Populism in Poland and Central Europe needs no introduction to a Polish audience. The roots of the movement, in the last decades of the 19th century, lay in the grievances of the rural masses, beset by hunger, illiteracy and inadequate housing, surviving on the margins of subsistence and often landless owing to the ubiquitous large, neglected estates owned by aristocratic absentee landowners. Early attempts by the rural poor to secure change played a progressive part in the emergence of nation states following the Treaty of Versailles peace settlements at the end of World War I and kept at bay the trend towards authoritarian rule that was undermining the new democracies in the 1920s and 1930s. But, in large part, new dictatorships were established precisely because of the inability of those movements to comprehend the nature and the scale of the economic turmoil affecting their countries.
Populism in the United States was different. It had its roots in the mass protests of the 1880s and the 1890s against the economic depression that gripped the country following the Reconstruction after the American Civil War. The difference can be attributed to the different nature of US society and economy, which was more fully integrated into the modern capitalist world than the rural economy of Central and Eastern Europe. The populists emerged not from subsistence farming or even from the ruins of the slavery system in the defeated Southern States, but from among the settled farmers who owned their land and supplied often distant markets with their produce by means of the new railways. Following the end of Reconstruction in 1877, when the military occupation of the former Confederate States was terminated and power in Congress passed to a coalition of Southern Democrats and anti-Reconstruction Republicans, the US economy went into recession. As agricultural prices dropped, farmers fell into debt that was secured against their farms, from which they were later evicted (in the 1930s). They blamed the banks, the railway companies that were overcharging them for transporting goods and the financiers who established those companies. The farmers found ready support in urban areas among organized workers who were pressured by their employers to accept lower wages, as well as by small businesses that were being squeezed by competition from large corporations. All of them were beginning to suffer from a shortage of money after the printing of banknotes was restricted following the adoption of the gold standard by the United States – a measure that gave international convertibility to US dollars.
American populists rallied to the banner of William Jennings Bryan, the Democratic candidate for the presidency in 1896, who expressed the populists’ distrust of cosmopolitan elites and international finance in his famous Cross of Gold speech. At the Democratic National Convention in Chicago that year, Bryan fervently criticized the gold standard, behind which lay the interests of the old colonial power, England, and the moneyed classes on the East Coast. During his campaign he restated his rousing conclusion whenever he got the chance and was met by mass applause: …Having behind us the commercial interests and the laboring interests and all the toiling masses, we shall answer their demands for a gold standard by saying to them, you shall not press down upon the brow of labor this crown of thorns. You shall not crucify mankind upon a cross of gold .
Bryan offered labourers and industrialists bimetallism (the use of silver in addition to gold in coinage) as a solution to an apparent monetary deficit in a country burdened by debt and deflation. He was effectively the last hope of the old People’s Party that had organized resistance to railways and banks in rural areas. When Bryan lost the presidential election that year to William McKinley, the hopes vested in a simple monetary solution to the complex problem of the post-Reconstruction economic depression were also defeated.
A more lasting intellectual legacy of the populists exists in the work of the Norwegian–American economist and sociologist Thorstein Veblen, most notoriously his sardonic Theory of the Leisure Class (1899) . But he expressed the economic attitudes of populism even more starkly in his blistering critique of big business, The Theory of Business Enterprise (1904). This was one of the first books to analyse the economics of a capitalism dominated not by the calculating entrepreneur of romantic myth and economic textbooks, but by the large corporations whose affairs and scandals were uncovered by the Industrial Commission in the early years of the 19th century. The commission had been appointed by McKinley in 1898 in response to the populist mood in the country at large. It revealed that the leading industrialists of the day, men like Andrew Carnegie, Cornelius Vanderbilt and John D. Rockefeller, who claimed to have become rich by thrift, relentless industrial innovation and business efficiency, actually had done so through manipulating the capital markets, in which stocks and shares issued by corporations were traded.
In his book, Veblen described business as ultimately condemned to stagnation because competition for work kept wages, and therefore mass consumption, low. The stagnation was only broken by occasional speculative booms in the stock market, when ‘captains of finance’ deluded themselves that the bubbly financial markets in which they operated were real, only to be confounded eventually by the reality of limited mass consumption. Wars, such as the Spanish–American War of 1898, which was financed by government debt and created a demand for armaments and military equipment, were another source of debt-fuelled speculation . In October 1907, shortly after the book’s publication, a large New York bank that had been speculating in the copper market, the Knickerbocker Trust Company, collapsed. The crisis that followed resulted in the establishment in 1913 of the Federal Reserve System, which was supposed to put an end to financial crises.
