Download Post-Keynesian policies for modern capitalism G.C. Harcourt Jesus

Post-Keynesian policies for modern capitalism
G.C. Harcourt
Jesus College
Cambridge
I
Maynard Keynes’s best known remark is: “In the long run we are all dead” (Keynes
(1923); C.W., vol. IV, 1971, 65, emphasis in original). This led an IMF wit some years ago to
crack: “Well, he’s dead and we’re in the long run”. Though Keynes’s remark is well known,
its context is not. It occurs in his 1923 Tract on Monetary Reform in which he is cheeking his
old teacher, Alfred Marshall. For he continued: “Economists set themselves too easy, too
useless a task if in tempestuous seasons they can only tell us that when the storm is long past
the ocean is flat again” (65). He was arguing for a change in emphasis, from concentrating on
the economics of the long period, of the long-period determination of normal competitive
equilibrium prices and quantities by the forces of supply and demand, Book V of Marshall’s
Principles, then the bible of most English-speaking economists, to more attention to analysis
of, and policy for short-run happenings. But, just before he died, in his last article in the
Economic Journal, in speeches to the House of Lords and at his Political Economy Club at
Cambridge (by then presided over by Dennis Robertson), he bemoaned the fact that the
pendulum had swung too far the other way, to an undue concentration on the short period and
the neglect of fundamental and lasting truths to be found in the insights of our founder Adam
Smith and Keynes’s own mentor, Marshall.1
If all this has a familiar and topical ring to it, so it should, as we are in the middle of
the most serious crisis in the interrelated capitalist world since the 1929–1930s depression
years. We have witnessed in recent decades undue concentration by decision-makers, not
least in the private sector, the stock exchanges and the foreign exchange markets, on the short
term and a relative neglect of the long-term consequences of their decisions. This has been
reinforced by technical innovations which have had the effect in many areas of shrinking the
length of the short run from months, or even years to weeks, or even days or hours.
While these “real world” events have been unfolding we have also seen a major
change in the characteristics of the dominant mainstream analysis of the economy, a return to
what Joan Robinson (1964) called many years ago, “Pre-Keynesian theory after Keynes”.
Starting with Friedman and the monetarists, and reinforced by Hayek’s philosophical views,
we have seen, if not the overthrow then at least the very considerable downgrading of
Keynes’s and the Post-Keynesian’s “vision” and analysis of the world. At the same time the
contributions of another great interpreter of the essential fundamentals of the capitalist
process have virtually vanished, for illogical reasons. The overthrow of the so-called socialist
economies of Eastern Europe and of the Communist regime of the former USSR do not in
themselves refute Marx’s insights into how capitalism works, though it was and is so
interpreted, not least by Mrs Thatcher as she then was. Yet I have argued that Keynes,
Kalecki and Marx, were they still with us, would have made far more sense of what has been
happening over the last 30 years and more than do the Lucasians, modern classical
macroeconomists, the inappropriate application of Frank Ramsey’s model, or even the New
Keynesians’ concentration on imperfections. Not least does Marx come into his own with his
insight that when financial capital is out of kilter with industrial and commercial capital,
instability and crises are likely to result, see Harcourt (2007a).
II
Before setting out the framework of analysis that lies behind the policy proposals I
shall tentatively suggest, I first pay tribute to, in particular, my Australian mentors, Eric
Russell and Wilfred Salter. Because they both died far too young (Salter when he was 34,
Eric at 55) and because Eric did not publish a lot, their contributions may not be as well
known as they should be. What I write is very much influenced by them and by my
Cambridge mentors, especially Joan Robinson, Richard Kahn, Nicky Kaldor, Piero Sraffa,
Dick Goodwin and Luigi Pasinetti. Last but certainly not least, discussions with Philip
Arestis and reading his papers have much influenced my approaches to economic theory and
policy.
Before setting out policies, I need to sketch the characteristics of a post-Keynesian
analysis of the processes at work in modern capitalism. What Joseph Schumpeter called
“vision” and its implications for analysis have profound effects on what policies to propose.
