History of Economic Doctrines II

Economics 7600

 

This course is devoted to the history of ideas.  Two important assumptions are made, namely: economic ideas do not proceed in a smooth fashion, so that economic knowledge at the frontier is not a repository of all past learning; also, it is presumed that historically determined social and economic conditions affect the evolution of economic ideas.  The jumps and the succession of revolutions and periods of consolidation in the history of ideas are then studied in four different historical periods: the Marginalist Revolution during the height of the British dominance; the turbulent inter-war period, also known as the years of high theory associated to the Keynesian Revolution; the attempts to re-establish the validity of the surplus approach during the so-called Golden Age; and, last but not least, the resurgence of what may be termed vulgar economics in the last quarter of the 20th century of which the ‘neoliberal’ pro-corporate globalization approach is the most notorious representation.

 

Most courses on history of thought concentrate on the theory of value and distribution.  Although we will pay attention to value and distribution, questions related to accumulation, and the level of activity will also be central to our discussion.  In particular, the distinction between the surplus approach and the rise of supply and demand theories, and the role of the principle of effective demand and the Keynesian Revolution will be central for the ideas discussed in the course.

 

Readings will rely extensively on commentaries and in a few cases on original sources.  One book is useful and covers most, but not all, topics, namely: Screpanti, E. and S. Zamagni (2005), An Outline of the History of Economic Thought, 2nd Edition (referred to as SZ) Attendance is required and participation in class will be encouraged.  There will be one take home midterm worth 50 per cent of the final grade, and a take-home final term paper on a topic chosen in consultation with the instructor worth 50 per cent.  Office hours will be announced in class, but I am available in my office for informal discussions.  If you need to schedule an appointment or discuss some special need e-mail me at vernengo@economics.utah.edu.

 

Part I Why Do We Care about the History of Ideas

 

1. The Methodology of Social Sciences

Caldwell (1982) ch. 5; McCloskey (1983); Lawson (1989); SZ pp. 1-15

 

2. Is there Progress in Economics?

Coats (1969); DeVroey (1975); Pasinetti (2002)

 

Part II Social Conflict and Marginalism

 

3. From Surplus to Marginalism

Bharadwaj (1976) ch. 1; Lunghini (1998); SZ ch. 3 and 5;

 

4. The Marshallian Synthesis

Bharadwaj (1978); SZ ch. 6

 

Part III Depression and the Years of High Theory

 

5. Sraffa and the Marshallian System

Sraffa (1926); Mongiovi (1996); SZ ch. 8.1 and 8.5

 

6. The Principle of Effective Demand

Keynes (1936) chs 2, 6, 14, and18; Amadeo (1989) chs. 2-5 and 7; Pivetti (1991) ch. 9; SZ ch. 7

 

7. Price Flexibility and Full Employment

Keynes (1936) ch.19; Kalecki (1944); Patinkin (1987);

 

8. The Keynesian Revolution and Policy

Tomlinson (1981); Booth (1983); Vernengo (2009)

 

Part IV A Pyrrhic Victory in the Golden Age?

 

9. The Revival of the Surplus Approach

Sraffa (1960) chs. 1 to 5 and Appendix D; DeVivo (2003); Kurz and Salvadori (2004)

 

10. The Capital Debates

Sraffa (1960) ch. 12; Samuelson (1962); Samuelson (1966); Garegnani (1970); Kurz and Salvadori (1995) chs. 13 and 14

 

11. Effective Demand in the Long Run

Serrano (1995); Garegnani and Palumbo (1998); Vernengo and Rochon (2001)

 

12. Marx and Keynes after Sraffa

Garegnani (1978-9); Garegnani (1984); Vianello (1987), Vernengo (2001)

 

Part V Globalization and the Return Vulgar Economics

 

13. General Equilibrium and the classical-Keynesian Alternative

Garegnani (1976); Petri (2003); SZ ch 10.1 and 10.2

 

14. Information Economics: A New Paradigm?

Stiglitz (1993); SZ ch 12

 


References

 

Amadeo, E. (1989), Keynes's Principle of Effective Demand, Aldershot, E. Elgar.

 

Bharadwaj, K. (1976), Classical Political Economy and the Rise to Dominance of Supply and Demand Theories, Calcutta, Sangam Books.

 

Bharadwaj, K. (1978), “The Subversion of Classical Analysis: Alfred Marshall’s Early Writings on Value,” Cambridge Journal of Economics, 2, pp. 253-71.

 

Booth, A. (1983), “The Keynesian Revolution in Economic Policy Making,” Economic History Review, 36, pp. 103-23.

 

Caldwell, B. (1982), Beyond Positivism: Economic Methodology in the Twentieth Century, London, Unwin & Hyman.

 

Coats, A. W. (1969), “Is There a ‘Structure of Scientific Revolutions’ in Economics?” in W. Marr and B. Raj, (eds.), How Economists Explain, New York, University Press of America, 1983.