Veblen’s interpretation of corporate finance was hugely influential among the early writers on money and finance. Irving Fisher drew the most important ideas in his Debt-deflation Theory of Great Depressions from Veblen . John Maynard Keynes had the book on his reading list for his lectures at Cambridge University (UK). While academic economists created for their business-school audience a mythical image of capital markets in which the savings of the provident were applied by those markets to the most productive investments, Veblen, Keynes and other keen observers of corporate finance, such as the editor of The Economist Hartley Withers and the popular writer John A. Hobson, knew that the capital markets were the peculiar financial product of business corporations and the credit system in which they operated. The distinctive feature of those markets was that they trade in long-term financial instruments, which provided financing at a fixed cost for corporations, allowing them to build up monopoly power by buying up the shares and long-term debts of other corporations. Hobson is best known for his 1902 classic, Imperialism: A Study, which Lenin admired. But Hobson’s imperialism is essentially the political expression of international finance, frustrated by the absence of investment opportunities in depressed industrialized countries, much like the haute finance of another critic of cosmopolitanism, Karl Polanyi .
The European critique of corporate capitalism
In Europe, populism as a rural movement was associated chiefly with protest against large landowners and demands for the improvement of the social and economic position of small farmers and landless peasantry. This rural movement has by no means disappeared in Eastern Europe. The critique of banking and corporate capitalism that was a feature of American populism was much more urban-centered in Europe, where it was powered by mass social democratic parties and trade unions.
The new capitalism of corporations was studied in Europe by Rudolf Hilferding, who presented a far more systematic account of the economic and social impact of the new industrial behemoths. He called the harnessing of the markets to secure their own long term finance and corporate enrichment ‘Finance Capital’, which became the title of his most important book. Hilferding was a Marxist who first came to the attention of members of Austria’s Social Democratic Party in 1904 with his vigorous defence of the labour theory of value against the criticism of Eugen von Bőhm-Bawerk. In 1910 he published Das Finanzkapital: Eine Studie űber die jűngste Entwicklung des Kapitalismus to wide acclaim among German and Austrian Marxists. However, the significance of the book goes far beyond the doctrinal disputes of Marxists and the lending practices of the Berlin clearing banks for which it is best known. In this work Hilferding put forward two fundamental ideas about the operations of corporations and finance that place him among the founders of the modern theory of the business cycle and 20th-century macroeconomics.
The first idea is that rates of profit for different firms vary according to their monopoly power and cartel membership, because colluding in fixing prices is the standard way in which firms deal with ‘excessive’ competition under difficult business conditions. Non-corporate businesses, the small and medium-sized enterprises that embody, much more than bureaucratic corporations, the entrepreneurial spirit of capitalism, are disadvantaged by such monopolistic practices. This is because in any given market the bulk of profits is swept up by corporations, leaving smaller firms with mere crumbs from the table, or even losses. In the course of a business cycle, corporations therefore benefit disproportionately during a boom, while smaller firms suffer the greatest business casualties in a recession.
The second idea in Hilferding’s book involves the role of international finance in creating markets for the large corporations in the colonies or in developing countries. This use of international credit and loans to finance the export of capital is an additional way in which big business is able to stabilize its operations and finances. Hilferding pointed out that this greater relative stability of the corporate sector is the incentive for other firms to join their cartels. There is even a hint that, eventually, when all capitalists have joined a ‘general cartel’, capitalism will be stabilized .
This last possibility aroused the greatest controversy among Marx’s European followers. If capitalism could indeed be stabilized through the coordination of business activity, then the prospect for the ‘economic breakdown’ of capitalism that was supposed to make socialism inevitable would disappear. Hilferding himself rejected any such inevitability, which he saw as condemning socialists to merely waiting for the next stage of history to happen so that they could appear on the stage. However, when the catastrophe of World War I was followed by extreme swings in European economic activity from short booms to increasingly prolonged recessions, economists in Austro-Marxist circles started to question whether capitalism could be stabilized in this way.
