On Skidelsky s Keynes and Other Essays

On Skidelsky s Keynes and Other Essays

On Skidelsky s Keynes and Other Essays Selected Essays of G. C. Harcourt G. C. Harcourt Emeritus Reader in the History of Economic Theory, University of Cambridge; Emeritus Fellow, Jesus College, Cambridge; Professor Emeritus, University of Adelaide; Visiting Professorial Fellow, University of New South Wales

G. C. Harcourt 2012 Co-authors Sean Turnell, P. H. Nolan, Prue Kerr, Ajit Singh and Catherine Walston 2012 Softcover reprint of the hardcover 1st edition 2012 978-0-230-28468-5 All rights reserved. No reproduction, copy or transmission of this publication may be made without written permission. No portion of this publication may be reproduced, copied or transmitted save with written permission or in accordance with the provisions of the Copyright, Designs and Patents Act 1988, or under the terms of any licence permitting limited copying issued by the Copyright Licensing Agency, Saffron House, 6 10 Kirby Street, London EC1N 8TS. Any person who does any unauthorized act in relation to this publication may be liable to criminal prosecution and civil claims for damages. The author has asserted his right to be identified as the author of this work in accordance with the Copyright, Designs and Patents Act 1988. First published 2012 by PALGRAVE MACMILLAN Palgrave Macmillan in the UK is an imprint of Macmillan Publishers Limited, registered in England, company number 785998, of Houndmills, Basingstoke, Hampshire RG21 6XS. Palgrave Macmillan in the US is a division of St Martin s Press LLC, 175 Fifth Avenue, New York, NY 10010. Palgrave Macmillan is the global academic imprint of the above companies and has companies and representatives throughout the world. Palgrave and Macmillan are registered trademarks in the United States, the United Kingdom, Europe and other countries. ISBN 978-1-349-32986-1 ISBN 978-0-230-34864-6 (ebook) DOI 10.1057/9780230348646 This book is printed on paper suitable for recycling and made from fully managed and sustained forest sources. Logging, pulping and manufacturing processes are expected to conform to the environmental regulations of the country of origin. A catalogue record for this book is available from the British Library. Library of Congress Cataloging-in-Publication Data Harcourt, Geoffrey Colin. On Skidelsky s Keynes and other essays / G.C. Harcourt. p. cm. Includes index. ISBN 978-1-349-32986-1 1. Keynesian economics. I. Title. HB99.7.H323 2011 330.15 6 dc23 2011024167 10 9 8 7 6 5 4 3 2 1 21 20 19 18 17 16 15 14 13 12

Contents List of Tables List of Figures Acknowledgements vii viii ix Introduction: On Skidelsky s Keynes and Other Essays 1 Part I Title Essay 1 On Skidelsky s Keynes (2005) 13 with Sean Turnell Part II Autobiographical Essay 2 Political Economy, Politics and Religion: Intertwined and Indissoluble Passions (1998) 59 Part III Post-Keynesian Theory 3 A Teaching Model of the Keynesian System (1969) 87 4 On Keynes and Chick on Prices in Modern Capitalism (2002) 113 5 On Specifying the Demand for Imports in Macroeconomic Models (2006) 123 6 The Theoretical and Political Importance of the Economics of Keynes: Or, What Would Marx and Keynes Have Made of the Happenings of the Past 30 Years and More? (2009) 132 7 The Rise and, Hopefully, the Fall of Economic Neo-Liberalism in Theory and Practice (2009) 149 8 Price Theory and Multinational Oligopoly: Kurt Rothschild and Stephen Hymer Revisited (2009) 156 with P. H. Nolan Part IV Review Articles 9 A Revolution Yet to Be Accomplished: Reviewing Luigi Pasinetti, Keynes and the Cambridge Keynesians: A Revolution in Economics to Be Accomplished (2009) 181 v