I start by quoting Joan Robinson (1978; C.E.P., vol. V, 1979, 210): “To me, the
expression post-Keynesian has a definite meaning; it applies to an economic theory or
method of analysis which takes account of the difference between the future and the past”
(emphasis in original). So we start by asking how key decision-makers behave, sometimes
sensibly, sometimes not, in an environment of inescapable uncertainty, themes about which
Keynes wrote incisively in The General Theory. Witness his account in Chapter 12 of the
working of the stock exchange in different situations and economies:
If I may be allowed to appropriate the term speculation for the activity of forecasting
the psychology of the market, and the term enterprise for the activity of forecasting
the prospective yield of assets over their whole life, it is by no means always the case
that speculation predominates over enterprise. As the organisation of investment
markets improves, the risk of the predominance of speculation does, however,
increase. In … New York, the influence of speculation … is enormous. Even outside
the field of finance, Americans are apt to be unduly interested in discovering what
average opinion believes average opinion to be; and this national weakness finds its
nemesis in the stock market. It is rare … for an American to invest, as many
Englishmen still do, “for income”; and he will not readily purchase an investment
except in the hope of capital appreciation. This is only another way of saying that,
when he purchases an investment, the American is attaching his hopes, not so much to
its prospective yield, as to a favourable change in the conventional basis of valuation,
i.e. that he is … a speculator. Speculators may do no harm as bubbles on a steady
stream of enterprise. But the position is serious when enterprise becomes the bubble
on a whirlpool of speculation. When the capital development of a country becomes a
by-product of the activities of a casino, the job is likely to be ill-done. The measure of
success attained by Wall Street, regarded as an institution of which the proper social
purpose is to direct new investment into the most profitable channels in terms of
future yield, cannot be claimed as one of the outstanding triumphs of laissez-faire
capitalism – which is not surprising, if … the best brains of Wall Street have been in
fact directed towards a different object.
(Keynes 1936; C.W., vol. VII, 1973, 158–9,
emphasis in original)
Secondly, there is a vast divide between how post-Keynesians think of how markets,
indeed, systems as a whole, behave, on the one hand, and the mainstream view, on the other
(though there has been some convergence in recent years with the emergence of pathdependent processes, hysteresis, and so on). Nevertheless, there is still a stranglehold of
equilibrating notions on the mainstream in contrast to the increasing emphasis on cumulative
causation processes by post-Keynesians. (Cumulative causation originated in Adam Smith’s
writings, was brought into the modern age by Kaldor’s teacher at LSE, Allyn Young, Kaldor
himself, and, independently, by Gunnar Myrdal.) For many years I have illustrated the
difference by a wolf pack analogy (which may be untrue of their actual behaviour – I am not
a zoologist) but is, I believe, an accurate description of the respective economic theories).
The mainstream approach is that akin to a wolf pack running along. If one or more
wolves get ahead or fall behind, powerful forces come into play which return them to the
pack. (The parallels with the existence of a unique equilibrium that is stable, and that the
forces responsible for existence are independent of those responsible for stability are, I hope,
obvious.) The other approach has it that the forces acting on the wolves who stray make them
get further and further ahead or fall further and further behind, at least for long stretches of
time. (This also corresponds with Goodwin’s and the late Kalecki approach that the trend and
cycle are indissolubly mixed, not separable concepts determined by independent factors, see ,
for example, Goodwin (1967), Kalecki (1968), Harcourt (2006)).
Why does the difference matter for policy? Let me illustrate this with Friedman’s case
for freely floating exchange rates, Friedman (1953). Underlying his arguments is the first
wolf pack analogy, that in a competitive setting there exists a set of stable long-period
exchange rates that quickly would be found and kept by a free float. In this setting the
systemic effects of speculation would be beneficial, for speculators with their superior
knowledge, intelligence and information would help the market to reach the equilibrium
pattern more quickly than in their absence, and to sustain it there.
But suppose the second scenario is at least the more correct description of how
foreign exchange markets work. Then there is no set of stable long-period rates “out there”
waiting to be found so that now a float combined with speculation will be systemically
harmful, accelerating the movements away in both directions of exchange rates from one
another and also of systems, at least for long periods of time. The second scenario is more
akin to what has happened over recent decades, and provides the rationale for various
schemes suggested to curb the actions of speculators.
