Louis Proyect: The Unrepentant Marxist

July 18, 2011

Marxism and Keynesianism

Filed under: economics — louisproyect @ 4:38 pm

Over the past month, the Crooked Timber blog (referred to below as CT) has posted three attacks on Marxism by John Quiggin, an Australian economist who I have a particular distaste for after he deleted something I wrote about Yugoslavia that went against the liberal/social democratic orientation of the blog’s professorial co-owners five years ago.

The first installment was titled Marxism without revolution: class that makes about as much sense as writing about Christianity without god or Opera without singing. It is basically a Panglossian vision of the world in tune with the privileged status of a don: “The creation of a democratic welfare state, funded primarily by progressive taxation, produced societies with a more equal distribution of economic and political power than any seen since the emergence of agriculture, and with better standards of living for virtually everyone in the developed world.” Who needs revolution when things are going so good? Since Quiggin has never written a single word about people living in places like the Congo or the Philippines, one can understand his fat and jolly burgher stance.

The next was titled Marxism without revolution: crisis. In it he accuses Marxists of being incapable of offering proposals that can “stabilise the capitalist economy.” Well, fancy that. By contrast, Quiggin offers up Keynesianism as just the ticket: “I read the historical evidence as showing that the system can and should be stabilised to a significant extent, as was done during the postwar decades, using Keynesian macroeconomic policies and tight regulation of the financial system.” Of course, the question of what Keynesianism can offer those underdeveloped countries that play such a secondary role in his ideological worldview is never considered. More about that anon.

The last was titled Marxism without revolution: Capital. It is perhaps the 2000th attempt to dismiss the labor theory of value that is the foundation for Marx’s analysis of politics and much else. There’s not a single thing that Quiggin writes that hasn’t already been written before, starting with Eugen Bohm-Bawerk’s 1896 Karl Marx and the Close of His System. The never-ending assault on the labor theory of value reminds me of the tale of the princess and the pea. Like the pea that is Marxism concealed under a dozen thick mattresses, princesses like Quiggin are so irritated by the thing jabbing at their ribs that they cannot get a proper night’s sleep.

Just to make sure that his readers get his point, Quiggin throws in another tidbit titled You say you want a revolution  that opines “Most attempts at revolution fail, leaving the participants and the oppressed worse off than before.” The article unsurprisingly does not refer to the role of imperialist armies in making them fail. Of course, given Quiggin’s record on Yugoslavia, we must assume that he saw NATO as freedom fighters when they were raining uranium-tipped bombs on the dastardly Serbs.

Quiggin’s thoughts are exceedingly banal and hardly worth commenting on, but the most recent item on Marxism at CT does deserve some attention. It is a link to an article titled Zombie Marx by Mike Beggs  that appears in the latest issue of Jacobin, a print quarterly edited by Bhaskar Sunkara, a DSA’er who was subbed to the Marxism mailing list briefly. CT excerpts a Joan Robinson article titled Open Letter from a Keynesian to a Marxist that Mike Beggs considered as complementary to his own article, stating that he “would rather have the kind of Marx in Joan Robinson’s bones than either a Frankenstein Marx pieced together from scraps of quotations, or a Zombie Marx, embalmed in the 1860s and reanimated whole.”

It is a bit difficult figuring out what this “embalmed” version of Marxism amounts to. Beggs doesn’t appear to appreciate what economist Andrew Kliman (a member of a tiny sect grouped around the thoughts of Raya Dunayevskaya) is up to:

But in each generation, there are others who have defended an “orthodox” Marxian economics as a separate and superior paradigm, which can only be contaminated by absorbing ideas from elsewhere. The pugnacious Andrew Kliman, for example, opens his Reclaiming Marx’s Capital with the line “The economists have changed Marx, in various ways; the point is to interpret him – correctly.”

Kliman certainly is a piece of work. A one-time member of a listserv established to “discuss controversial issues in political economy”, he was so volatile over interpretations of the LTV that differed from his own that the moderator was forced to unsub him. He was also involved in some legal action against a journal put out by the URPE collective after they rejected one of his submissions.

