ABSTRACT
The real differences between John Maynard Keynes and K. Marx appear when it comes to the question of prescription for the ills of capitalism. For Marx, it is inevitable that capitalism must invest in labour-saving machinery, displacing workers, since the conditions of capitalist production make this the only way to stay competitive. His first explanation was that a high organic composition of capital had tendencies towards a falling rate of profit; his second explanation was that capitalism tended towards ever worsening crises based on overproduction and underconsumption leading to a fall in the rate of profit. Some of the warning shots that Galbraith sounded about Keynesianism in 1958 did indeed come to fruition: the inflationary pressures, public borrowing, easy credit and an "over-generous money supply". Keynesianism was bound to be inflationary, since operating the economy at full employment would produce both demand-pull and cost-push inflation, especially when conjoined with strong unions and the security blanket of a strong welfare state.