Next, consider a lesson from Marx, Keynes and Kalecki which was put most neatly by
James Meade: “Keynes’s intellectual revolution was to shift economists from thinking
normally in terms of a model of reality in which a dog called savings wagged his tail labelled
investment to thinking in terms of a model in which a dog called investment wagged his tail
labelled savings” (Meade 1975, 82, emphasis in original). This profound insight is often
forgotten in, for example, discussions of the coming pensions crisis, whereby all sorts of
ingenious schemes are suggested to induce more saving over people’s working lives but little,
if any, mention is made of the necessary condition for them to be successful is that
simultaneously there has to be accompanying private and public investment expenditure,
otherwise the paradox of thrift will come into its own, see Harcourt (2007b).
Next, in view of the over-, or even sole,reliance in recent years on the rate of interest
to control the economy, especially as an anti-inflationary measure, let me paraphrase a wise
saying from a very fine but much neglected economist, the late Sir Dennis Robertson:
“People tell me that the bank rate is a beautiful and delicate instrument but I think it is coarse
and blunt.” With this should be coupled the insightful comment of the late Tommy Balogh
that “Monetarism is the incomes policy of Karl Marx” (Balogh 1982, 77). He meant, of
course, that the manipulation of either the quantity of money and/or the rate of interest
through monetary policy has its (uncertain) effects on inflation and activity by its impact on
employment, that the creation of a cowed and quiescent workforce by making the sack an
effective weapon reduces money-wage demands and so reduces one major cause of inflation.
Michal Kalecki was one of the first political economists to articulate this truth. In his
famous paper, “Political aspects of full employment” (published in 1943!), he analysed the
essential difference in the political economy of getting back to full employment after a deep
slump when all classes and vested interests would be in an (uneasy) accord, on the one hand,
and the political economy of sustaining full employment, on the other, when what I call the
Kaleckian dilemma occurs. Kalecki wrote of the second situation:
the maintenance of full employment would cause social and political changes which
would give a new impetus to the opposition of the business leaders [to full
employment]. Indeed, under a regime of permanent full employment, the sack would
cease to flag its role as a disciplinary measure. The social position of the boss would
be undermined and the self-assurance and class-consciousness of the working class
would grow. Strikes for wage increases and improvements in conditions of work
would create political tension … true … profits would be higher under a regime of
full employment than they are on average under laisser-faire, and even the rise in
wage rates resulting from the stronger bargaining power of the workers is less likely
to reduce profits than to increase prices, and thus affect adversely only … rentier
interests. But ‘discipline in the factories’ and ‘political stability’ are more appreciated
than profits by the business leaders. Their class instinct tells them that lasting full
employment is unsound from their point of view, and that unemployment is an
integral part of the normal capitalist system.
(Kalecki 1943;. C.W. Vol. I, 1990, 351, emphasis in original)
I now draw on an insight by another great economist, John Hicks, whose insight
concerning “Snatchers” and “Stickers”, when writing on imperfect competition in the 1950s,
Hicks (1954), helps to illuminate the recent behaviour of banks and other financial
intermediaries. If I may be indulged, I quote here from the paper I presented in 1998 at the
Conference in Bergamo in honour of Hy Minsky (Harcourt 2000; 2001a, 201–202).
Hicks presented a period analysis of price setting and identified when it would be
‘safe’ always to maximise short-period or immediate expected profits … to snatch
completely what was immediately available, regardless of the consequences …. This
… was contrasted with [a situation] where it would be necessary to take into account
the longer-term consequences of snatching now … [T]he objective then became the
maximisation of long-term expected profits, to stick [not] snatch, so foregoing some
immediate opportunities because of … negative feedbacks on consumer goodwill, for
example, in future periods. I cite Hicks’s article … because … commercial banks all
around the world … have behaved more like Snatchers than Stickers in their lending
behaviour, notably over the past twenty to thirty years [and more]. This has had
disastrous consequences … for their customers and even themselves, [and] for the
performance of the system as a whole. … [T]he conventional view of bankers [used to
be] that they are sound, cautious, conservative people … But their actions in recent
years belie such a stereotype; in fact they [are] either over optimistically euphoric
about economic situations and lend accordingly – lots – without proper assessments
of risks or credit-worthiness generally, or they are unduly pessimistic …, calling in
loans without any regard to the medium- to long-term viability and soundness of their
customers’ situations. This behaviour … has also been characteristic of non-banking
financial institutions over the same period … [T]heir behaviour has served
significantly to reinforce the cyclical processes which Minsky identified in Keynes’s
system.
