I know that I’m not as smart as Jacob Viner, so I’m guessing that I’m missing something in his criticism of JM Keynes’ General Theory. According to Viner, “Keynes’s reasoning points obviously to the superiority or inflationary remedies for unemployment over money wage reductions. In a world organized in accordance with Keynes’s specifications there would be a constant race between the printing press and the business agents of the trade unions, with the problem of unemployment largely solved if the printing press could maintain a constant lead and if only volume of employment, irrespective of quality, is considered important.”
Although I don’t have my GT here in Venasque, my recollection is that (1) printing presses were irrelevant since expectations of future returns arising out of future consumption and production would mean that current spending during a period of high unemployment would prove but a fraction of future receipts; and (2) because upward pressures on wages would also be suppressed only under conditions of increased purchasing power, ie, increased spending that yields increased production. Viner’s response seems based on the hypothetical of full employment.
Now that isn’t to suggest that full employment and full production capacity may not pose additional problems.