Saturday, June 27, 2020

A Bowles Taxonomy For Economists

Katzner, Bowles, and Resnick on UMass Amherst

Shortly after about 32:30 minutes, Sam Bowles, to laughter, draws a Venn diagram on the board. This is a light talk, and Bowles is explicitly describing economics from his own experience at the University of Massachusetts at Amherst. Bowles places various economists in various subsets. I have varied the names a bit in my reproduction below.

Bowles' Taxonomy

I take the universe to be the set of all economists. Or, maybe, given Bowles includes John Rawls, it is a set of academics concerned with topics Bowles thinks economists should be concerned with. I take it that this taxonomy is not to apply to all time and space, but maybe only to academics from about 1970 to now. I explicitly added Kenneth Arrow, Milton Friedman, and Paul Samuelson as examples of economists that do not fall into any of the three numbered subsets. One might think Arrow extended the domain of economics to include voting, social choice, and health economics. So he illustrates my point about this taxonomy being time-bound. For all its originality, I do not think Samuelson's work on revealed preferences, the Heckscher-Ohlin-Samuelson model of international trade, or a model of overlapping generations, for example, can be said to have extended the domain of topics covered by economics.

Anyways, the three sets are those economists:

  1. Who are critical of neoclassical economics.
  2. Who want to extend the fields or topics to which economics applies.
  3. Who are critical of capitalism.

Bowles talks about the intersection of the three sets as "us". I expanded that to label the intersection of four who I think exemplify radical political economics, as developed at UMass. In the talk, Bowles names more for some of the intersections, and, of course, the UMass economics department included more radicals.

By the way, I think the contrast about what they have to say in these talks at UMass about (Neo) Walrasian General Equilibrium Theory (GET) with what John Eatwell has to say of interest. Bowles and Resnick say that economists have now rid themselves of GET, but they have replaced it with "nothing". Mainstream economics, in some sense, have nothing to say nowadays about how the system works as a whole. And they continue to teach the old, outdated stuff to students.

Sunday, June 21, 2020

Economics Of Race And Other Economics For Others

Do economists have anything to say about racism in the United States? Some do. The Review of Black Political Economy, for example, exists.

Other groups in the United States are often thought of as marginalized. I have written about women in economics before. As usual, I want to mention the existence of the International Association for Feminist Economics and their journal Feminist Economics. I also note the existence of Queer Economics: A Reader for those economists that might be of a questioning bent.

Discourse in many academic disciplines about the Other often draw on post-modernism, post-structuralism, and other scary stuff. Some economists have attempted to extend Marxism to engage with postmodernism. Although I have read a bit of David Ruccio and Jack Amariglio, I do not know much about this. I suppose the journal Rethinking Marxism would be worth exploring if you want to know more.

I also do not know much about certain fields, such as development economics, economics of education, labor economics, and urban economics. But I would expect to find much more in their journals relevant to our current sad times than I would in the American Economic Review or the so-called Journal of Political Economy.

None of this has anything to say about whether or not some tenured economists at Chicago are ignorant, reactionary, and full of ressentiment.

Monday, June 15, 2020

Some Positions Some Take On Sraffa's Book

This post lists some views on Production of Commodities by Means of Commodities: A Prelude to a Critique of Economic Theory.

  • The quantity flows Sraffa takes as given are those observable in an actual economy at a given time, as with a snapshot (Roncaglia 1978).
  • These quantity flows, on the contrary, are at the level of effectual demand (Garegnani 1990).
  • These quantity flows are for an economy in a self-replacing state.
  • The assumption of constant returns to scale is necessary for drawing any interesting conclusions from Sraffa's work (Samuelson 1990, Samuelson 2000).
  • Market prices tend towards or orbit around Sraffa's prices of production in a process akin to gravitational attraction (Garegnani 1990).
  • Sraffa's book is an investigation of logical consequences in a system of prices of production, akin to reasoning in geometry; no claims are put forth about tendencies or paths of market prices (Sinha 2012).
  • Sraffa started, in the 1920s, in his research for his 1960 book from labor values and Marx's schemes of reproduction in Volume 2 of Capital (De Vivo 2003 and Gilibert 2003).
  • Sraffa began, on the contrary, with a formalization of prices in terms of physical real cost; labor values are a corruption of this notion of real costs and Sraffa was not originally inspired by Marx in his economics (Gehrke and Kurz 2006).
  • Sraffa showed that labor values are unnecessary and redundant for defining prices of production (Steedman 1981).
  • Sraffa, on the contrary, vindicated Marx in his work (Porta 2012 and Bellofiore 2014).
  • Sraffa's work cannot be set in historical time (Robinson 1985).
  • Sraffa, for methodological reasons, rejected counterfactual reasoning and thus the marginal revolution (Sen 2003).

