On the Theoretical and Institutional Roots of Post-Keynesian Economics

ABSTRACT

This article explores both the institutional and theoretical roots of post-Keynesian economics, treated separately. I argue that while there seems to be two accounts of the institutional roots, each emphasize a different narrative and can be reconciled. As for the theoretical roots, I argue that ‘everything started with the Accumulation of Capital’ — Joan Robinson’s so-called Magnum Opus. The book contains all the elements of what characterizes post-Keynesian economics today.

KEYWORDS:

• Post-Keynesian
• Joan Robinson
• Accumulation of Capital
• institutional roots
• theoretical roots

JEL CODES:

• B22
• B31
• B50
• B59
• E12

Acknowledgement

The writing of this paper benefited greatly from discussions I had with a number of scholars. I would like to thank Esteban Pérez Caldentey, Francis Cripps, John King, Jan Kregel, Peter Kriesler, Marc Lavoie, Maria Cristina Marcuzzo, Wesley Marshall, Murray Milgate, Edward Nell, Sergio Rossi, and Thanos Skouras for insightful comments, without implicating them for any errors or omissions. All errors remain mine.

Disclosure Statement

No potential conflict of interest was reported by the author(s).

Notes

1 In a letter to Robert Gordon, in 1974, Eichner was already claiming that ‘Post-Keynesian theory, based on the pioneering work of Roy Harrod, Joan Robinson, Nicholas Kaldor, Piero Sraffa, Michel [sic] Kalecki and Luigi Pasinetti, represents a coherent, fully developed alternative to the neo-classical theory which predominates in this country’ (see Lee 2000e, p. 181).

2 Note that post-Keynesian is spelled throughout with a hyphen, except when it appears without a hyphen in an original quote.

3 A great omission in this article is a discussion over the capital controversies and their rightful place in the development of post-Keynesian economics. However, this deserves a full airing of its own.

4 I remember in the late 1990s, while still a doctoral student at the New School, how I lamented that students/scholars of my age could not benefit from attending summer schools, like Trieste. The same can certainly not be said today.

5 For this section, I benefited from discussions with Edward Nell, on 31 August 2021.

6 Davidson (2003–2004, p. 255) argues that this cacophony of opinions and voices, ‘or the purveyors of different schools of thought … was to contribute to the marginalizing of Post Keynesianism by the orthodox mainstream Establishment of the profession.’

7 These groups still exist today, and many members move freely among these various groups or belong to several of these diverse groups, reflecting perhaps the more eclectic nature of post-Keynesian economics, though that is a subject of another paper.

8 Though published much later, Nell (1980) was a direct result of the New Orleans 1971 meetings. Nell states clearly that ‘[t]his book of essays was conceived at the 1971 convention of the American Economic Association, at a meeting called by Joan Robinson for those dissatisfied with orthodox economics. Hence in a very real sense, this book is a tribute to her, and to the influence she has exercised over the profession. Her influence in one form or another has been decisive in shaping a new and critical approach to economics. All of us would like to take this occasion to honor her contributions to the field’ (Nell 1980, dedication, italics not in original).

9 Note that the expression ‘post-Keynesian’ itself was used both by Kaldor (1956) and Robinson (1960). In a footnote, Kaldor (1956, p. 98, fn 2) stated that ‘[i]n fact the whole of the Keynesian and post-Keynesian analysis dodges the problem of the measurement of capital’. According to Robinson (1960, p. xiii), ‘[my research] belongs to the field of what is sometimes called post-Keynesian economics.’ According to King (2002, p. 9), however, it was used in a chronological sense: ‘When Robinson wrote of ‘post-Keynesian economics’ (Robinson 1960a; p. xiii) [see Robinson 1960], she was referring to her own theoretical work and that of Cambridge colleagues like Kahn and Kaldor.’ Yet, an argument can be made that this chronological use of the work oddly enough corresponds to the work of the founding members of the school itself. Only a decade later, as argued above, was Robinsons using the expression to refer specifically to a school of thought. In Kaldor’s quote, the chronological nature of the use of the term is perhaps more evident.

10 While Robinson did write the 11-page Foreword to the book, she was not that enthusiastic about it. In a letter to Paul Davidson, she admits that ‘I am rather bothered by the way Al Eichner sets up as spokesman for what all Post Keynesians think and then slips in fancy ideas of his own. I hope you are keeping an eye on him’ (quoted in Lee 2000, p. 39, fn 42).

11 Lee (2000, p. 39, fn 44) says that Luigi Pasinetti was also in attendance, although his name does not appear on Lee’s (2000d, p. 150) list. In an email dated 18 August 2021, Mario Seccareccia confirms Pasinetti was not there.

12 The original name of the journal was to be the Cambridge Journal of Political Economy (see Saith 2022).

13 This version of the origins of the CJE appears in many writings. However, in a private email dated 12 November 2021, Murray Milgate disputes this claim: ‘the idea that the CJE somehow emerged to replace the EJ when its editorial office moved away from Cambridge might be viewed with a healthy degree of scepticism. I have not been able to find the origin of this claim, and it may be interesting to discover where that story comes from. Furthermore, I never heard any of the original activists (Ajit Singh, Suzie Payne, Frank Wilkinson, John Eatwell, Bob Rowthorn et al.) suggest that this was their motivating impulse.’ Saith (2022), who repeats the EJ story, also quotes Eatwell, who says the idea of creating a journal goes back to around 1965 or so.

14 As noted in footnote 13, however, the notion of creating a journal goes back further.

15 Just like the JPKE was started with a grant from JK Galbraith, the CJE received a financial grant from Piero Sraffa.

16 King (2008, p. 143) contradicts this statement claiming the Weintraub senior was in Cambridge in 1957 (and again in 1963) and had lunch with Joan Robinson. We have no way of knowing whether there was any discussion over, say, the Accumulation of Capital, but the conversation would have surely covered key topics in economics. King also chronicles many instances of correspondence between Weintraub and Kahn, and Robinson during the 1960s.

17 This is contradicted by King (2002, p. 110), who argues that Weintraub ‘shifted his position on several issues in response to her.’ Rima (1991, p. 4) claims that Weintraub was one of Robinson’s ‘champions, apostles and kindred spirits’ in America, and had ‘taken on … Robinson’s intellectual mantle.’ Robinson, according to Rima (p. 5), ‘substantially influenced’ Weintraub’s thinking.

18 What is needed now is more research to carefully weave together these two narratives into a single, streamlined history.

19 As told to me by Francis Cripps., in an email. dated 25 November 2021.

20 There was continued reflection, of course. Notably, Keynes and Harrod had considerable correspondence (see Perez Caldentey 2019). As Caldentey reminded me in an email, the idea of a clearing union, for instance, is the result of discussions that took place during this period, as was the use of aggregate demand and national accounts.

21 Thanks to Marc Lavoie for this short list of publications.

22 I am grateful to Pablo Bortz for such a wonderful expression.

23 In an email dated 4 October 2021, Nell tells me he arrived at Oxford in 1957, and The Accumulation of Capital was being widely discussed: ‘the AC was already the basis of really serious controversy’, and he read it immediately and ‘was very impressed.’

24 I thank Jan Kregel for this information.

25 In a personal email, 15 November 2021.

26 I would like to thank Marc Lavoie for this insight.