The essence of Minsky’s message was that investment expenditure is planned in
anticipation of future cash flows, that finance is raised to make the investment possible, so
building inescapable future commitments into balance sheets, extra liabilities on which extra
interest and other payments have to be paid regardless of actual outcomes. One of Keynes’s
greatest insights, on which Minsky has built, was that apart from the state of long-term
expectations, availability of finance, not saving, is the binding constraint on investment
expenditure – a corollary of Meade’s remark quoted above and set out by Keynes in 1937 in
his discussions of the finance motive, see Keynes 1937a, 1937b; C.W., vol. XIV, 1973, 201–
23. So a major post-Keynesian tenet is that there is an inescapable logical sequence of finance
→ investment → saving, a proposition going by default in much recent discussion of both
national and international processes, see Dalziel and Harcourt 1997; Harcourt 2001a, 72–87.
Returning to Minsky’s analysis, if therefore actual cash flows turn out to be different
from what was expected, because of the certain commitments, their effect is to accentuate the
inescapable real fluctuations of the economy (if actual events exceed expected, in an upward
direction, if they are less, in a downward direction). With banks and other financial
intermediaries being overall often irresponsible Snatchers, fluctuations both real and financial
have been greatly enhanced.
A final consideration which characterises post-Keynesian analysis arose first in the
work of Roy Harrod who laid the foundations of the modern theory of growth. In his
pioneering article (1939) and book (1948), he distinguished between the demand side of
growth, principally with his concept of the warranted rate of growth (gw) and the supply side
with his concept of the natural rate of growth (gn). The factors which determined gn, were
argued to be (or at least treated as if they were) independent of those determining gw. gn itself
summed up the potential for long-term growth of the economy in terms of the growth and
improvement of economies’ labour forces. But the separation of gn from gw (and the expected
and actual rates of growth) is not acceptable for reasons cogently put forward by, especially,
Salter’s analysis of the rate of embodiment of new methods through investment in capital
stocks, see Salter 1960, 1965. Clearly the size of gn must be related to this. As I mentioned
before, post-Keynesians go even further by their rejection of the distinction between trend
and cycle, putting in their place theories of cyclical growth. This contrasts strongly with
modern mainstream practice where growth is discussed in supply terms independently of
demand, as though short-term fluctuations occur around a full employment trend, that is to
say, gn.
III
With this as background, what would a package deal of post-Keynesian policies look
like? (While I shall not discuss climate change policies explicitly, I assume that the policies I
suggest will take proper account of the long-term constraints that global warming and
responses to it entail.) It is to be hoped that there will be international cooperation with, and
coordination of, some of the individual policies, otherwise they would not have a chance to
succeed. It may be that unfolding current events are making these possible; but I would not
bet on it.
While it will never be possible entirely to escape from cyclical fluctuations – Dennis
Robertson again made this clear in his criticism of Keynes’s General Theory and the early
Keynesians’ emphasis on trying always to be at full employment, see Anyadike-Danes (1985)
–, the aim should be to minimise the amplitude of fluctuations and to keep average levels of
employment as near as possible to full employment, allowing for frictional, and seasonal
unemployment and the necessary flexibility associated with restructuring processes. These
last may take years to work themselves out but here Scandinavian practices are excellent
guides – retraining, early pensions, keeping communities together.
As a general rule I have come to favour spending by governments on infrastructure
being determined by medium- to long-term needs (given the philosophical stances of the
governments in power), with short-term aggregate demand puzzles being tackled by changes
in taxation. An overall tax structure which reflects equity and efficiency should be designed
and the whole structure should be jacked up or down according to the anticipated state of
aggregate demand from other sources. This view, however, has to be modified in the present
crisis, as indeed has already occurred in Australia, China, Continental Europe, the United
States and the UK (with varying degrees of enthusiasm and competence). Increases in
government expenditure associated with bringing forward plans already in the pipeline, or
waiting their turn, makes good sense. We have been presented with a golden opportunity to
do something substantial about deficiencies in social housing, city infrastructure, out-of-date
or inadequate school buildings and hospitals, transport inadequacies and so on, not to
mention reducing student-staff ratios in schools and in universities and increasing the
provision of trained people to tackle reading and writing problems, and care for the disabled
and elderly. For those who are worried about rising (especially external) debt to income
ratios, may I suggest that until unemployment falls to levels relatively close to full
employment, extra government expenditure should be financed by writing cheques on the
central banks, not by issuing new debt?