But Beggs doesn’t even have Kliman in mind. He writes:

What I call Zombie Marx is different – the reanimation of a corpse which still holds organically together in some way. This is the reconstruction of Marxist economics as a coherent body of thought, not a collection of quotations. … It is unfair to single out Marxists. Rather, it is scholasticism that is the problem – the need to ground everything in a 140-year-old text. It would be wrong to say that the likes of Kliman are dogmatic in the sense that they demand unthinking acceptance of everything in Capital – it is obviously a lot of intellectual hard work to “interpret Marx correctly.” It cannot be taken for granted that Marx was right; it must be proven anew with each generation, against both rival interpretations and the revisions the previous generation had found necessary to make.

I understand Beggs’s unwillingness to name names, but without an example of what he is talking about when it comes to “Zombie Marx”, I remain somewhat at a loss to understand what the problem is. Ultimately we have to rely on his own approach to Karl Marx’s writings that sounds okay, as far as it goes.

Mostly Beggs has an aversion to the kind of Talmudic-like exegesis of Karl Marx’s Capital that Kliman engages in. Others more prominent than Kliman are guilty, including David Harvey who Beggs describes as being susceptible to the same tendencies, relieved however by his “empiricism”. Beggs does not seem to mind if Marxist economists ground themselves on Marx’s Capital as long as they stay true to the underlying goals of Marx’s work, which is to “demonstrate the social preconditions that lie beneath the concepts of political economy, and especially their dependence on class relationships; and second, to demonstrate these social relations as historical, not eternal.”

It is a bit harder to figure out what Beggs thinks about the labor theory of value since his article is so heavily qualified when it comes to this business:

But the labor theory of value had problems of its own, most prominently the awkwardness involved in modifying labor values to take account of differences in capital intensity. Both Ricardo and Marx were well aware of the problem, but it is hard to avoid seeing Marx’s “transformation” solution as ad hoc in the manner of Ptolemy’s epicycles, even if put in a logically coherent form.

Ptolemy, just to remind you in case you had forgotten, wrote that the Sun revolved around the earth. I don’t think that Beggs finds Marx as outdated as Ptolemy but you have to assume that Joan Robinson’s wholesale rejection of the labor theory of value must have recommended itself to him sufficiently to state at the very end of his article: “As undead Marxes go, I would rather have the kind of Marx in Joan Robinson’s bones than either a Frankenstein Marx pieced together from scraps of quotations, or a Zombie Marx, embalmed in the 1860s and reanimated whole. That is a spirit that might haunt again.”

This brings me to my own take on such matters, which comes at things at a totally different angle. As I alluded to above, Keynesian economics makes very little sense outside of the framework of countries like Britain, the USA, Germany and Japan that are heavily based on manufacturing and that are capable of launching the kinds of ambitious programs that were identified with Roosevelt’s New Deal, British Labour governments, and the Swedish social democracy. What possible relevance do they have to countries that are not suffering from some downturn in the business cycle but a permanent structural weakness that is related to their place in the global economy? For example, what role could deficit spending play in a nation like Malawi or Zambia, where agriculture or mining are the primary revenue generators? Such nations will never escape from the poverty trap unless they free themselves from foreign domination and begin producing for human need rather than private profit. They will not become prosperous in Western European terms, no matter what propaganda Thomas Friedman writes, but at least they will be able to provide the basic necessities of life for its citizens, as Cuba has done despite embargo and military interventions from the “democracies”.

To go one step further, there is not much in Marx’s Capital that directly relates to the problems of countries like Malawi or Zambia. Marx was trying to analyze the origins of the prototypical capitalist society in writing about Britain, as well as illustrating the fundamental class relations embodied in the formula M-C-M’. As a sign of how insufficiently engaged he was in the problems of a nascent imperialism when he wrote Capital, just look at the preface to V. 1: “The country that is more developed industrially only shows to the less developed, the image of its own future.”

It was only toward the end of his life that Marx rejected this notion, seeing Britain’s role in India as one of “larceny”.