A Polish voice emerges
On the fringes of these discussions, in newly independent Poland, was a young Polish business journalist, Michał Kalecki. He knew about business because his father was a small factory-owner in the Polish manufacturing capital of Łódź whose business had been ruined in the course of the Russian Revolution of 1905 (a rehearsal for the Russian Revolution of 1917). The young Kalecki, born in 1899, was forced to give up his engineering studies when he was drafted for the Polish–Soviet War of 1919–21, and after the war turned to business journalism to earn a precarious living. No one understood credit cycles and corporate capitalism better than that Polish journalist. He scoured the business and financial press for information not only about markets but also about the corporations, banks and smaller enterprises that made the economy work.
By the 1930s Kalecki found himself in the intellectual orbit of Ludwik Krzywicki, a Polish Marxist economist who is known today (if at all) for his work on agricultural economics. Krzywicki, born in 1859, was one of the first generation of Polish Marxists. In 1893 he spent six months in the United States, and even visited Chicago to see the World’s Columbian Exposition showcasing American industrial achievements to commemorate four centuries since the discovery of the United States by Christopher Columbus. Krzywicki returned to Poland impressed by the technological dynamism of American industry, but aware too that that the new industrial giants were systematically eliminating the competition on which capitalism depended for its growth .
Because of the similarities in their economic theories, Kalecki is most commonly associated with the older, more upper-class British economist John Maynard Keynes (1883–1946). But there were important differences. Keynes, who was notoriously prone to believing that all that stood in the way of human happiness was ignorance and a bone-headed unwillingness to listen to his advice, regarded business as benign but over-cautious. Kalecki echoed the old populist suspicion of big business, but in a much more systematic way.
The contrast between their outlook is very apparent in their respective views on one of the more colourful business figures of the inter-war period, Ivar Kreuger. In a world where all governments had trouble paying off the debts that they had incurred in World War I – debts which the Treaty of Versailles secured on German reparations, but which the German government could not pay – Kreuger specialized in buying up and cancelling the bonds of indebted governments in exchange for monopolies on the sale of matches. These purchases were financed by shares issued by his companies in the New York market. With the collapse of that market in 1929, Kreuger found it increasingly difficult to provide the security that his bank creditors demanded and, on 12 March 1932, he shot himself through the heart in his Paris apartment.
In a note on Kreuger for a short-lived Polish socialist periodical, Przegląd Socjalistyczny (Socialist Review), Kalecki reviewed the financier’s heroic role in ‘facilitating the international circulation of capital, which was always lagging behind the development needs of the post-war capitalist world’. However, he also pointed out Krueger’s business strategy of monopolizing the world match market to the point where only the United States, France and the Soviet Union had markets beyond his control. Matches may seem an odd vehicle for the extraction of monopoly profits. But Kalecki pointed out that their markets were relatively immune to business cycles because of the low price of matches in relation to household income. Kreuger’s business empire was compromised, in Kalecki’s view, by a loan of US$125 million which he was obliged to give to the German Treasury at the end of 1929 in order to secure a ban on imports of matches from the Soviet Union into Germany. Nevertheless, Kalecki was clear about Kreuger’s role in the evolution of capitalism, a progression that depended on institutions rather than the individuals who cast themselves as the heroes in the economic drama: ‘The functioning of capitalism depends not on the nature of individual foremen who control its mechanisms, but on the structure of those mechanisms.’ 
Kalecki’s view contrasted with that in the business press generally, and especially in the financial markets, where it was believed that Kreuger was the victim of market pressures beyond his control. The Economist reported the financier’s death as ‘the veritably tragic wreck of a career which in its sphere was unsurpassed by that of any individual in living memory …a force for good’ crushed by the bleak circumstances of his time . Even Keynes, who was willing to concede that the operators on the New York Stock Exchange possessed ‘a gangster mentality’  saw in Kreuger a ‘tragic’ victim of liquidity preference: …perhaps the greatest constructive business intelligence of his age, a man whose far-flung activities have been in the widest sense in the public interest, who had conceived it his mission in the chaos of the post-war world to furnish a channel between countries where resources were in surplus and those where they were desperately required, one who built on solid foundations …crushed between the ice-bergs of a frozen world which no individual man could thaw and restore to the warmth of normal life. The spectacle of capitalists, striving to become liquid as it is politely called, that is to say pushing their friends and colleagues into the chilly stream, to be pushed in there by some more cautious fellow from behind, is not an edifying sight .
