Abstract
No positive economic doctrine has been able until now to escape from the trap of being valid only under very specific conditions, so special as not to be replicated even minimally in actual historical experience. Consider the two fundamental approaches of the 19th century: the Marxian and the Neoclassical one. They both attempt to tell a story about the long-term behaviour of the system. The former tries to identify objective laws of motion, the latter some kind of immanent behaviour to be taken as a normative reference for a real system. They both fail encountering similar analytical problems. In particular, the long-term validity of both approaches depends heavily on the homogeneous nature of the economy they depict.1 Marx’s long-term theory of capitalist accumulation is not free from the scourge of homogeneity either (see Appendix). Indeed I believe that there are in Marx two distinct and non-compatible macroeconomic theories. The first, of a Ricardian nature, is to be found in Volume One of Capital and culminates in the well known chapter (25) on the Reserve Army of Labour. Its essential elements are reproduced in Wage Price and Profit, a fact that has some importance. Wage Price and Profit is Marx’s speech at the founding meeting of the First International. It can, therefore, be viewed as expressing his core thoughts when economic statements had to be stripped down to their essential points. The second approach is contained in Volume Two of Capital, largely put together by Engels, which gave rise to the most far reaching set of economic debates within the Second International.
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Notes
See Joseph Halevi and Peter Kriesler “Marx or Hicks? Structural proportions and crisis: the transition from the First to the Third Volume of Capital”, in Marxian Economics: A Reappraisal: Essays On Volume III of “Capital” Vol 2. edited by Riccardo Bellofiore. New York: St. Martin’s Press, 1998, Vol 2.
Still unsurpassed is the discussion of that debate by Paul Sweezy in his celebrated Theory of Capitalist Development, New York: Monthly Review Press, 1968; originally published in 1942. The best collection of most of the original texts is due toe Lucio Colletti and Claudio Napoleoni (eds.), Il futuro del capitalismo: crollo o sviluppo? (The Future of Capitalism: Breakdown or Growth?), Bari: Laterza, 1970.
Joseph Schumpeter, “The Instability of Capitalism”, The Economic Journal, Vol. 38, No. 151. (Sep., 1928), pp. 361–386.
See Michał Kalecki, “The Influence of Cartelization on the Business Cycle”, in Collected works of Michał Kalecki 1990–1997, Vol. 1 edited by Jerzy Osiatynski; translated by Chester Adam Kisiel. Oxford; New York; Toronto and Melbourne: Oxford University Press, Clarendon Press, (Part 2). Originally published in 1932 in the Polish Journal Socialist Review.
Michał Kalecki, “Is a ‘Capitalist’ Overcoming of the Crisis Possible?” in Collected works of Michał Kalecki 1990–1997, Vol. 1 edited by Jerzy Osiatynski; translated by Chester Adam Kisiel. Oxford; New York; Toronto and Melbourne: Oxford University Press, Clarendon Press, (Part 2).
Michał Kalecki, Tadeusz Kowalik, “Observations on the ‘Crucial Reform’” in Collected Works of Michał Kalecki. Volume 2: Capitalism: Economic Dynamics. Edited by Jerzy Osiatynski. Translated by Chester Adam Kisiel. Oxford; New York; Toronto and Melbourne: Oxford University Press, Clarendon Press. p. 467–76. 1991. Previously Published: 1971.
Nicholas Kaldor. “Stability and Full Employment”, The Economic Journal, Vol. 48, no. 192 (December, 1938), p. 653.
From a non-Marxian, but quite structural, perspective — although couched in Cassellian terms — a good antidote to Kaldor’s 1956 is the paper by Masao Fukuoka, “Full Employment with Constant Coefficients of Production”, Quarterly Journal of Economics, Vol. 69, no. 1 (February, 1955).
The first 1956 paper by Kaldor is the well-known “Alternative Theories of Distribution”, Review of Economic Studies, Vol. 23, No. 2, 1955–56, pp. 83–100.
Nicholas Kaldor. “Capitalist Evolution in the Light of Keynesian Economics”, in Essays on Economic Stability and Growth Nicholas Kaldor, London: Duckworth, 1960, pp. 243–58.
The set of quotations is taken from Nicholas Kaldor, “Economic Growth and the Problem of Inflation”, in Essays On Economic Policy I Nicholas Kaldor, New York: Holmes & Meier, 1980, pp. 169–70. Originally published in Economica August 1959.
The story no longer works if many sectors or many firms are considered. G.C. Harcourt, “Acritique of Mr Kaldor’s model of income distribution and economic growth”, Australian Economic Papers, Vol. 2, no. 1, June 1963, pp. 20–36;
Joseph Halevi, “Capital and Growth: Its Relevance as a Critique of Neoclassical and Classical Economic Theories”, Indian Journal of Applied Economics — Special Issue in the Respectful Memory of John Hicks, Vol. 7, No. 4, October–December 2001, pp. 79–98.
The U.S. Economy in the 1950s Harold Vatter, New York: Norton, 1963.
Causes of Growth and Stagnation in the World Economy Nicholas Kaldor. New York: Cambridge University Press, 1996.
