The screenshot below is of a passage in a chapter written by Susanne Lohmann, a top UCLA political scientist, in the Oxford Handbook of Political Economy, which is edited by Barry Weingast, an even more senior political scientist at Stanford.

Two things of note.

First, Lohmann claims that the Yale economist William Nordhaus coined the phrase “political business cycle” in 1975. That’s untrue. As Nordhaus himself acknowledges in his 1975 article, it was in fact the Polish Marxist economist Michał Kalecki who formulated the phrase, in 1943, in his article “Political Aspects of Full Employment.”

But, second, by mistaking the authorship of the “political business cycle” idea, Lohmann erases its original meaning, or even the fact that it ever had a different meaning.

Though political scientists and economists are notoriously indifferent to the histories of their discipline and its ideas, sometimes the history of a concept really does matter.

When Kalecki coined the phrase “political business cycle,” he was referring to the power that investors and employers—the business class or the capitalist class—have to squelch full-employment policies. In Kalecki’s story, Keynesian liberals and social democrats believed they could use deficit spending and low interest rates to maintain a full-employment economy, thereby permanently eliminate the shock and horror of mass unemployment, which haunts the opening chapter of Keynes’s General Theory.

But Kalecki claims the Keynesians are wrong. During deep slumps, the business class might tolerate some public spending to goose demand, but as soon as the economy starts moving, they’ll create a panic around deficit spending. Why?

Because they believe, with some cause, that if workers know that they can quit or be fired from a job and easily find another one, they’ll start to get uppity. They won’t fear “the sack.” They’ll complain, talk back, strike. Businessmen are far more terrified of losing control of the workforce than they are of economic contraction, even if that means lower profits for them.

At opportune moments, then, the capitalist class will use a couple of well heeled economists to stir up anxiety around deficits; well placed representatives of business in the government will turn that anxiety into an argument for austerity, that is, cutting spending. Which the government, terrified of losing the “confidence” of the business class, will do. That’s the political business cycle. Sound familiar?

Despite the moral and political advances of Keynesianism as a matter of public policy, Kalecki is arguing that the capitalist class can use the political business cycle to prevent full employment and suppress wages, returning us effectively to the situation of the nineteeth-century business cycle, when slumps and depressions reversed whatever gains workers had made during the good years of plenty.

The point of the phrase “political business cycle,” in other words, is to demonstrate the persistent power of the capitalist class, even in a liberal or social democratic regime.

By the time we get to The Oxford Handbook of Political Economy, that idea has been erased. Now it is recast to mean—in fact, it is claimed, has always meant—that whichever political party is in power, it will, come election time, fiddle with the money supply to increase jobs and get reelected. It’s a story about party competition during election years, in other words, not class power in the welfare state.

The question is not even, which of these two versions of the political business cycle is more enduring and better captures our reality? To me, it’s obvious that Kalecki has the more important and enduring story. The real issue is that, according to the Oxford Handbook of Political Economy, there’s pretty much only one definition of the political business cycle, and it can be traced back to an economist’s article in 1975—which was, in fact, arguing against the position of another economist, but you wouldn’t know that from the Oxford Handbook of Political Economy.