Some of the above statements are probably stated more strongly than the referenced scholars might endorse. I am also not at all sure those are the best references. They certainly are not the most up-to-date. It is clear at any rate that the Cambridge Capital Controversy was not solely about difficulties in aggregating capital and that Sraffa's approach to economics cannot be subsumed by general equilibrium theory (Hahn 1982).

  • Bellofiore, Riccardo. 2014. The loneliness of the long distance thinker: Sraffa, Marx, and the critique of economic theory. In Bellofiore and Carter (2014).
  • Bellofiore, Riccardo and Scott Carter. 2014. Towards a New Understanding of Sraffa: Insights from Archival Research. New York: Palgrave Macmillan.
  • Bharadwaj, Krishna and Bertram Schefold (eds.). 1990. Essays on Piero Sraffa: Critical Perspectives on the Revival of Classical Theory. London: Unwin Hyman.
  • de Vivo, Giancarlo. 2003. Sraffa's path to Production of Commodities by Means of Commodities. An interpretation. Contributions to Political Economy 22 (1): 1-25.
  • Garegnani, Pierangelo. 1990. Classical versus Marginalist Analysis. In Bharadwaj and Schefold (1990).
  • Gehrke, Christian & Heinz D. Kurz. 2006. Sraffa on von Bortkiewicz: Reconstructing the classical theory of value and distribution. History of Political Economy 38 (1): 91-149.
  • Gilibert, Giorgio. 2003. The equations unveiled: Sraffa's price equations in the making. Contributions to Political Economy 22 (1): 27-40.
  • Hahn, Frank H. 1982. The neo-Ricardians. Cambridge Journal of Economics 6: 352-374.
  • Kurz, Heinz D. (ed.). 2000. Critical Essays on Piero Sraffa's Legacy in Economics. Cambridge: Cambridge University Press.
  • Porta, Pier Luigi. 2012. Piero Sraffa's early views on classical political economy. Cambridge Journal of Economics 36: 1357-1383.
  • Robinson, Joan. 1985. The theory of normal prices and the reconstruction of economic theory.
  • Roncaglia, Alessandro. 1978. Sraffa and the Theory of Prices (trans. by J. A. Kregel). New York: John Wiley & Sons.
  • Samuelson, Paul A. 1990. Revisionist findings on Sraffa. In Bharadwaj and Schefold (1990) and reprinted in Kurz (2000).
  • Samuelson, Paul A. 2000. Sraffa's hits and misses. In Kurz 2000.
  • Sen, Amartya. 2003. Sraffa, Wittgenstein, and Gramsci. Journal of Economic Literature 41: 1240-1255.
  • Sinha, Ajit. 2012. Listen to Sraffa's silences: a new interpretation of Sraffa's Production of Commodities. Cambridge Journal of Economics 36 (6): 1323-1339.
  • Steedman, Ian. 1981. Marx after Sraffa. London: Verso.

Saturday, June 13, 2020

A John Eatwell Lecture

John Eatwell On Why Economists Disagee

I like the above lecture by John Eatwell. He concludes by talking about the partial equilibrium model of supply and demand "that we teach, and we justify it by the general equilibrium model". He notes that lots of economists put imperfections in. The Arrow-Debreu is currently the fundamental model of price theory among mainstream economists. According to Eatwell, economists fall into at least five groups.