As someone who has a great deal of respect for Joan Robinson and even someone who questions the value of abstruse discussions of the labor theory of value (when I first came across the abbreviation LTV on the Internet in the early 90s, I could not figure out why some leftists were so exercised about the aircraft company Ling-Temco-Vought), I want to conclude with some thoughts on one of her most famous dictums.

In chapter 2 of her “Economic Philosophy,” she wrote:”As we see nowadays in South-East Asia or the Caribbean, the misery of being exploited by capitalists is nothing compared to the misery of not being exploited at all.”

Although he did not mention her name, New York Times op-ed columnist Nicholas Kristof repeated her observation in a January 14, 2009 article:

Mr. Obama and the Democrats who favor labor standards in trade agreements mean well, for they intend to fight back at oppressive sweatshops abroad. But while it shocks Americans to hear it, the central challenge in the poorest countries is not that sweatshops exploit too many people, but that they don’t exploit enough.

Fundamental to the Keynesian worldview is the notion that capitalism is dynamic enough of a system that it can generate jobs for everybody, even if they come as a result of imperialist domination. This view was challenged by the Monthly Review dependency theory school that was launched ironically by Paul Sweezy who by all accounts was as much of a Keynesian as he was a Marxist. However, I doubt that he would have ever recommended such policies to the people in Malawi or Zambia, a function of the Marxism that had much more weight in his thinking in the long run.

Finally, a word should be said about his long-time collaborator Harry Magdoff who actually held a post in FDR’s New Deal and who based on such prima facie evidence might have been seen as some kind of Keynesian in his own right. However, the evidence is much to the contrary according to this letter to a contributor that was made public in the January 1998 Monthly Review:

There are two aspects to the faith in what Keynesian interventionism can accomplish. One has to do with moderating or eliminating the business cycle. For this, there has to be confidence in the ability to foretell where and how far the economy is likely to turn. With this knowledge, followed by the requisite changes in monetary and fiscal policies, the business cycle can be tamed and economic insecurity overcome. As it turned out neither of these claims have substance. Forecasting is at best an art, not science, and even as an art, untrustworthy. Moreover, the tinkering with money, interest rates, and federal finance are more often than not lesser influences among the gale-force winds that tear through the economy. I don’t mean that money and fiscal policy are totally unimportant. Money has to be centrally managed for the economy to work. And at times the actions of the monetary authorities can make a real difference. For example, in a society which lives on credit, a sharp rise in the interest rate for the sake of controlling inflation may be able to hold back an inflationary wave, while at the same time causing heavy unemployment and many business failures. In general, the Fed’s fiddling with the money supply and interest rates is mostly a response to the needs of the financial community and has little, if anything, to do with creating jobs and promoting economic growth. The simple refutation about the claims for Keynesian intervention, however, is that there were three recessions during the “golden age.”

Read the letter here http://monthlyreview.org/1998/01/01/a-letter-to-a-contributor


  1. By contrast, Quiggin offers up Keynesianism as just the ticket: “I read the historical evidence as showing that the system can and should be stabilised to a significant extent, as was done during the postwar decades, using Keynesian macroeconomic policies and tight regulation of the financial system.” Of course, the question of what Keynesianism can offer those underdeveloped countries that play such a secondary role in his ideological worldview is never considered. More about that anon.

    The thing about Keynesian remedies is that – while they might be just the ticket to stabilizing advanced capitalist economies – advanced capitalist societies have shown themselves utterly politically incapable of implementing them. Advanced capitalist states have instead made risky bets on austerity.

    This is the real problem with Keynesianism. It is a practical economic solution based on ludicrously unrealistic politics. It’s telling that the only country to successfully implement Keynesianism this cycle is nominally Communist.

    Comment by Felix Sullivan — July 18, 2011 @ 5:07 pm

  2. Like with every capitalist theory of economics, Keynesianism is based on the assumption of limitless growth. The idea is supposed to be that there always exists somewhere in the economy a place where profitable growth can be achieved by an investor who is daring enough. From a Keynesian perspective, the only thing which holds back economic growth is that investors are reluctant to be daring. But if the managers of the monetary system can somehow inject loose cash or credit into the economy then this should lead to a greater willingness by investors to explore the previously untouched possibilities and thereby result in new consumer goods and services appearing on an expanding market.