Keynes had no doubt who was to blame: ‘There is nothing in the world like the cruel and cold-blooded beastliness of the American bankers.’ 
By the time Krueger committed suicide, the world was already well into the Great Depression that followed the Wall Street Crash of 1929. In general, most economists lined up behind an orthodoxy that stressed the importance of the price mechanism in stemming the rise of unemployment. If wages were falling, then eventually labour would become so ‘competitive’ that firms would start to employ workers again.
In Europe the country most badly hit by the Great Depression – in the sense of suffering the largest percentage increase in unemployment and the greatest percentage decline in industrial output – was Poland. In 1933 Kalecki published in Polish his explanation of why economies went through successive phases of growth and recession, and why an economy may end up being trapped in a recession regardless of how much ‘freedom’ is given to market forces. This is because, in any given period, actual employment and total production do not depend on the ability of prices to adjust to such a combination of consumer tastes, preferences and resources that makes supply match demand in all markets. Instead, they depend on the total volume of investment in infrastructure and industrial equipment that is undertaken in that period. Investment is the key factor, because it determines how much profit firms can realize in any given period. Indeed, without spending on their own consumption and on investments, capitalists cannot make a profit. Simply selling goods and services to their workers could at best enable them to recoup the money they have paid their workers in the form of wages, thus covering their wage bill. To realize profits, businesses need to invest and capitalists need to consume.
In his pre-war journalistic writings, Kalecki would often explain the complexities of such economic relationships by offering much simpler analogies. Perhaps his most effective one is his railway example: Let us assume, as often happens in the USA, that two competing railway lines run between two cities. Traffic on both lines is weak. How does one deal with this? Paradoxically, one should build a third railway line, for then materials and people for construction of the third will be transported on the first two. What should be done when the third one is finished? Then one should build a fourth and a fifth one …This example, as we warned, is paradoxical, since unquestionably it would be better to undertake some other investment near the first two railway lines rather than build a third one; nevertheless, it perfectly illustrates the laws of development of the capitalist system as a whole. 
The practical problem, in such circumstances, is that firms are discouraged from investing by the existence of unused capacity in the factories that they already have. New investments are usually made when new capacity is required, in other words, once existing capacity is fully utilized. Kalecki wrote: We very often encounter the argument against building new factories while the old ones are still unemployed. This simple truism shares the fate of many of its fellows – it is false. In order for existing capital equipment to be fully employed, it must be continually expanded, since then accumulated profits are invested. If they are not invested, profits fall and, along with the fall in profits, there is a decline in the capacity utilisation of existing factories .
Kalecki concluded in dramatic style: We can see that the question, ‘what causes periodic crises?’ could be answered shortly: the fact that investment is not only produced, but also producing. Investment considered as expenditure is the source of prosperity, and every increase of it improves business and stimulates a further rise of investment. But at the same time every investment is an addition to capital equipment, and right from birth it competes with the older generation of this equipment. The tragedy of investment is that it causes crisis because it is useful. Doubtless many people will consider this theory paradoxical. But it is not the theory which is paradoxical, but its subject – the capitalist economy .
For these reasons, Kalecki was scathing about the ‘brains trust’ made up mostly of university professors from Columbia University, who advised Franklin D. Roosevelt in the first days of his presidency on the economic strategy necessary to revive the American economy: The ‘brains trust’ has the ambition not only of stimulating a business upswing but also of initiating a new ‘capitalist-planned’ era in the history of the United States. These ideas are striking in their over-simplicity and lack of understanding of the mainsprings of the capitalist economy. ‘Planning’ here boils down mainly to forming cartels to combat ‘ruinous competition’ and prevent ‘over-investment’. It is easy to show that this primitive idea of planning will not stand up to analysis. Cartels warding off ruinous competition will earn profits; but for these profits to be realized, investments must be made, since the total profits of capitalists equal the sum of their consumption plus their investments. If cartels can achieve profits while not investing, the only reason is the existence of non-cartelized industry, part of whose assets cartels directly or indirectly appropriate. However, if the entire economy were made up of cartels, then obviously they could not achieve large profits without making large investments. If they refrain from investment, then this should lead to the contraction of profits which, with inflexible prices, would result in reduced sales .