Like Keynes, Kalecki, Kaldor and Robertson, I am very sceptical about over-reliance
on changes in the rate of interest as an effective policy measure. The fiscal fine-tuners of
earlier years were undoubtedly over optimistic but what of the monetary fine-tuners in
independent central banks in more modern times? There is a lot to be said, within given
constraints, of setting relatively low interest rates and keeping them there, using other
measures to tackle short-term fluctuations and long-term needs.
In Australia we have been blessed over the years with deep analysis of a permanent
incomes policy, very much influenced by the contributions of Eric Russell and Wilfred
Salter. Their arguments used to be well-known. Allied with maintaining full employment, we
need institutions which as a start allow money incomes to be adjusted for prices and overall
productivity (reflecting the terms of trade in open economies). This would allow all citizens
to share in the rising prosperity associated with the complementary relationship between
capital and labour at the economy level. (On occasions they would take their fair share of any
decline in real standards.) Not only would this be equitable, it would also be efficient because
it hastens the disappearance of low productivity, often declining industries and enhances the
growth of high productivity, often expanding industries. The associated faster growth of
overall productivity when reflected in the increase in money incomes may serve to tackle the
Kaleckian dilemma of sustaining full employment alongside the accompanying shift of
economic, social and political power from capital to labour, see Harcourt (1997; 2001b).
Post-Keynesians are “horses for courses” analysts and so each economy would need to try to
achieve this goal through institutions which suited its sociological and historical experiences.
(In Australia we have all but destroyed the institutions which could have delivered this goal.)
The most difficult task in all these economies will be getting the currently grossly overpaid
captains of industry and finance to accept such a rule.
If we accept a cumulative causation view of the workings of markets and systems,
there is a strong case for arguing that speculation is systemically harmful, not beneficial, in
many markets. Therefore we have to design Marshallian/Pigovian carrot and stick measures
to reduce overall the amount and therefore effects of speculation. (We do not have the luxury
of authoritarian states of locking speculators up.) Here the tax system comes into play. The
Tobin tax on foreign exchange transactions is an early example of this. The overall aim
should be to reward legitimate, systemically beneficial economic activity and punish
systemically harmful activity.
In foreign exchange markets, this requires classifying overall transactions (turnovers)
on both sides of the market into useful economic purposes – trade, investment, consumption –
with the residual being prima facie speculative transactions. Overall, tax rates on transactors’
incomes should reflect penal rates associated with speculation, see Harcourt (1995). Of
course, it may still be thought profitable for individuals to speculate but the inducement is not
to. Obviously there is need for international agreement on such measures, otherwise domestic
taxpayers are induced to go offshore.
In housing markets again the tax system could be directed towards encouraging
economically and socially beneficial transactions – buying and selling (or letting and renting)
houses because of changes in employment, arrival of a family, parents coming home to live –
and discouraging speculative purchases where again penal rates of tax on incomes would
apply to both buyers and sellers. On stock exchanges Keynes advocated measures which
encourage buyers to look at the medium to long-term prospects of companies, the shares of
which they were thinking of buying or selling, that is, being Stickers. This required rewards
for the length of time shares were held, so offsetting the trend decline in the number and
lengths of marriages by making portfolios more durable and lasting, see Keynes (1936; C.W.,
vol. VII, 1973, 160–61).
For the banking system, an implication of Minsky’s analysis for policy is that central
banks should encourage trading banks to use their research departments to evaluate the
medium- to long-term prospects of those who borrow from them for both investment and
consumption purposes. This would make the granting of loans in the upturn more cautious
and responsible and the pulling of plugs in the downturn, because of short-term cash flow
problems, less frequent so, overall, reducing the amplitude of fluctuations in activity to its
inescapable real patterns. The UK government has recently (January 2009) taken some
faltering steps to implement these ideas.
For non-banking financial intermediaries, we need to induce similar behaviour from
both lenders and borrowers. The problem is that innovations in financial instruments have
been so fast and complicated that credit-rating agencies have not the skills to make
authoritative assessments of various instruments. This is especially true of derivatives and the
behaviour of hedge funds. Yet, in principle, it should be possible to classify activity in these
instruments and institutions into acceptable and not, and design tax impositions accordingly.