    Unfortunately, the world economy is reaching its limits rather quickly right now. Before the 1970s economists had maintained that high inflation and high unemployment could not occur simultaneously because a rise in unemployment would undercut consumer purchasing power and thereby force a drop in prices. The 1970s proved this wrong with stagflation, and Keynesianism was at the root of that. Businesses over 25 years had grown used to assuming that the federal government would always attempt to pump money into the economy to offset unemployment. As long as the economy was really growing this was an all right assumption. But when economic saturation hit and businesses began to cut back on jobs they also now began to anticipate an expected increase in the money supply for which they were not prepared to respond by restoring jobs. Consequently, high inflation occurred alongside of high unemployment.

    That stagflation in the 1970s was the decisive failure of Keynesianism, a failure that was centered precisely in the most advanced industrial countries. The subsequent promotion of Milton Friedman’s neoliberal theories of economics came about in response to this recognition by the upper classes that Keynesianism no longer worked. We’ve had attempts to dust off Keynesianism in some intellectual circles since the disaster of the Bush II years. But no politician with real authority is actually attempting to advocate Keynesian solutions. They know that this has already failed.

    Comment by PatrickSMcNally — July 18, 2011 @ 6:11 pm

  3. “This is the real problem with Keynesianism. It is a practical economic solution based on ludicrously unrealistic politics. It’s telling that the only country to successfully implement Keynesianism this cycle is nominally Communist.”

    Meh. You’re right that Keynesian policies are politically contentious: independent monetary authorities were supposed to be a solution, but they have failed to deliver, especially in the US and EU. Nevertheless, Sweden and Australia among others have managed to restore full employment through monetary accommodation. Of course their economies are affected by the worldwide shortfall in AD, but they’re doing just fine domestically.

    Comment by anon — July 18, 2011 @ 6:19 pm

  4. So where would you position Kalecki?

    The Post Keynesian tradition Beggs has in mind is as much Kalecki as Keynes, and Kalecki was very much interested in countries like Malawi and Zambia. There are Kaleckian traditions in India and Latin America. Kalecki was, famously, starting from Marx. Quite a bit of the PK literature can be read as flowing from vols. 2 and 3 of _Capital_.

    What you and commenters are doing is reducing “Keynesianism” to a particular policy approach for a particular milieu. That is indeed the meaning the term has taken on in popular usage, but it’s only one facet of the much larger lit that Beggs is pointing to. It’s not even a good representation of Keynes.

    Comment by Colin Danby — July 18, 2011 @ 7:29 pm

  5. I have never read Kalecki but did read a lengthy article on MRZine (http://mrzine.monthlyreview.org/2011/ghosh270511.html) about his economic strategy for developing countries that revolved around increased agricultural output. Two things should be said. There is nothing particularly “Keynesian” about this. Nor is it particularly effective as my study of Latin America would lead me to believe. The general tendency of agricultural prices in the 20th and 21st century is to decrease, putting countries like Nicaragua or Colombia at a distinct disadvantage. Of course, banana or coffee plantation owners have benefited greatly, as their shopping expeditions to Miami would testify.

    Comment by louisproyect — July 18, 2011 @ 7:43 pm

  6. Kalecki is worth reading, especially the work collected in _Essays on Developing Economies_. He is at least a co-founder of the Post Keynesian school. The Jayati Ghosh piece you link does a very good job on his contributions and place in the history of thought. Malcolm Sawyer’s _Economics of Michal Kalecki_ is a book-length treatment that examines his links to Marx, Keynes, and PK thought. Kalecki was drawn on by Celso Furtado, Juan Noyola, K.N. Raj, and other interesting folks who tried to work out class dynamics in 3rd world settings, in particular monetary and fiscal crises. You *are* quite right that most published Keynesian and PK work in recent decades has been devoted to countries like the U.S., but that’s not the fault of the founders: Robinson, Kaldor, Kalecki et al. were interested in the whole world.