In this sense then, corporations, monopolies and cartels feed like parasites on the non-cartelized sector of small and medium-sized retail and industrial enterprises, farms and so on. The profits from their individually modest investments accrue disproportionately, through the functioning of the markets, to the corporations that dominate those markets. The losses of the smaller businesses have to be covered from their reserves or by borrowing. In this way their inconsiderable savings pass into the possession of those corporations, whose accumulations of liquid assets (bank deposits) are ultimately backed in bank balance sheets by the mounting debts of the smaller businesses.
Here too was Kalecki’s answer to Hilferding’s suggestion that the economy could be stabilized by means of a ‘general cartel’ that would coordinate prices and production in the economy as a whole while retaining the profit motive as the key incentive to production. Kalecki had previously criticized the notion that cartels had a stabilizing influence on the business cycle. In fact, he argued, such price coordination makes cycles more extreme: in a boom, cartel members tend to over-invest, because their production quotas in the cartel are usually related to their productive capacity; in a recession, cartel members can still squeeze out profits from their market and this prevents them from shutting down their unused capacity, the elimination of which is the precondition for firms to start investing again. In this way, booms are augmented and recessions prolonged by the existence of cartels .
The politics and financing of full employment
In 1936 Kalecki came to Britain on a fellowship from the Rockefeller Foundation. With the emergence of authoritarian governments in continental Europe, including Poland after the military coup of Józef Piłsudski in May 1926, and the increasing belligerence of Nazi Germany, the foundation provided a lifeline to many critical intellectuals whose political circumstances were making their lives difficult. In Britain, Kalecki was introduced into Keynes’s circle by a fellow economist, Joan Robinson. Keynes was impressed, sometimes even frustrated, by the younger man’s analytical abilities. But they both agreed that the dire weakness of business investment that was the cause of the economic recession could be overcome by an ‘artificial’ boom based on fiscal stimulus. This was what led them both to support the fiscal policy of Roosevelt’s New Deal. For Kalecki, fiscal deficit has the merit not only of expanding demand in general, it also provided a market for the private sector that did not have to be paid for by the private sector. In any other scenario firms have to pay their workers if they are to sell their goods to them, and they have to finance investments so that firms can turn a profit. In this way, fiscal deficit increases the revenues and profits of the private sector.
Kalecki had very clear views on how such economic stimulus should be financed. Ideally, it should be done by borrowing, thereby mobilizing the unused financial reserves of corporations, whose inactivity was the cause of the economic crisis. But if there was political pressure to balance the government’s budget, this could most effectively be done by means of a wealth tax. The idea would be to take money from the rich and pass it to businesses in the form of profit, through spending by government employees and by people receiving government welfare. He argued that such taxation ‘has all the merits of financing the state expenditure by borrowing, but is distinguished from borrowing by the advantage of the state not becoming indebted’ . Kalecki was not alone in advocating such a ‘capital levy’. Keynes was a keen supporter of this fiscal measure, as were the political economists Joseph Schumpeter and John A. Hobson, and endorsements can even be found two centuries earlier, by the British political economist David Ricardo.
Kalecki recognized that such solutions, however rational, challenged what he called ‘the power of capitalists in society’ and their ‘power in the factories’. He did not expect them to welcome full employment, which undermined that power. His explanation of the power of big business ‘in society’ is striking: Under a laisser-faire system, the level of employment depends to a great extent on the so-called state of confidence. If this deteriorates, private investment declines, which results in a fall in output and employment …This gives the capitalists a powerful indirect control over government policy: everything which may shake the state of confidence must be carefully avoided because it would cause an economic crisis. But once the government learns the trick of increasing employment by its own purchases, this powerful controlling device loses its effectiveness. Hence budget deficits necessary to carry out government intervention must be regarded as perilous. The social function of the doctrine of ‘sound finance’ is to make level of employment dependent on the ‘state of confidence’. …The ‘captains of industry’ would readily find ‘prominent so-called “economic experts” closely connected with banking and industry … to declare that the situation was manifestly unsound’, usually because of some prospect of inflation or the ‘burden’ on the economy of government debt .