vi Contents 10 The Collected Writings of an Indian Sage: Reviewing Alaknanda Patel (ed.), The Collected Works of A. K. Dasgupta, 3 Vols, 2009 (2011) 189 Part V Surveys 11 Keynes and the Cambridge School (2003) with Prue Kerr 12 What Is the Cambridge Approach to Economics? (2007) Part VI Policy 13 Markets, Madness and a Middle Way Revisited (2007) 14 Finance, Speculation and Stability: Post-Keynesian Policies for Modern Capitalism (2010) Part VII Intellectual Biographies and Tributes 15 The Contributions of Tom Asimakopulos to Post-Keynesian Economics (2008) 16 Keith Septimus Frearson, 18 September 1922 2 February 2000: A Memoir and a Tribute (2000) 17 Reddaway, [William] Brian, 1913 2002 (2004) 18 Sukhamoy Chakravarty, 26 July 1934 22 August 1990 (1991) with Ajit Singh 19 David Gawen Champernowne, 1912 2000: In Appreciation (2001) 20 Robin Matthews: A Tribute (2010) 21 Cambridge Economics (2008) with Catherine Walston Part VIII General Essays 22 100 Years of the Economics Tripos (2009) 199 219 243 256 273 290 294 304 308 314 319 327 Index 335

Tables 3.1 Impact of unit change in the simplest case 95 3.2 Impact of unit change in the complex case 103 8.1 Dominance of the global big business revolution by firms based in high income countries 167 vii

Figures 1.1 A family of equilibrium values of Y and i for different values of P 36 1.2 Determining the general price level 37 3.1 The consumption function 89 3.2 The investment function 89 3.3 The liquidity preference function 91 3.4 Short-period equilibrium 110 3.5 The IS schedule 106 3.6 The LM schedule 107 3.7 The LM schedule with a flexible money supply 112 3.8 Possible equilibrium values of r and Y 108 5.1 Short-period equilibrium in an open economy with a government 126 5.2 Demands for imports by the expenditure and income methods 128 viii

Acknowledgements First, I would like to acknowledge the co-authors of some of the essays in these volumes: Stephanie Blankenburg, Avi Cohen, John Grieve Smith, Prue Kerr, Mehdi Monadjemi, Peter Nolan, Ajit Singh, Sean Turnell and Catherine Walston. One of the real pluses of the community of scholars is that co-authors are also such close and supportive friends. I am a very lucky person. Second, I am most grateful to Janet Nurse, Jane Starnes and Grace Setiawan for being such wonderful, cheerful and uncomplaining typists, and to Ha (Viet Ha Nguyen) for handling so expertly my e-mails, and for research assistance. The author and publishers wish to acknowledge with thanks the following for permission to reproduce copyright material: The editorial team of Economic and Political Weekly for permission to reprint On Skidelsky s Keynes, Economic and Political Weekly, vol. 40, 19 November 2005, pp. 4931 46. The editor of The American Economist for permission to reprint Political Economy, Politics and Religion: Intertwined and Indissoluble Passions, American Economist, vol. 42, Fall, 1998, pp. 3 18. The editor of Keio Economic Studies for permission to reprint A Teaching Model of the Keynesian System, published in Keio Economic Studies, vol. 6, no. 2 (1969), pp. 23 46. Taylor and Francis Group for permission to reprint On Keynes and Chick on Prices in Modern Capitalism, ch. 12 of Philip Arestis, Meghnad Desai and Sheila Dow (eds), Money, Macroeconomics and Keynes: Essays in honour of Victoria Chick, Volume One (London, Routledge, 2002), pp. 115 23. Edward Elgar Publishing Ltd, Cheltenham, Glos. for permission to reprint On Specifying the Demand for Imports in Macroeconomic Models, in Philip Arestis, John McCombie and Roger Vickerman (eds), Growth and Economic Development: Essays in Honour of A.P. Thirlwell, Cheltenham, UK and Northampton, MA: Edward Elgar Publishing, 60 67. Taylor and Francis Group for permission to reprint The Theoretical and Political Importance of the Economics of Keynes: Or, What Would Marx and Keynes Have Made of the Happenings of the Past 30 Years ix