    Again, I’d caution against reducing a thinker like Kalecki, or Keynes, to a “strategy.” People like this are useful because they provide tools for understanding the world. Think of the way Marx used Ricardo, and the distinction he made between Ricardo and lesser thinkers who shared Ricardo’s politics, but not his insight. It might be convenient for any number of purposes to draw a bright line between bourgeois and Marxist economics, but I don’t think you can do it.

    Comment by Colin Danby — July 18, 2011 @ 10:39 pm

  7. […] Lea completo “Marxism and Keynesianism” en el blog: […]

    Pingback by Marxismo y keynesianismo « Econo Marx 21 — July 19, 2011 @ 2:00 am

  8. Regarding developing countries: South Korea and Taiwan are two who were as poor as any place in the world in 1950, and now have per capita incomes on par with an Italy or Spain. Though this may be due to their strategic significance for the U.S., as bulwarks against Red China, etc. and the resulting export policies the US allowed them. But South Korea is particularly notable due to its long historical status as a colonized country. Overall, the East Asian development model has produced rather stunning results and continues to do so in more and more Asian countries, even as Western economists continue to preach of its impending collapse due to heavy state subsidy of industry and protection of domestic banking. It is only in an Asian countries that have followed IMF dictates, such as the Philippines, that living standards remain stagnant. In 1950 the Philippines was far wealthier than South Korea.

    Comment by purple — July 19, 2011 @ 5:15 am

  9. The contradiction with capitalism is that it is driven to overproduce in order to overcome the tendency of the rate of profit to decline (that is the Marxist LTV) but the bourgeoisie were bound to interpret the problem not as a fundamental but as a technical one. If they had not they would have had to have admitted their historical contingency and removed themselves from the historical stage without to much fuss. The technical dismal bourgeois response to the death of capitalism is Keynesianism. Underconsumption is the problem for this approach not overproduction therefore simply redistribute some of the super profits of the monopolies into expanding production by increasing purchasing power. By the late 70s the strategy had failed, containment of socialism even with the help of Stalinism was costing too much and things could not go on as they had been but the belligerent monetarists Reagan and Thatcher far from being anti-Keynes simply privatised the process. States were no longer trusted to control the money supply because they were bound to use it for populist political ends with inflationary consequences. Private interests would create credit sensibly due to enlightened self interest. They didn’t of course even if Greenspan still can’t believe it. They created trillions of worthless bits of paper all with a claim to social wealth which doesn’t exist in those quantities and that is why the West is now bankrupt and why the struggle over those bits of paper are accelerating the class struggle to a definitive conclusion one way or the other. Thanks to Keynesianism this crisis of capitalism is global, existential, fatal and final. There are no more technical fixes just a straight fight.

    Comment by David Ellis — July 19, 2011 @ 5:23 am

  10. If you have the gastric fortitude, here’s Quiggan pontificating on why economists recognise that market based mechanisms are the only solution to climate change: http://www.abc.net.au/unleashed/2795102.html

    Comment by Ernie — July 19, 2011 @ 6:51 am

  11. Hi Louis,

    Thanks very much for your response. You’re right that I’m not willing to name any more names than I have to, because I don’t want to give unnecessary offense. I might as well name myself, because I’ve often found myself drawing to arguing points of interpretation rather than analysis, and I wrote the piece to try to shake that off. It’s a structural hazard of Marxism, I think, for reasons I talk about in the piece, rather than something I want to blame individuals for. I should be clear that I’m not calling anyone brain-dead: the zombie is the raised corpse of Capital itself.

    My point is simply the historical materialist one that it was a product of its time and place, and in trying to resurrect it intact, as a whole, people are often defending a lot of 19th century political economy rather than any particularly radical critique of it. The ‘labour theory of value’ is a case in point: it was a Ricardian thing that Marx pointed beyond, but now the LTV is taken in many circles as a precious heirloom of Marxism to be defended at all costs. I think my argument is similar in spirit to the argument you have made over the years about the fossilisation of a certain mythological Leninism.

    I would hate to think anyone reads my piece and pulls out of their Capital reading group or stops watching David Harvey lectures on YouTube. That’s not my point at all. As for Harvey, I hope my piece makes it clear that I have the highest respect for him; few people have been more influential on me and he is an immensely creative thinker. I just felt I had to deal with the project of reviving a ready-made Capital at its best as well as its worst, or the criticism would be too easy.