In 1945 Kalecki left Britain to work in the International Labour Office in Montreal. In the following year he moved to New York to write economic reports for the United Nations Secretariat. However, with the Cold War, the climate of international relations and economic debate deteriorated, which affected his work in reporting on developments in the communist bloc. In 1955 he resigned from the UN and returned to Poland, where he advised the government on economic planning. Kalecki could not but be deeply critical of the way in which full employment was now being secured in the United States and other capitalist countries by increasing arms production and sabre-rattling in the international sphere to justify that industry. He called it ‘military Keynesianism’ and pointed out that the high employment it created was at the expense of consumption and technological backwardness. It was no coincidence that technological leadership in the post-war period was achieved by Japan and Germany, the two countries that were forbidden by the settlements at the end of World War II from reconstructing their arms industries. Countries that could reach high levels of employment by producing and selling arms were less likely to improve industries that were more focused on civilian needs .
In the 1960, as the scale of the American intervention in Vietnam increased, so too did Kalecki’s criticism of the US government’s equivocations over employment and social policy. In one comment characteristically entitled ‘The Fascism of Our Times’, he pointed out that a new business elite, devoted to laissez-faire and small government, was seeking to push back the reforms of the New Deal and the growing support of the Kennedy and Johnson administrations for the American civil rights movement. He saw the Warren Commission enquiry into the assassination of Kennedy as a missed opportunity to deal with the right-wing extremism that he believed was behind the assassination . In 1967, he noted that the US was undergoing a full-scale armaments boom, counterbalancing the easing in private-sector investment: It is military expenditures that now become the motive force of the business upswing as they increase… The increase in military expenditure constitutes one-half of the increase of national product… To sum up, a typical war (or semi-war) boom started only in the second half of 1966 .
Kalecki detected among members of the ‘old’ business elite a certain embarrassment at the Vietnam War, as it contributed to a decline in US influence in Europe where the older elite had business interests. The American labour movement was largely quiescent and satisfied with the growing employment and real wages. The anti-war movement was active in the universities. But Kalecki noted that intellectual groups represented: …a rather thin stratum of society in the USA without much political weight. It is possible that this awakening of the intelligentsia is important for US political developments in the longer run, but it cannot have a major significance for stopping the war in Vietnam.
He considered the possibility that: …groups of ‘old’ big business associated with the East coast might play a role in the war in Vietnam comparable to that which de Gaulle played in terminating the Algerian war.
He thought that this might happen through a re-opening of the Warren Commission investigation into the murder of President Kennedy: Such an inquiry might establish the links between the ‘predatory’ groups of big business and the scheme for the murder of Kennedy and thus compromise the present administration [of Lyndon Johnson]. In the atmosphere of this terrific scandal it might be possible to achieve the acceptance of the U Thant appeal for stopping the bombing of North Vietnam, for an armistice in South Vietnam, and for a start of negotiations with the Vietcong. It is a sad world indeed where the fate of all mankind depends upon the fight between two competing groups within American big business… many far-reaching upheavals in human history started from a cleavage at the top of the ruling class .
In the following year, 1968, Kalecki and his circle fell victim to factional infighting within the Polish ruling party, to which he had never belonged. The infighting gave rise to a purge of Jewish survivors of World War II, who were by then concentrated in the professions and the upper reaches of the Polish establishment, since most Jews who had not secured professional employment after the Holocaust had left for Israel after 1948. Kalecki was already in poor health. He resigned his government position in solidarity with his colleagues and fellow-citizens of Jewish descent. In 1969 he made one last visit to Cambridge, England, where three decades earlier he had worked with Keynes. He died in the following year.
Populism: a brief conclusion
American populism dates back to the economic depression that followed the Reconstruction, and to the failure of the economy to improve the farmers’ and urban workers’ economic and social conditions. The new corporations promised to revive industrial prosperity, but enriched mostly their owners and the bureaucrats who ran those corporations. However, American populism differed from European populism due to the different economic and social circumstances. American populism was more urban, and this feature points the way to 21st-century populism, in which the decline in industry coupled with the rise of cosmopolitan finance represents a totemic force. There is a visible link between the power of international corporations, the worsening conditions of employment and economic stagnation, but it remains an enigma as long as the ‘impersonal forces’ responsible for successive economic cycles remain hidden behind the everyday routine of the markets and financial transactions.