x Acknowledgements Or More? In Mathew Forstater, Gary Mongiovi and Steven Pressman (eds), Post Keynesian Macroeconomics. Essays in honour of Ingrid Rima, London and New York: Routledge, 2007, pp. 56 69. The editor of the Economic and Labour Relations Review for permission to reprint The Rise and, Hopefully, the Fall of Economic Neo- Liberalism in Theory and Practice, Economic and Labour Relations Review, vol. 20, December 2009, pp. 1 6. Orient Blackswan Private Limited, Hyderabad, India, for permission to reprint Price Theory and Multinational Oligopoly: Kurt Rothschild and Stephen Hymer Revisited Originally published in Post-Reform Development in Asia: Essays for Amiya Kumar Bagchi, Orient Blackswan, 2009, pp. 263 88. The editor of History of Economic Ideas for permission to reprint A Revolution Yet to Be Accomplished: Reviewing Luigi Pasinetti, Keynes and the Cambridge Keynesians: A Revolution in Economics to Be Accomplished, Cambridge, Cambridge University Press, 2007, History of Economics Ideas, vol. 17, 2009, pp. 203 8. John Wiley and Sons Ltd. For permission to reprint The Collected Writings of An Indian Sage: Reviewing Alaknanda Patel (2011, Economica). John Wiley and Sons Ltd. for permission to reprint Keynes and the Cambridge School, ch. 22 of Warren J. Samuels, Jeff E. Biddle and John B. Davis (eds), A Companion to the History of Economic Thought, Malden, USA, Oxford, UK: Blackwell Publishing, 2003, pp. 343 59. Edward Elgar Publishing Ltd., Cheltenham, Glos. for permission to reprint Geoffrey Harcourt (2007), What Is the Cambridge Approach to Economics? in Eckhard Hein and Achim Truger (eds), Money, Distribution and Economic Policy. Alternatives to Orthodox Macroeconomics, Cheltenham, UK and Northampton, MA: Edward Elgar Publishing, pp. 11 30. The editor of the Economic and Labour Relations Review for permission to reprint Markets, Madness and a Middle Way Revisited, Economic and Labour Relations Review, vol. 17, April, 2007, pp. 1 10. Corrected version in vol. 18, November, 2007. Edward Elgar Publishing Ltd., Cheltenham, Glos. for permission to reprint Geoffrey Harcourt (2008), The Contributions of Tom Asimakopoulos to Post-Keynesian Economics, in L. Randall Wray and Mathew Forstater (eds), Keynes and Macroeconomics after 70 Years, Critical Assessments of The General Theory, Chapter 5, Cheltenham, UK and Northampton, MA: Edward Elgar Publishing, pp. 64 79.

Acknowledgements xi John Wiley and Sons Ltd. for permission to reprint Keith Septimus Frearson 18 September 1922 2 February 2000: A Memoir and a Tribute, Economic Record, vol. 76, September 2000, pp. 297 300. Oxford University Press for permission to reprint Sukhamoy Chakravarty, 26 July, 1934 22 August, 1990, Cambridge Journal of Economics, vol. 15, 1991, pp. 1 3 and David Gawen Champernowne, 1912 2000: In Appreciation, Cambridge Journal of Economics, vol. 25, July, 2001, pp. 439 42. The editors of the Royal Economic Society Newsletter for permission to reprint Robin Matthews, Royal Economic Society Newsletter, Issue No. 151, Octoter 2010, pp. 17 18. Third Millenium Information Ltd. for permission to reprint Economics: from Moral Science to Game Theory, in Peter Pagnamenta (ed.), The University of Cambridge: An 800th Anniversary Portrait, London: Third Millennium Publishing, 2008, pp. 168 71. The Cambridge Faculty of Economics for permission to reprint Geoff Harcourt on Cambridge Economics First Century, in Cambridge Economics Alumni Newsletter, Issue Number 2, Autumn, 2009, pp 4 6.