    Mike Beggs

    Comment by mikebeggs — July 19, 2011 @ 7:15 am

  12. For those of you interested in the Keynesian-Marx economics’ connection, I recommend the work of Jim Crotty (http://people.umass.edu/crotty/index.html).

    Comment by Ian J. Seda-Irizarry — July 19, 2011 @ 9:31 am

  13. Quiggin swung past our blog to announce his three-part series on Marxism, and was straight away lecturing us that the Egyptian events can’t possibly get beyond narrow liberal democratic limits, so we probably should’ve expected the worst. We replied to him here and here (plenty of snarky comments from Quiggin underneath — unlike his polite engagement with neoclassical loons, he seems to see Marxism as the kind of theory that one simply insults or reconstructs into straw men to dismiss).

    On Mike Beggs… Mike is a friend and I heard a version of his paper at the recent “Capital Against Capitalism” conference here in Sydney. We’re having part of this discussion via email, but I think the issue is that he makes too much of some of the partial insights of neoclassical economists. Yes, they have some insights, but they are tied up with a wider approach towards social analysis the role of which is to mystify “the social preconditions that lie beneath the concepts of political economy, and especially their dependence on class relationships”. All ideologies need to have some basis in reality to function effectively… but I find it hard to pay Mike’s claims that neoclassical ideologies are particularly sophisticated or close to describing real social processes in anything other than a very narrow manner, and from a very particular class interest.

    Comment by Dr_Tad — July 19, 2011 @ 11:36 am

  14. I found the Beggs piece sympathetic, but still wonder what is the point of saying, “stop being so Talmudic in your reading of Marx”. Let’s face it, it feels like the argument of a sect within a sect within a sect. I can only compare all of this to Austrian economics, which I have a bizarre masochist obsession with right now. Those people thump dead economists from the late 19th and early 20th century (Bohm-Bawerk, already mentioned, Mises, Hayek, Rothbard, etc.). They seem way more dogmatic at times than Marxists. But the difference is deep pockets. They can afford to be dogmatic since they have an exceptionally large bullhorn. Glenn Beck pushes Hayek’s The Road to Serfdom on his show, and little bookstores in Mississippi stock it. Try finding Marx’s Capital in a small town bookstore. How are people supposed to “update Marx” if they haven’t even read him? And I am not saying that he doesn’t need to be updated, or that Capital is biblically infallible. Marx published only the first volume in his lifetime, and the other two volumes were pieced together from his notes. And the schema of the original was supposed to be longer than that. It just seems that, post Marx, there is no great, undisputed scholar who took up the work. And movements need that. Because in the end, we can lament how lame Marxists are in academic terms, but we risk fetishizing the importance of the bourgeois academy in all of this. They don’t know the answer or we wouldn’t be in this crisis in the first place.

    The real problem in my view is not the lack of academic street cred. The real problem is that the best and the brightest of this generation are not looking for alternatives to capitalism, as they were, say, in pre-World War I Europe. How did members of the bourgeoisie and petit-bourgeoisie, such as Lenin, Trotsky. Rosa Luxemburg, Jose Carlos Mariategui, Antonio Gramsci, etc. decide to take the hard, up-hill road to socialist revolution instead of becoming shills for the ruling class? Why were some of the brightest minds engaged in overthrowing the social order rather than enriching themselves off of it? Perhaps they thought that the only way to make any progress in society, the only way to have a society that lived up to its own ideals, was to overturn the social order through popular yet violent means. That particular idea is no longer popular save for the readers of leftwing websites. People still think you can try to fix the system, that there is nothing fundamentally wrong with it, that we can still tweek it, etc. That is why I don’t think I will see a movement to overthrow capitalism in my lifetime, or maybe well into middle age (I am in my early 30’s). The best of the younger generations are going to have to figure out that the system doesn’t work, and they are going to make lots of mistakes in the process. The question is, do we have that long? I think that while it is important not to get hung up in rabbinic interpretations of old texts, we also have to remember that our argument is with the masses and not with bourgeois economists. The engagement is with history and not the academy, and we have to remember that the academy is often the problem and not the solution, pace whatever those who make their money off of tenured academic positions think.