In the end this is the view held by most post-Keynesians also by those who take a Kaleckian perspective on mark-up pricing: Economic Breakdown & Recovery: Theory And Policy John Cornwall; with a foreword by David Colander. Armonk, N.Y.: M.E. Sharpe, 1994.
General Theory Of The Price Level, Output, Income Distribution, And Economic Growth Sidney Weintraub. Philadelphia: Chilton Co., Book Division, 1959.
Michał Kalecki “Observations on the Theory of Growth”, Economic Journal, March 1962.
Paul Sweezy, “A Crucial Difference Between Capitalism and Socialism”, in Past and Present Paul Sweezy. New York: Monthly Review Press 1953. Reprinted in Marx and Modern Economics David Hrowitz ed., New York: Monthly Review Press, 1968.
Michał Kalecki “Observations on the Theory of Growth”, pp. 139–140.
“The tendency to collapse is always there in an industrialized capitalist society.” (Sweezy, in David Horowitz ed. Marx and Modern Economics, New York: Monthly Review Press, pp. 320–1).
Nicholas Kaldor, “Alternative Theories of Distribution”, Review of Economic Studies, Volume 23, No. 2, 1955–56, p. 95.
A Neo-Classical Theory Of Economic Growth James Meade. London: George Allen and Unwin, 1962, pp. 47–48 footnote.
Philip Arestis, Malcolm Sawyer, “Keynesian Economic Policies for the New Millennium” Economic Journal, Vol. 108 (446). p 181–95. January 1998.
Michał Kalecki, “The Lessons of the Blum Experiment”, The Economic Journal, Vol. 48, No. 189. (Mar., 1938), pp. 26–41.
Michał Kalecki, “Class Struggle and Distribution of National Income”, Kyklos, Vol. 24, No.1, 1971, pp. 1–9.
The Dynamics of U.S. Capitalism: Corporate Structure, Inflation, Credit, Gold, And The Dollar [compiled] by Paul M. Sweezy and Harry Magdoff. New York: Monthly Review Press, 1972.
See also Harold G. Vatter, John F Walker, Gar Alperovitz, “The Onset and Persistence of Secular Stagnation in the U.S. Economy: 1910–1990”, Journal of Economic Issues. Vol. 29 (2). p. 591–600. June 1995.
See Democratic Theory: Essays In Retrieval C. B. Macpherson. Oxford: Clarendon Press, 1973;
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Altered States: The United States And Japan Since The Occupation Michael Schaller. New York: Oxford University Press, 1997;
The Pacific Alliance: United States Foreign Economic Policy And Japanese Trade Recovery, 1947–1955 William S. Borden. Madison, Wis.: University of Wisconsin Press, 1984.
See however: Peter Kriesler, Joseph Halevi, “Asia, Japan and the Internationalization of Effective Demand”, Economies et Societes. Vol. 30 (2–3). p 301–20. Feb.–March 1996.
Joseph Halevi, Peter Kriesler, “History, Politics and Effective Demand in Asia” in Joseph Halevi and Jean-Marc Fontaine eds, Restoring demand in the world economy: Trade, finance and technology, Cheltenham, U.K. and Northampton, Mass.: Elgar; pp. 77–92. 1998.
Alain Parguez,. “The Roots of Austerity in France”, Restoring demand in the world economy: Trade, finance and technology. Joseph Halevi, Jean-Marc Fontaine, eds., Cheltenham, U.K. and Northampton, Mass.: Elgar; distributed by American International Distribution Corporation, Williston, Vt. p 182–96. 1998.
Harry Magdoff., “The same old state”, Monthly Review, Jan 1998 v 49 n8 p. 1–10
Monopoly And Competition: A Study In English Industrial Organisation Hermann Levy. London: Macmillan, 1911.
Money And Empire: The International Gold Standard, 1890–1914 Marcello de Cecco. Oxford: B. Blackwell, 1974.
Capitalism From Above And Capitalism From Below: An Essay In Comparative Political Economy Terence J. Byres. Houndmills, Basingstoke, Hampshire: Macmillan Press; New York: St. Martin’s Press, 1996.
Capitalists In Spite Of Themselves: Elite Conflict And Economic Transitions In Early Modern Europe Richard Lachmann. New York: Oxford University Press, 2000.
Capitalism since 1945 Philip Armstrong, Andrew Glyn, John Harrison. Oxford, UK; Cambridge, Mass.: Basil Blackwell, 1991;
The Economics Of The Profit Rate: Competition, Crises, And Historical Tendencies In Capitalism Gérard Duménil and Dominique Lévy. Aldershot, Hants, England; Brookfield, Vt.: Edward Elgar, 1993.
Benetti, Carlo; Cartelier, Jean. “Une dynamique économique sans théorie?” (With English summary.). [Journal Article] Recherches Economiques de Louvain. Vol. 61 (3). p 289–300. 1995.
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© 2016 Joseph Halevi, G. C. Harcourt, Peter Kriesler and J. W. Nevile
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Halevi, J. (2016). Capitalism and Post-Keynesian Economics: Some Critical Observations. In: Post-Keynesian Essays from Down Under Volume IV: Essays on Theory. Palgrave Macmillan, London. https://doi.org/10.1057/978-1-137-47529-9_37
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