Monday, February 11, 2008

Pasinetti's Principles

Luigi Pasinetti, in his new book, Keynes and the Cambridge Keynesians: A "Revolution in Economics" to be Accomplished, summarizes what he takes to be characteristic features of the Cambridge school:
  1. Reality (and not simply abstract rationality) as the starting point of economic theory.
  2. Economic logic with internal consistency (and not only formal rigour).
  3. Malthus and the Classics (not Walras and the Marginalists) as the major inspiring source in the history of economic thought.
  4. Non-ergodic (in place of stationary, timeless) economic systems.
  5. Causality vs. Interdependence.
  6. Macroeconomics before Microeconomics.
  7. Disequilibrium and instability (not equilibrium) as the normal state of the industrial economies.
  8. Necessity of finding an appropriate analytical framework for dealing with technical change and economic growth.
  9. A strong, deeply felt social concern.


Gabriel Mihalache said...

Isn't science supposed to be figuring out what "reality" is, in which case #1 means you beg the question, no? -- Unless by "reality" you mean the adequate leftist prejudices...

Robert Vienneau said...

"...#1 means you beg the question, no?"

No, #1 does not mean that.

Patch said...

# 5 ist not really a principle, or I don't get it.

praxis said...

Perhaps #1 is meant to contrast with, say, Friedman's ideas on the methodology of positive economics. Then the suggestion would be something along the lines of: the economic principles we use should be realistic in themselves, in addition to having predictive power.

YouNotSneaky! said...

#1 Gabriel's right. The principle seems to say "we already know the truth", now let us construct theory to reflect it,
#2. Who could disagree with that? Trouble starts when one person's assumption is seen as another's "internal inconsistency"
#3. This one's actually substantial. I think he's wrong on it, but sure.
#4. Good luck modeling that in a way that can actually tell us anything substantial about the real world. If it works then that's great. More likely you're just gonna hafta make some equally simplifying assumption (like say, stupid expectations in the place of the stationary one, or ditch the whole behavioral aspect all together.
#5. Sounds nice. Not sure what it means. Needs elaboration.
#6. For God's sake why?!?
#7. See #4
#8. Who could disagree with that?
#9. No. In opinion pieces, editorials, policy advocacy, sure. Even when deciding upon one's research agenda. In an objective pursuit of knowledge, no.

Robert Vienneau said...

Yes, part of the point of #1 is to contrast with Friedman's stated methodology. Pasinetti further points to Kaldor's stylized facts as what he is talking about.

I took the wording of these principles directly from Pasinetti. The idea behind #5 is that not all economic relations should necessarily be expressed as sets of timeless systems of equations. Where a theory does express interdependence (e.g., Sraffa's equations), the theory should be open, thereby leaving room for causal relationships.

Pasinetti is characterizing about three-quarters of a century of work. Familarity with at least some of that work helps in understanding what he is saying.