  • Those who think revisions are important to retain market rationality and try to find ways to make the model work, for example, with representative agents in Dynamic Stochastic General Equilibrium models.
  • Those who think reasonable, empirically-based imperfections can be used to produce practical models.
  • Those who find things that fit empirically and don't worry too much about the explanation. For example, consider the Solow growth model.
  • Those, the top econometricians, who simply study economic variables, without a lot of theory.
  • In despair, those who are trying to analyze economic variables in entirely new ways, for example, behavioral economists, Colin Cameron.

Economics today is a catalogue of results and models built around a core, the Arrow-Debreu model, the results of which nobody believes. "And we ignore the long run. Economists have a theoretical core, which we don't use, or we modify to take away from its essence, or we don't believe it."

I think that many mainstream economists will refuse to tell an outsider that that is the state of mainstream economics today.

Tuesday, June 09, 2020

A Letter To Sraffa Long Before Google

At this time, the book had long ago been published by Cambridge University Press. I suppose I ought to review whatever conditions exist on transcribing stuff in the archives. The following is D3/12/111:9.

Routledge & Kegan Paul Ltd.

October 15th 1969

Professor Piero Sraffa,
Trinity College,

Dear Professor Sraffa,

At the Frankfurt Book Fair last week, Einaudi told me about your "Produzione di merci a mezzo di merci".

I don't know whether this has been published in English, but if not, we would be very interested in publishing it.

Yours sincerely,

Norman Franklin

Tuesday, June 02, 2020

Extracts From LBJ Announcement Of The Appointment Of The Kerner Commission

My fellow Americans:

We have endured a week such as no Nation should live through: a time of violence and tragedy.

For a few minutes tonight, I want to talk about that tragedy - and I want to talk about the deeper questions it raises for us all.

I am appointing a special Advisory Commission on Civil Disorders.

Governor Otto Kerner, of Illinois, has agreed to serve as Chairman, Mayor John Lindsay, of New York, will serve as Vice Chairman...

The Commission will investigate the origins of the recent disorders in our cities. It will make recommendations - to me, to the Congress, to the State Governors, and to the Mayors - for measures to prevent or contain such disasters in the future.

But even before the Commission begins its work; and before all the evidence is in, there are some things that we can tell about the outbreaks of this summer.

First - let there be no mistake about it - the looting, arson, plunder and pillage which have occurred are not part of a civil rights protest. There is no American right to loot stores, or to burn buildings, or to fire rifles from the rooftops. That is crime - and crime must be dealt with forcefully, and swiftly, and certainty - under law...

Those charged with the responsibility of law enforcement should, and must, be respected by all of our people. The violence must be stopped: quickly, finally, and permanently.

It would compound the tragedy, however, if we should settle for order that is imposed by the muzzle of a gun.

In America, we seek more than the uneasy calm of martial law. We seek peace based on one man's respect for another man - and upon mutual respect for law. We seek a public order that is built on steady progress in meeting the needs of all our people.

Not even the sternest police action, nor the most effective Federal Troops, can create lasting peace in our cities.

The only genuine, long-range solution for what has happened lies in an attack - mounted at every level - upon the conditions that breed despair and violence. All of us know what those conditions are: ignorance, discrimination, slums, poverty, disease, not enough jobs. We should attack these conditions - not because we are frightened by conflict, but because we are fired by conscience. We should attack them because there is simply no other way to achieve a decent and orderly society in America...

This is not a time for angry reaction. It is a time for action: starting with legislative action to improve the life in our cities. The strength and promise of the law are the surest remedies for tragedy in the street.

But laws are only one answer. Another answer lies in the way our people will respond to these disturbances.

There is a danger that the worst toll of this tragedy will be counted in the hearts of Americans; in hatred, in insecurity, in fear, in heated words which will not end the conflict, but prolong it.

So let us acknowledge the tragedy; but let us not exaggerate it...

-- Lyndon Baines Johnson, 27 July 1967

The Kerner Commission concluded, among many other things, "Our nation is moving toward two societies, one black, one white - separate and unequal."