Indeed, if this is not possible, their activities will continue to plague the stability of
economies and attempts through policy to overcome instability and crisis.
One of the greatest tragedies of the 20th century was that the Americans (in the person
of Harry Dexter White) won out over the United Kingdom (in the person of Maynard
Keynes) at Bretton Woods. Had the latter prevailed, there would have been pressure on
creditor nations to behave, so removing inbuilt contractionary forces which have plagued the
system, and we would have had a world central bank and a world currency for settling
international transactions. Moreover, the world would have moved towards freer trade with
out necessarily accompanying free capital movements. This would have allowed a system of
fixed exchange rates with a provision for moveable pegs to have prevailed without being
destroyed by speculators with their massive inflows and outflows of “hot money.”
Today we have relatively free international capital movements but not a world central
bank or a world currency. This is an inherently unstable situation which benefits developed
economies, especially large ones, but harms developing economies, especially those only
starting development and those which are small but open. Arestis, Basu and Mallik (2005)
have argued the case for a world central bank playing a central coordinating and regulatory
role, and a world currency as a second-best solution, the only way to have “true financial
globalisation”. But, given the choice, they would not have started from there in the first place.
IV
I hope I have set out some ideas that other people might like to take up. I recently read
John King’s superb new book on Nicky Kaldor, King (2009), and I noted the overlap with his
policy proposals, especially in his last book, Kaldor (1996), which contained his 1984
Matteoli lectures. (In addition, he wanted buffer stock schemes to stabilise the prices of
primary products and two-tier exchange rates.) Keynes wanted to save capitalism from itself;
Marx (and Kalecki) thought that was impossible. Progressive people backed by Keynes’s
sensible analysis will be more likely to make Keynes’s aims achievable and prove Marx and
Kalecki wrong. (In this category I include Philip Arestis, a post-Keynesian optimist par
excellence.) Had any society been prepared to accept and allow Kalecki’s plans for
democratic socialism to prevail, that would have been a first-best solution. But, in the present
circumstances, that time sadly is past, as Prue Kerr and I recognised in our 1980 paper, “The
mixed economy”. So capitalism with a more human face is the most we can realistically hope
for.
References
Anadike-Danes, M.K. (1985), “Dennis Robertson and Keynes’s General Theory”, in G.C.
Harcourt (ed.)(1985), Keynes and His Contemporaries. Houndmills, Basingstoke,
Hampshire: Macmillan.
Arestis, Philip, Santanou Basu and Sushanta Mallick (2005), “Financial globalization: the
need for a single currency and a global central bank”, Journal of Post Keynesian
Economics, 27, 507–31.
Balogh, T. (1982), The Irrelevance of Conventional Economics, London: Weidenfeld &
Nicolson.
Editorial Introduction (2006), “Keynes’s last time at the Political Economy Club: Editorial
Introduction”, Cambridge Journal of Economics, 30, 1.
Dalziel, P.C. and G.C. Harcourt (1997), “A note on ‘Mr Meade’s Relation’ and international
capital movements”, Cambridge Journal of Economics, 21, 621–31, reprinted in
Harcourt (2001a), 72–87.
Goodwin, R.M. (1967), “A growth cycle” in Feinstein, C.H. (ed.) (1967), Socialism,
Capitalism and Economic Growth: Essays presented to Maurice Dobb, Cambridge:
Cambridge University Press.
Harcourt, G.C. (1995), Capitalism, Socialism and Post-Keynesianism. Selected Essays of
G.C. Harcourt. Cheltenham: Edward Elgar.
Harcourt, G.C. (1997), “Pay policy, accumulation and productivity”, The Economic and
Labour Relations Review, 8, 78–89, reprinted in Harcourt (2001b), 263–75.
Harcourt, G.C. (2000), “Investment expenditure, unrealised expectations and offsetting
monetary policies”, in R. Bellofiore and P. Ferri (eds.), (2000) Financial Fragility and
Investment in the Capitalist Economy. The Economic Legacy of Hyman Minsky,
Cheltenham: Edward Elgar, 69–75, reprinted in Harcourt (2001a), 197–205.
Harcourt, G.C. (2001a), 50 Years a Keynesian and Other Essays, Houndmills, Basingstoke,
Hampshire: Palgrave.
