Pasinetti and the Classical Keynesians: Nine Methodological Issues

Description

Recent economic and financial crises have exposed mainstream economics to severe criticism, bringing present research and teaching styles into question. Building on a solid and vivid tradition of economic thought, this book challenges conventional thinking in the field of economics. The authors turn to the work of Luigi Pasinetti, who proposed a list of nine methodological and theoretical ideas that characterize the Classical Keynesian School. Drawing inspiration from both Keynes and Sraffa, this school has forged a long-standing and ambitious research programme often advocated as a competing paradigm to mainstream economics. Overall, the Classical Keynesian School provides a comprehensive analytical framework into which most non-mainstream schools of thought can be integrated. In this collection, a group of leading scholars critically assess the nine main ideas that, in Pasinetti's view, characterize the Classical-Keynesian approach, evaluating their relevance for both the history of economics and for present economic research. Cover Half-title Title page Copyright information Contents List of Contributors Foreword: The Political Economy of Luigi Pasinetti Premise Between Classical Political Economy and Keynes Structural Interdependence, Savings and Capital Accumulation Towards a Theory of Structural Economic Dynamics Vertical Integration in Economic Analysis: Measuring Technical Progress and Assessing the Economy's Dynamic Potential Distinguishing between the Fundamental and the Contingent Properties of Economic Systems: 'Objective Efficiency' and the Theory of Value Institutions and Institutional Change: From Natural Dynamics to Policy Assessment A Summing Up References Introduction References 1 Reality (and Not Simply Abstract Rationality) as the Starting Point of Economic Theory 1.1 Introduction 1.2 From Marshall to Keynes: Profit Maximisation as a 'Trial and Error' Method 1.3 Sraffa's Alternative 1.4 The Real versus the Imaginary World in Which Decisions Are Taken 1.5 Reasonableness 1.6 Possible Objections 1.7 Conclusions References 2 Economic Logic with Internal Consistency (and Not Only Formal Rigour): Realism and Internal Consistency in Piero Sraffa 2.1 Introduction 2.2 Sraffa's Strategy of Criticism 2.3 Sraffa's Assessment of the Successive Approximation Strategy 2.4 Sraffa's Realism 2.5 Concluding Remarks References 3 Malthus and the Classics (Not Walras and the Marginalists) as the Major Inspiring Source in the History of Economic Thought: The Principle of Effective Demand and Classical Economics 3.1 Introduction 3.2 Ricardo vs. Malthus on the Possibility of a 'General Glut' of Commodities 3.3 Keynes and the Principle of Effective Demand 3.4 Malthus - A Precursor of Keynes? 3.5 Surplus Approach and Effective Demand 3.6 Taking Stock 3.7 Concluding Remarks References 4 Non-ergodic (in Place of Stationary, Timeless) Economic Systems: Considerations Suggested by Joan Robinson's Distinction between Two 'Notions' of Time in Economic Theory 4.1 Introduction 4.2 Expectations and Successive Positions of the Economic System 4.3 Alternative Simultaneous Positions of the Economic System 4.4 Historical Circumstances in Classical and Neoclassical Theories 4.5 The 'Photographic' Interpretation of the Classical Theory and the Need for a Process of Price Adjustment 4.6 Changes over Time in the Position of the Economic System 4.7 'Logical' Time and 'Real' Time in the Neo-Walrasian Theory References 5 Causality vs. Interdependence: A Distinction That Conveys a World's View 5.1 Introduction 5.2 Classical Economists 5.2.1 Causality in Ricardo's Analysis of Distribution and Value 5.2.2 Causality in Marx's Analysis of Values, Distribution and Prices 5.3 Sraffa's Production of Commodities 5.3.1 Sraffa on