Tuesday, October 18, 2011

Pierangelo Garegnani (1930 – 14 October 2011)

Figure 1: A Production Function In Garegnani (1970)

I think the following are some of Garegnani's major claims about economics:

  • Classical economics provides an alternative theory to marginalist economics (misleadingly called "Neoclassical economics")
  • The givens of the classical theory of value and distribution are:
    • The gross quantities of output,
    • The production technique, and
    • The rate of profits or the wage.
  • These givens are to be explained within the discipline of political economy.
  • The classical theory of value and distribution can be combined with a Keynesian theory of effective demand.
  • The marginalists, from about 1870 to about 1930, shared with the classical economists a common method of trying to explain long-period prices and distribution.
  • Yet, the marginalist theory was incoherent because of their reliance on a given quantity of capital.
  • Hayek and Hicks, among others, initiated a major change in method with their creation of (very short period) theories of intertemporal and temporary equilibrium.
  • These new-fangled theories remain vulnerable to capital-theoretic critiques.
I give a very limited biography of articles in which Garegnani puts forth these theses, in English. As I understand it, his 1960 doctoral thesis was only published in Italian. His 1970 Review of Economic Studies article refutes the neoclassical long period theory of value and distribution, in general, and Samuelson's attempted defense with the pseudo-production function, more specifically. Joan Robinson took the opportunity of his 1978 and 1979 articles to break with Sraffianism on the ground that Garegnani's models were not located in historical time.

I include in the bibliography a festschrift published in his honor.

Selected Bibliography

  • Pierangelo Garegnani (1970). "Heterogeneous Capital, the Production Function and the Theory of Distribution", Review of Economic Studies V. 37, N. 3 (July): 407-436.
  • -- (1976) "On a Change in the Notion of Equilibrium in Recent Work on Value", in Essays in Modern Capital Theory (ed. by M. Brown, K. Sato, and P. Zarembka), North Holland. (Reprinted in J. Eatwell and M. Milgate (editors) (1983) Keynes's Economics and the Theory of Value and Distribution, Oxford.)
  • -- (1978) "Notes on Consumption, Investment, and Effective Demand, Part I", Cambridge Journal of Economics, V. 2: 335-353.
  • -- (1979) "Notes on Consumption, Investment, and Effective Demand, Part II", Cambridge Journal of Economics, V. 2:3: 63-82.
  • -- (1984). "Value and Distribution in the Classical Economists and Marx", Oxford Economic Papers, V. 36, N. 2 (June): 291-325.
  • -- (1990). "Quantity of Capital", in The New Palgrave: Capital Theory (Ed. by J. Eatwell, M. Milgate, and P. Newman), Macmillan Press.
  • -- (1990b). "Sraffa: Classical versus Marginalist Analysis", in Essays on Piero Sraffa: Critical Perspectives on the Revival of Classical Theory (Ed. by K. Bharadwaj and B. Schefold), Unwin-Hyman.
  • -- (2010). "On the Present State of the Capital Controversy", Sraffa's Production of Commodities by Means of Commodities,1960-2010: Critique and Reconstruction of Economic Theory, Roma (2-4 December).
  • Gary Mongiovi and Fabio Petri (editors) (1999). Value, Distribution and Capital: Essays in honour of Pierangelo Garegnani, Routledge.

Update (21 October): Some other obituaries: Tyler Cowen, at Daily Kos, Barkley Rosser, David Ruccio, Matias Vernengo. In other languages than mine: Sergio Cesaratto, Revista Circus, Giorgio Napolitano, Antonella Stirati


rat racing bets said...

"These givens are to be explained within the discipline of political economy."

To avoid misunderstanding you, I'd like to know if that's the difference between political economy and economics / value theory.

Lori said...

I'd like to know if there's an example of an economic relationship that's not also a power relationship.

Anonymous said...

Its huge loss for the economic theory. One of the greatest economist of the century.

Anonymous said...

Thanks for posting this. So far it's the best online resource I've seen for learning about Garegnani. The part that gave me pause was:

"The marginalists, from about 1870 to about 1930, shared with the classical economists a common method of trying to explain long-period prices and distribution."

I don't know how to make sense of this argument. Normally the story is of a radical break -- abandonment of an objective value theory for a subjective one, abandonment of the theory of rent in favor of marginal productivity theory. I'm interested to know in what way Garegnani saw continuity on pricing and distribution.


Robert Vienneau said...

I can see I was unclear on a couple of points.

Garegnani distinguished between theory and method. For Sraffians, there is indeed a severe discontinuity in theory between the classical and early marginalist economists. But they both retained a method of focusing the the theory of value on long period positions - think about the Classical's "natural prices", Marx's "prices of production", and Marshall's "normal prices". Theories of intertemporal and temporary equilibria refocus value theory on the short period. So Garegnani sees a break in method around the 1930s and 1940s.

One of the differences between the theories of value in the Classicals and the Marginalists can be see in their givens. I listed the givens for the Classicals in the post. For the Marginalists, the givens are tastes, technology, and the initial distribution of endowments. Traditionally, these givens were to be explained outside economics. But one can theories of advertisement and taste formation, of innovation and technical change, and of law and property rights.

When listing the differences in givens for the theory of value and distribution, I was not trying to get at the distinction between political economy and economics. I used the different terminology only because the Classicals called what they were doing "political economy", and Marshall called it "economics". But I find interesting the suggestion that the distinction is whether one takes as data the givens of the theory of value and distribution or goes on to further investigate the formation of the data.

Sraffians, including Garegnani, emphasize that, with their given, the theory of value is open. I think the structure of the theory allows one to go on to investigate how power shapes values and distribution.

Anonymous said...

Thanks for the clarification, Robert. I think I understand now. I have not read many of the early marginalists in the original, and I thought of Marshall as unusual among them. It seems this was an unmerited assumption.