Populism resolves this enigma by resorting to pamphleteering and accusation: the world of finance is speculation and fraud rather than decent production and prosperity, and the political organization of financial interests is seen as a conspiracy, views that happen to correspond with those held by Hobson and Polanyi on international finance. The notion of conspiracy becomes a way not only of setting aside inconsistencies in our perception of the surrounding reality (such as the relatively educated, liberal, and philanthropic display in Wall Street compared with the coarse nepotism and corruption of the American president), but also a means of combating those conspiracies that threaten us. The current populism promotes social and cultural solidarity as a way of overcoming our oppressors. This is very apparent today in Poland’s reverence for its World War II resistance movement, when the nation conspired against foreign invaders. In the intervening years those invaders supposedly retained their powers through further conspiracies, extending their hostile influence to the European Union and other international agencies. The problem is that laying bare the oppressors’ alleged conspiracy allows us to find the enemy, but not the reasons for the people’s poor economic and social conditions. That is because those reasons lie in the ‘impersonal’ economic ebbs and flows that the Polish economist Michał Kalecki analysed so perceptively.
Jan Toporowski is Professor of Economics and Finance at the School of Oriental and African Studies, University of London; Visiting Professor of Economics at the University of Bergamo, Italy; and Professor of Economics and Finance at International University College, Turin, Italy. He is a Consultant to the UN Development Programme (UNDP), the UN Conference on Trade and Development (UNCTAD), and the United Nations Economic Commission for Africa. Jan Toporowski is a member of the editorial boards of Review of Political Economy (New York); Journal of Post-Keynesian Economics; Ekonomista; Review of Keynesian Economics; Investigación Económica (Mexico); Gentes & Nationes Studia z zakresu spraw międzynarodowych (Poland). He is also a member of the Economic and Social Research Council’s Panel of Referees on Financial Economics, and an adviser to the National Research Foundation of South Africa and to the Grant Review Committee of the Ministero dell’Istruzione, dell’Università e della Ricerca (Italy).
 Tadeusz Kowalik Róża Luksemburg. Teoria akumulacji i imperializmu, Warsaw: Książka i Prasa 2012, p. 239 Rosa Luxemburg. Theory of Accumulation and Imperialism trans. and ed. by Jan Toporowski and Hanna Szymborska, Basingstoke: Palgrave Macmillan 2014, p. 132.
 Official Proceedings of the Democratic National Convention Held in Chicago, Illinois, July 7, 8, 9, 10, and 11, 1896, (Logansport, Indiana, 1896), 226–234. Reprinted in The Annals of America, Vol. 12, 1895–1904: Populism, Imperialism, and Reform (Chicago: Encyclopaedia Britannica, Inc., 1968), pp. 100–105.
 Veblen, T. (1899) The Theory of the Leisure Class: An Economic Study of Institutions, New York: The Macmillan Company.
 Veblen, T. (1904) The Theory of Business Enterprise, New York: Charles Scribner’s Sons.
 Fisher, I. (1933) ‘The Debt-deflation Theory of Great Depressions’, Econometrica, Vol. 1, No. 4, October, pp. 337–57.
 Hobson, J.A. (1902) Imperialism: A Study London: James Nisbet & Co.; Polanyi, K. (1944) The Great Transformation, New York: Farrar & Rinehart Inc.
 Hilferding, R. (1910/1981) Finance Capital: A study of the latest phase of capitalist development, London: Routledge and Kegan Paul.
 Kowalik, T. (1959) O Ludwiku Krzywickim Studium Społeczno-Ekonomiczne (Ludwik Krzywicki a Socio-Economic Study) Warsaw: Państwowe Wydawnictwo Naukowe, 1959, p. 233.
 Kalecki, M. (1932) ‘Ivar Kreuger’ Przegląd Socjalistyczny 2/9, pp. 5-6.
 ‘The Match King’ (2007) The Economist 22 December, pp. 113-115.
 R. Skidelsky (1992) John Maynard Keynes. Vol. 2: The Economist as Saviour 1920-1937, London: Macmillan, p. 435.
 J.M. Keynes (1982) The Collected Writings of John Maynard Keynes. Vol. 21: Activities 1931-1939 World Crises and Policies in Britain and America, London: Macmillan, p. 90.
 Ibid. p. 93.
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