Causality: Some Methodological Handwritten Notes 5.3.2 Interdependence between Prices and the Rate of Profit 5.3.3 The Standard Commodity and the Recovery of Causality 5.3.4 Standard Commodity: A Tool to Separate Distribution from Value 5.3.5 A Deeper Assessment of These Achievements 5.4 Keynes 5.5 Cumulative Causation and Path Dependence in Post-Keynesian Literature 5.6 Concluding Remarks References 6 Macroeconomics before Microeconomics: A Sceptic's Guide to Macroeconomics 6.1 Introduction 6.2 'Macroeconomics' before Macroeconomics 6.3 Macroeconomics and the Keynes Problem 6.4 Macroeconomics and Microeconomics 6.5 An Inherent Contradiction in General-Equilibrium Macroeconomics 6.6 The Science of Macroeconomics 6.7 The Present Position of Macroeconomics 6.8 Summing-Up References 7 Disequilibrium and Instability (Not Equilibrium) as the Normal State of the Industrial Economies: A Methodological Standpoint on Structural Economic Dynamics 7.1 Introduction 7.2 Methodological Standpoint: Pre-institutional and Behavioural Relations 7.3 The (Pre-institutional) Principle of Effective Demand 7.4 Equilibrium, Full Employment and Stability 7.4.1 The Conditions for Equilibrium Growth 7.4.2 Pre-institutional and Behavioural Relations in Harrod and Domar 7.5 Structural Dynamics and Effective Demand in Industrial Economies References 8 Necessity of Finding an Appropriate Analytical Framework for Dealing with Technical Change and Economic Growth: Technical Change, Structural Dynamics and Employment 8.1 Introduction 8.2 Vertically Integrated Sectors and the Structural Dynamics of Employment 8.3 The Appropriate Analytical Framework for Dealing with Technical Progress, Economic Growth and Structural Change 8.4 Concluding Remarks References 9 A Strong, Deeply Felt, Social Concern 9.1 Foreword: An Unorthodox Economist 9.2 From Keynes and beyond Keynes 9.3 The Needed Criticism of the Mainstream Models 9.4 The Industrial Revolution and Globalisation: Technical Progress as a 'Prime Mover' 9.4.1 The Centrality of Labour and Employment 9.4.2 The Social Role of Physical Capital 9.4.3 Institutions in a Framework of Continuous Change 9.5 A Specific Sensitivity for Social Concerns 9.5.1 His Italian Background 9.5.2 The Importance of Goals in Economic Activity 9.5.3 Facing the Distorted Phenomenon of Globalisation 9.6 A Common Ground References 10 Why the Classic-Keynesian Trend May Be of Interest to a Young Scholar Today 10.1 Fighting for Independence 10.1.1 A Strong, Deeply Felt Social Concern 10.1.2 Reality (and Not Simply Abstract Rationality) as the Starting Point of Economic Theory 10.1.3 Economic Logic with Internal Consistency (and Not Only Formal Rigour) 10.1.4 Necessity of Finding an Appropriate Analytical Framework for Dealing with Technical Change and Economic Growth 10.1.5 Disequilibrium and Instability (Not Equilibrium) as the Normal State of the Industrial Economies 10.1.6 Non-ergodic (in Place of Stationary, Timeless) Economic Systems 10.1.7 Causality vs. Interdependence 10.1.8 Macroeconomics before Microeconomics 10.1.9 Malthus and the Classics (Not Walras and the Marginalists) as the Major Inspiring Source in the History of Economic Thought 10.2 A Choice of Sides: Raniero Panzieri and the 'Quaderni Rossi' Group 10.2.1 No Admittance Except on Business: The Importance of Field Inquiries 10.2.2 Technological Progress and Capitalistic Control 10.2.3 Pasinetti and Panzieri: The Odd Couple? 10.3 Global Value Chains, Industry 4.0 and Lean Production 10.3.1 Everything as a Service: The Myth of 'Dematerialisation' 10.4 Back to the Future of 'Keynesian' Revolution References 11 Pasinetti's Separation Theorem 11.1 Protoeconomics 11.2 Effective Demand and Methodology 11.3 Logical and Historical Time 11.4 Interdependence 11.5 Stabilising Growth and Employment: How and Why? References Author Index