Friday, January 25, 2019

Donald J. Harris

Don Harris is a Stanford economist. Apparently, this post is on current events. His daughter, Kamala Harris is the junior senator from California and has announced that she is running for President of the United States. I gather Don and his wife divorced when Kamala was quite young, and that his ex-wife raised her.

I do not know much about Harris' personal history. I did not even know that he was Jamaican. Did he give Michael Manley any advice? (This is a great movie.) It is his more theoretical work that I am aware of. It is decades since I have read his AER article and book, and I do not recall much about them. I find that I happen to have handy the other five items in the reference below, including Harris' foreword to a reprint of the Bukahrin book.

If I do remember anything about the AER article, my impressions is that it is an overview of the Cambridge capital controversy, closer to Sraffa than Joan Robinson's emphasis on historical time. For purposes of this article, I'll talk about, rather, the article in Nell's 1980 collection.

Harris (1980) starts out by describing the aggregate neoclassical theory, including growth theory. He refers to Samuelson calling it a parable or fairy tale. He presents this theory in the context of a response to Harrod. Substitution of capital for labor allows for the existence of a stable steady state growth path. Of course the Cambridge capital controversy showed this parable does not apply once one allows for the production of more than one commodity. I like to put it that, in a comparison of steady states, a higher wage, all else equal, is not necessarily associated with the adoption of a technique requiring less labor to be employed per unit output. Harris suggests the existence of such non-monotonic relationships between inputs and prices has wider repercussions in the neoclassical theory of general equilibrium. Asserting that the price of each input is equal to the value of its marginal product doesn't get you very far.

Harris then moves on to considering an alternate theory, with labor being exploited, as in Marx. He has an independent investment function. He considers three possible regimes. I am reminded of some work of Joan Robinson in the 1960s and her "banana" diagram. Or looking ahead, to a Bhaduri and Marglin paper.

Harris, I guess, is closer to Marx than some Post Keynesians. It make sense that once one has seen that most of academic mainstream economics is nonsense, in many ways, that one would turn to a sociological explanation of why this balderdash persists. The leisure class, in Bukharin's terminology, consists of those, generally very rich, who obtain income from property, without having to do a lick of work. They need it to be commonsense that their exploitation be acceptable. Academics, particularly neoclassical economics, fill this need. Bukharin focuses specifically on Austrian economics.

I should probably reread Bhaduri and Harris (1987). It is the sort of article that needs an illustration or two. Such an illustration is easy to generate with the information technology we now have available.

(Gramsci's Political Thought (Brill, 2012), by Carlos Nelson Coutinho, is another book on my shelf. The foreword is by Joseph A. Buttigieg. His son, Pete, is mayor of South Bend, Indiana and just announced that he is running for President.)

References
  • Amit Bhaduri and Donald J. Harris (1987). The Complex Dynamics of the Simple Ricardian System. Quarterly Journal of Economics. (Reprinted in: Unconventional Economic Essays: Selected Papers of Amit Bhaduri (1993). Oxford University Press.)
  • Nikolai Bukharin. (1927). Economic Theory of the Leisure Class.
  • Donald J. Harris (1973). Capital, distribution, and the aggregate production function, American Economic Review 63 (1): 100-113. (reprinted? in Sraffian Economics, 2 volumes, (ed. by Ian Steedman) Edgar Elgar (1989)).
  • Donald J. Harris (1978). Capital Accumulation and Income Distribution. Stanford University Press.
  • Donald J. Harris (1980). A postmortem on the neoclassical 'parable'. In Growth, Profits, and Property: Essays in the Revival of Political Economy (ed. by E. J. Nell). Cambridge University Press
  • Donald J. Harris (1990). Comment (on Pasinetti). In Essays on Piero Sraffa: Critical Perspectives on the Revival of Classical Theory (ed. by K. Bharadwaj and B. Schefold). Routledge
  • Donald J.Harris (2005). Robinson on 'History versus equilibirum'. In Joan Robinson's Economics: A Centennial Celebration (ed. by B. Gibson). Edward Elgar.

2 comments:

monerty 01 said...

whats your view on this recent paper that just came out ( The Microeconomic Foundations of Aggregate Production Functions) ' ' The outline of the paper is as follows. In Section 2 we set up the basic model, introduce the aggregate cost and production functions as dual ways of representing an economy’s production possibilities, and define the notions of macroeconomic elasticities of substitution between factors and of the bias of technical change. In Section 3, we define and characterize the properties of aggregate cost functions for the case of nested-CES economies. In Section 4, we define and characterize the properties of aggregate production functions for the case of nested-CES economies. In Section 5, we review some classic aggregation theorems and provide new ones. We revisit the Cambridge-Cambridge controversy, and represent some of the classic arguments via our framework and language. In Section 6, we provide some simple theoretical examples to illustrate the results developed in Sections 3 and 4: Hicksian and non-Hicksian examples with two and three factors; an example showing how to capture Houthakker (1955) within our framework; and an example of factor-biased technical change in a task-based model. We also present a simple quantitative application to capital-skill complementarity a la Griliches (1969) in the US economy, ` taking into account the multiplicity of sectors and their input-output linkages. We put it to use to revisit the analysis in Krusell et al. (2000) of the role of these complementarities in the evolution over time of the skill premium. In Section 7, we consider several extensions. First, we generalize the results of Sections 3 and 4 to non-nested-CES economies with two simple tricks. Second, we explain how to use our results to separate technology from final demand by characterizing the aggregate distance and associated cost functions. Third, we explain how to generalize our results to economies where final demand is nonhomothetic and with distortions. We conclude in Section 8'' https://scholar.harvard.edu/files/farhi/files/microfoundations_production_functions.pdf

Robert Vienneau said...

I skimmed through it, and did not absorb it. The most exciting thing about it, I guess, is that a MIT economist wrote it. I suppose it would be nice to have rigorous criteria to aggregate, but capital, as evaluated in numeraire units, is not an input into production functions.