LongPeriod Keynesians
Sraffa, though a close friend of Keynes, was not bowled over by The General Theory. He did defend Keynes's Treatise on Money against Friedrich von Hayek's attack, in the process using the concept of own rates of interest. Keynes used the concept to play a key role in the crucial, difficult chapter 17 of The General Theory. We suspect that Sraffa would not have approved, because he used the concept in an internal critique of Hayek's system, not to analyze actual economies. Sraffa's followers...
Conclusion Macroeconomics Before The General Theory
Harry Johnson Johnson and Johnson, 1978 and Laidler 1999 argued that for the Keynesian revolution or monetarist counter-revolution to capture the attention and allegiance of the profession and policy-makers, differences with previous theories had to be over-dramatized, terminology altered, and continuities under-played. This led to a period of neglect of the monetary theory flowing from the work of Marshall, Fisher, and Wicksell, and of business cycle theory following from Juglar and Jevons....
Hermeneutic Authority and the Hermeneutics of Suspicion
A second reason why Stigler's notion of the pre-understood general position is problematic emerges from the role that it assigns to the economics profession as the final arbiter of meaning. If the economics profession governs the pre-understanding that we bring to the text before us, will that scientific community be willing to give a legitimate hearing to a new interpretation of a well-known text We know Adam Smith, and this is not the Smith we know. Can a new interpretation of an author cause...
War and Depression Concentrate the Economic Mind
In the prosecution of World War II - and in contrast to that of World War I -economists were employed throughout government in both macroeconomic agencies such as the Federal Reserve, the Treasury, and the Budget Bureau, where Keynesian notions of demand management seemed demonstrably useful and in many new institutions created specifically to wage war, where the problems were mainly microeconomic in nature, such as how to arrange for the production and distribution of strategic materials, and...
The Legacy
The strand of the theory of imperfect competition that originated in Cambridge, England, was an attack on the Marshallian cost and demand curves launched by Sraffa in his 1925 and 1926 articles on the ground of lack of consistency and realism. In the work done first by Richard Kahn and then by Joan Robinson, imperfect competition was a means to supplement the Marshallian approach rather than a reason to discard it. Perfect competition was shown to be a special case, rather than the general case...
Luigi Pasinetti Richard Goodwin and Michal Kalecki
The most original, ambitious, and sustained attempt to marry classical political economy as revived by Sraffa and Keynes's insights is found in the writings of Pasinetti, senior heir to the pure post-Keynesian school of economic thought now that the founding members are dead. His multi-sectoral growth model, originally developed in his Cambridge Ph.D. dissertation in the 1950s and 1960s, and reaching maturity in his 1981 book and 1993 students' guide , is a tour de force. It absorbs Kahn's and...
The Great Gap Thesis as the Problem
In his seminal 1954 work History of Economic Analysis, Joseph Schumpeter proposes a historical gap of some five hundred years in the history of economics after its beginnings in ancient Greece. Nothing was said, written, or practiced which had any relevance to economics Mirakhor, 1988 1983 , p. 301 within this historical gap, which stretched from the demise of Greek civilization to the writings of Thomas Aquinas 1225-74 . For, according to Schumpeter 1954, p. 74 , many centuries within that...
Cambridge
For Keynes 1936 , classical economics did not end with John Stuart Mill. In Keynes's usage, the classical economists were all those to whom he attributed acceptance of Say's Law impossibility of insufficient aggregate demand , including Marshall and Pigou, professors of economics at Cambridge from 1885 to1908 and 1908 to 1943, respectively. Keynes 1936, appendix to ch. 19 took Pigou 1933 as his target, summarizing it in two classical postulates. Keynes 1936, ch. 2 accepted the first classical...
Interpretation of the Mercantilist Doctrine
The mercantilist writers - in Britain and elsewhere - were preoccupied with the question of how the nation should become prosperous, wealthy, and powerful. To this effect, they proposed, among other things, the doctrine of a favorable balance of trade mentioned above. As this theory seems to be in total contrast to later theories, such as Hume's specie-flow mechanism, numerous interpreters have tried hard to make sense of why the mercantilist would hold such errant beliefs as the positive...
Economics Turgot
The model in question sought to explore the interrelationships between output, the generation of income, expenditure, and consumption - or, in Quesnay's words, a general system of expenditure, work, gain and consumption Meek, 1962, p. 374 which would expose the point that the whole magic of a well ordered society is that each man works for others, while believing that he is working for himself Meek, 1962, p. 70 . Peter Groenewegen has confirmed that Turgot was in Paris between July and...
Concluding Remarks
The Great Gap thesis, which has been implicit in the history of economic thought since at least the nineteenth century, was made explicit by Joseph Schumpeter in 1954. But demonstrations of the historical continuity of economic thought have led to rejection of the thesis. These demonstrations have included the contributions of medieval Muslim scholars to the history of economics during the five centuries of the alleged Great Gap, the transmission of medieval Muslim knowledge to Western Europe...
The History of the Concept
In common scholarly and popular vocabulary, the concept of mercantilism designates either a system of economic policy or an epoch in the development of economic doctrine during the seventeenth and eighteenth centuries, or both of them, before the publication of Adam Smith's path-breaking Wealth of Nations 1776 . The bulk of what is commonly known as mercantilist literature appeared in Britain from the 1620s up until the middle of the eighteenth century. However, the concept also appeared as a...