Harcourt, G.C. (2001b), Selected Essays on Economic Policy, Houndmills, Basingstoke,
Hampshire: Palgrave.
Harcourt, G.C. (2006), The Structure of Post-Keynesian Economics. The Core Contributions
of the Pioneers. Cambridge: Cambridge University Press.
Harcourt, G.G. (2007a) “The theoretical and political importance of the economics of
Keynes: or, what would Marx and Keynes have made of the happenings of the past 30
years and more” in Mathew Forstater, Gary Mongiovi and Steven Pressman (eds.),
Post-Keynesian Macroeconomics. Essays in honour of Ingrid Rima, London and New
York: Routledge, 56–69.
Harcourt, G.C. (2007b), “Markets, madness and a Middle Way revisited”, The Economic and
Labour Relations Review, 17, April, 1–10, corrected version in 18, 2007, 1–10.
Harcourt, G.C. and Prue Kerr (1980), “The mixed economy” in Jane North and Pat Weller
(eds.) (1980), Labor, Sydney: Ian Novak.
Harrod, R.F. (1939) “An essay in dynamic theory”, Economic Journal, 49, 14–35.
Harrod, R.F. (1948), Towards a Dynamic Economics: Some Recent Developments of
Economic Theory and their Applications to Policy, London: Macmillan.
Hicks, J.R. (1954), “The process of imperfect competition”, Oxford Economic Papers, 6, 41–
54, reprinted as “Stickers and Snatchers”, Ch. 12 of John Hicks (1983), Classics and
Moderns, Collected Essays on Economic Theory, vol. III, Oxford: Basil Blackwell,
163–78.
Kaldor, N. (1996), Causes of Growth and Stagnation in the World Economy, Cambridge:
Cambridge University Press.
Kalecki, M. (1943), “Political aspects of full employment”, Political Quarterly, 14, 322–31,
C.W., vol. I, 1990, 347–56.
Kalecki, M. (1968), “Trend and business cycles reconsidered”, Economic Journal, 78, 263–
76; C.W., vol. II, 1991, 435–50.
Keynes, J.M. (1923), A Tract on Monetary Reform, London: Macmillan; C.W., vol. IV, 1971.
Keynes, J.M. (1936), The General Theory of Employment, Interest and Money, London:
Macmillan; C.W., vol. VII, 1973.
Keynes, J.M. (1937a), “Alternative theories of the rate of interest”, Economic Journal, 47,
241–52; C.W., vol. XIV, 1973, 201–15.
Keynes, J.M. (1937b), “The ‘ex ante’ theory of the rate of interest”, Economic Journal, 47,
663–9; C.W., vol. XIV, 1973, 215–26.
Keynes, J.M. (1946), “The balance of payments of the United States”, Economic Journal, 56,
172–87.
King, J.E. (2009), Nicholas Kaldor, Houndmills, Basingstoke, Hampshire: Palgrave
Macmillan.
Lloyd, Ian (2006), “Summary of an Address by Lord Keynes to the Political Economy Club,
Trinity College, Cambridge on the 2nd of February 1946”, Cambridge Journal of
Economics, 30, 2-60
Meade, J.E. (1975), “The Keynesian revolution”, in Milo Keynes (ed.) (1995), Essays on
John Maynard Keynes, Cambridge: Cambridge University Press, 82–88.
Robinson, Joan (1964), “Pre-Keynesian theory after Keynes”, Australian Economic Papers,
3, 25–35.
Robinson, Joan (1978), “Keynes and Ricardo”, Journal of Post-Keynesian Economics, 1, 12–
18, reprinted in C.E.P., vol. V, 1979, 210–16.
Salter, W.E.G. (1960), Productivity and Technical Change, Cambridge: Cambridge
University Press, 2nd ed., 1966.
Salter, W.E.G. (1965), “Productivity growth and accumulation as historical processes” in
E.A.G. Robinson (ed.), (1965) Problems in Economic Development, London:
Macmillan, 266–91.
Endnotes
1
See, for example, Keynes (1946), 185–86. In the House of Lords Keynes claimed that
“There is an attempt to use what we have learnt from modern experience and modern
analysis, not to defeat, but to implement the wisdom of Adam Smith” (186). See also
Keynes’s last time at the Political Economy Club: Editorial Introduction (2006), and Lloyd
(2006).