    Comment by El pelón — July 19, 2011 @ 11:45 am

  15. Mike Beggs hi,

    Whilst you are here, could you explain why you think Marx’s labour theory of value that the less socially necessary labour time contained within a commodity the less exchange value it has was right then but wrong now?

    Comment by David Ellis — July 19, 2011 @ 12:32 pm

  16. Hi David,

    Sorry for the delayed response, I hope you are subscribing to the thread. It’s not my view that it was “right then but wrong now”. It’s more that I think the Ricardian theory of value, which Marx developed, was a theoretical advance over Smith, but one which needed (needs?) to be advanced beyond in turn. It’s an advance over Smith because it recognised explicitly the interdependence between wage and profit determination, as opposed to Smith’s ‘adding up’ theory, in which wages and profits are determined separately and added up to determine price (the role of rent is a little more complex). It needed to be advanced beyond because, as both Ricardo and Marx acknowledged, goods do not in fact tend to exchange in proportion to the labour times necessary for their production, primarily because of different outlays of capital. Both their adjustments are problematic, even if they can be put in a logically coherent form, because of the awkward step-wise development – first labour values are worked out, then adjusted to take compositions of capital into account. Also they are long-period theories which needed to be better integrated with their theories of short-run dynamics.


    Comment by Mike Beggs — July 29, 2011 @ 1:17 am

  17. At: http://mrzine.monthlyreview.org/2010/sweezy110610.html
    there is an interesting interview with Paul Sweezy concerning Keynes and Keynesianism. Among other things, Sweezy made the point that we should not fall into the trap of identifying Keynesianism with a narrow set of economic policies – Keynes’s approach to economics was far broader than that. In the interview Sweezy also made clear his great respect for Joan Robinson, whom we might point out often wrote for Monthly Review in her later years. As Sweezy out, she was not just a left Keynesian, she was in fact to the left of many people who called themselves Marxists, a fact which no doubt explains why she never won the Nobel Prize in Economics, despite the fact that she had under her belt a body of work in technical economics (i.e. her work on imperfect competition in the 1930s or her treatments of capital theory in the 1960s), which, if it had been produced by almost any other economist, would have resulted in that economist winning the Prize.

    Comment by Jim Farmelant — August 7, 2011 @ 2:43 am

  18. In 1980, Joan Robinson commented on the poverty of economics but only sketched a solution.

    “After the Second World War, the baton of leadership in teaching economics, along with leadership in the capitalist world, passed to the USA. Instead of meeting the challenge of the Keynesian revolution head on, the profession in the USA split the subject into two parts, macro and micro. In the macro section it was permissible to contemplate fluctuations in employment and even to hint at remedies for a deficiency in effective demand, while micro theory returned to the analysis of equilibrium established by the free play of market forces. Keynesian ideas were allowed a certain sphere of operation while the central doctrine was safely walled off from them.[…]”

    “The whole subject [of inequality] is so embarrassing that in fact it is scarcely mentioned. There is no treatment at all of the determination of the distribution of income in orthodox teaching, and precious little about its consequences. What to the general public appears one of the most interesting of all questions in economics is simply left out of the syllabus.”

    “In its general influence on educated public opinion, orthodox teaching has been not merely feeble and confused but positively pernicious. It gives support to the view that expenditure by a government that is beneficial to the inhabitants of its territory is ‘socialism’ and must be prevented at all costs. This reconciles an otherwise more or less sane and benevolent public opinion to the arms race which seems to be dragging us all to destruction. But that is another story.”

    “It seems to me that the whole complex of theories and models in the textbooks is in need of a thorough spring cleaning. We should throw out all self-contradictory propositions, unmeasurable quantities and indefinable concepts and reconstruct a logical basis for analysis with what, if anything, remains.”

    From the essay “The theory of normal prices and reconstruction of economic theory” published in Issues in contemporary macroeconomics and distribution edited by George R. Feiwel.

    Comment by Aaron — January 5, 2012 @ 5:28 pm

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