 

DeVivo, G. (2003), “Sraffa’s Path to Production of Commodities by Means of Commodities,” Contributions to Political Economy.

 

DeVroey, M. (1975), “The Transition From Classical to Neo-Classical Economics: A Scientific Revolution,” Journal of Economic Issues, 9.

 

Garegnani, P. (1970), “Heterogeneous Capital, the Production Function and the Theory of Distribution,” Review of Economic Studies, 37, pp. 407-36.

 

Garegnani, P. (1976), “On the Change in the Notion of Equilibrium in Recent Work on Value,” in M. Brown, (ed.), Modern Capital Theory, Amsterdam, North-Holland.

 

Garegnani, P. (1978-9), “Notes on Consumption, Investment and Effective Demand, I-II,” Cambridge Journal of Economics, 2-3.

 

Garegnani, P. (1984), “Value and Distribution in the Classical Economists and Marx,” Oxford Economic Papers, 36, pp. 291-325.

 

Garegnani, P. and A. Palumbo (1998), “Capital Accumulation,” in H. Kurz and N. Salvadori, eds., The Elgar Companion to Classical Economics, Cheltenham, Edward Elgar.

 

Kalecki, M. (1944), “Prof. Pigou on the Classical Stationary State: A Comment,” Economic Journal, April.

 

Keynes, J. M. (1936), The General Theory of Employment, Interest and Money, New York, Harcourt Brace, 1964.

 

Kurz, H. and N. Salvadori (1995), Theory of Production, Cambridge, Cambridge University Press.

 

Kurz, H. and N. Salvadori (2004), “Man from the Moon: On Sraffa’s Objectivism,” Économie et Sociétés, 35.

 

Lawson, T. (1989), “Abstraction, Tendencies and Stylized Facts,” Cambridge Journal of Economics, 13(1), pp. 59-78.

 

Lunghini, G. (1998), “Political Economy and Economics,” in H. Kurz and N. Salvadori, eds., The Elgar Companion to Classical Economics, Cheltenham, Edward Elgar.

 

Mongiovi, G. (1996), “Sraffa’s Critique of Marshall,” Cambridge Journal of Economics, 20, pp. 207-34.

 

McCloskey D. (1983), “The Rhetoric of Economics,” Journal of Economic Literature, 21(2), pp. 481-517.

 

Pasinetti, L. (2002), “Progress in Economics,” in S. Boehm, C. Gehrke and H. Kurz, eds., Is there Progress in Economics? Cheltenham, Edward Elgar.

 

Patinkin, D. (1987), “Real Balance Effects,” in J. Eatwell, M. Milgate and P. Newman, eds., The New Palgrave Dictionary of Economics, London, Macmillan.

 

Petri, F. (2003), “A Sraffian Critique of General Equilibrium Theory, and the Classical-Keynesian Alternative,” in F. Petri and F. Hahn, eds., General Equilibrium: Problems and Prospects, New York, Routledge.

 

Pivetti, M. (1991), An Essay on Money and Distribution, London, Macmillan.

 

Samuelson, P. (1962), “Parable and Realism in Capital Theory: The Surrogate Production Function,” Review of Economic Studies, 29(3), pp. 193-206.

 

Samuelson, P. (1966), “A Summing Up,” Quarterly Journal of Economics, 80(4), pp. 568-83.

 

Screpanti, E. and S. Zamagni (2005), An Outline of the History of Economic Thought, New York, Oxford University Press, 2nd Edition.

 

Serrano, F. (1995), “Long Period Effective Demand and the Sraffian Supermultiplier,” Contributions to Political Economy, 14, pp. 67-90.

 

Sraffa, P. (1926), “The Law of Returns Under Competitive Conditions,” Economic Journal, 36, pp. 535-50.

 

Sraffa, P. (1960), Production of Commodities by Means of Commodities, Cambridge, Cambridge University Press.

 

Stiglitz, J. (1993), “Post Walrasian and Post Marxian Economics,” The Journal of Economic Perspectives, 7(1), pp. 109-114.

 

Tomlinson, J. (1981), “Why Was There Never a ‘Keynesian Revolution’ in Economic Policy?Economy and Society, 10(1), pp. 72-87.

 

Vernengo, M. (2001), “Sraffa, Keynes and ‘The Years of High Theory’”, Review of Political Economy, 13(3), pp.

 

Vernengo, M. (2009), “A Hands-off Central Banker? Marriner S. Eccles and Federal Reserve Policy, 1934-1951,” in R. Leeson, ed., American Power and Policy, London, Palgrave-Macmillan.

 

Vernengo, M. and L-P. Rochon (2001), “Kaldor and Robinson on Money and Growth,” European Journal of the History of Economic Thought, 8(1), pp.

 

Vianello, F. (1987), “The Labor Theory of Value,” in J. Eatwell, M. Milgate and P. Newman, eds., The New Palgrave Dictionary of Economics, London, Macmillan.