Alessandro Roncaglia

Keynes and probability: An assessment

Abstract Most interpreters agree that Keynes had a wide-ranging, complex, ‘vision of the world’, which underlies his theoretical contributions. Whenever this is forgotten, as happens in the so-called neoclassical synthesis, not only the original Keynesian spirit goes lost but also, and especially, we lose substantive bricks for our theoretical constructions. The paper considers an important instance of this general rule; namely Keyness views on the logic of probability, meant as the field concerning human behaviour in an uncertain world (hence connected to, but distinct from, the pure theory of probability, meant as a field of mathematics). The paper begins by recalling the main aspects of the classical and frequentist approaches to probability and the main criticisms they received, pertaining among other things to the limits of their applicability. We then consider Keyness own views, stressing three aspects: the definition of probability as pertaining to the field of logic, the notion of uncertainty and of the ‘weight of the argument’, the ‘theory of groups’. We then discuss the subjective approach of de Finetti, Ramsey and Savage, and contrast it with Keyness own views. Finally, we consider the implications of our analysis for the interpretation of Keyness General Theory, and of his attitude towards econometrics.

The Sraffian schools

After briefly recalling Sraffas own contribution, the article surveys the ensuing debate, concerning both the critique of the marignalist theory, the revival of the classical approach, and the analytical contributions on specific aspects of Sraffas 1960 book. Three lines of research for a modern reconstruction of th classical approach are then illustrated: Pasinettis lsquo;Ricardianrsquo; reconstruction, Garegnanis lsquo;Marxianrsquo; reconstruction, and Sylos Labinis lsquo;Smithianrsquo; reconstruction. Finally, an assessment of these three research lines is provided, together with some suggestion for their integration.

On the Compatibility between Keynes’s and Sraffa’s Viewpoints on Output Levels

This chapter is a tribute to the memory of Athanasios (Tom) Asimakopulos. Together with a great heritage of humanity, he left us important contributions in different fields of economics. I will consider here his ideas on Keynes and Sraffa, drawing both on his writings, especially Asimakopulos (1985, 1988, 1991, 1992) and on his participation in the Trieste School from 1981 to 1989.

Barriers to full employment

Introduction - List of Participants - PART 1 THEORETICAL BARRIERS TO FULL EMPLOYMENT - Wage Costs and Employment: the Sraffian View A.Roncaglia, Comment J.Schneider - The Theory of Demand and Supply of Labour: The Post-Keynesian View J.A.Kregel, Comment R.A.Hart - New Information Theoretic Approaches to Labour Market Theory E.Streissler, Comment K.Rothschild - PART 2 FINANCIAL MARKETS AND FISCAL POLICY - Financial Markets, Investment and Employment P.Davidson, Comments S.Biasco & M.Sawyer - Fiscal and Monetary Policy in the Keynes-Kalecki Tradition A.Guger & E.Walterskirchen, Comments B.Holmlund & H-P.Spahn - PART 3 PUBLIC LABOUR MARKET POLICY - The Role of Manpower Policy in the Swedish Model R.Meidner, Comments W.R.Dymond & G.Schmid - PART 4 WELFARE STATE REGULATION, INDUSTRIAL RELATIONS, TECHNOLOGY AND THE ENVIRONMENT - The Welfare State and Jobs R.Delorme, Comments M.Miegel, C.Buchtemann & G.Voruba - Industrial Relations and Unemployment: The Case for Flexible Corporatism D.Soskice, Comment W.Streeck - New Technologies and Employment in the Eighties: From Science and Technology to Macroeconomic Modelling R.Boyer, Comment A.Sorge - Environmental Problems and Employment Opportunities B.Schefold, Comments P.Nijkamp & K.Zimmerman - PART 5 THE INTERPLAY OF ECONOMIC AND INSTITUTIONAL FACTORS - The Interplay between Institutional and Material Factors N.Georgescu-Roege, Comments F.W.Scharpf & M.Salvati - PART 6 A SUMMING UP AND CONCLUSIONS - New Lines of Research on the Question of Full Employment J.Steindl - Index

The Neo-Ricardian Approach and the Distribution of Income

This chapter is concerned with the impact of Piero Sraffa’s contributions to economic theory on the analysis of income distribution. We will proceed by first examining Sraffa’s critique of the traditional marginalist approach. We will then consider the classical approach based on the notion of the surplus that Sraffa wants to use to replace the marginalist one. Within this classical tradition, the problem of income distribution can be tackled by considering the real wage rate as determined by sociohistorical forces of custom and habit. Alternatively, there is the possibility of concentrating attention on the forces determining the rate of profits, while considering the real wage rate as a residual distributive variable. Along this line, we will examine, first, Pasinetti’s “technological-normative” conception of a “natural rate of profits”; then, the idea that the rate of profits is determined by the interest rate, which in turn is determined by monetary forces.

Why should economists study the history of economic thought

The thesis advanced in this paper is that economists, qua economists, need study and practise the history of economic thought. The ‘cumulative view’ of economics is criticized and opposed to the ‘competitive view’ stemming from Kuhn and Lakatos. Schumpeters distinction between two stages of economic theorizing–conceptualization and model-building–is recalled. The role of the history of economic thought as a way to investigate the conceptual foundations of different theories is thus pointed out. Some conclusions are then drawn concerning the kind of history of economic thought relevant for the formation of economic theorists.

Social Paradoxes of Growth and Civil Economy

‘The problem with reliance on the market as a moral code is that it fails to give moral credit to those whose sacrifices enable others to consider themselves freely choosing agents. By concentrating on the good news that we can improve our position, rather than the not-so-good, but socially necessary, news that we might consider the welfare of others as our direct concern, the market leaves us with no way to appreciate disinterest’.1 While in agreement with the descriptive content of this statement, I would not endorse its conclusion. Indeed, my argument is that a too narrow interpretation of the notion of market economy has brought us to believe that ‘the market leaves us with no way to appreciate disinterest’. I believe it is time to re-examine that very foundation of economic theory according to which rational economic man is conceived as a calculating self-interested maximizer. I argue for a more realistic and solid view that takes into account the possibility of visualizing a market society as composed of both a private economy and a civil economy.

The Classical Approach and Long-period Positions: a comment on Cesaratto

This paper criticizes a recent article by Cesaratto for referring to Sraffas analysis, and more generally to the classical approach, for implying the notions of long-period method, long-period positions, gravitation and persistency. A method of abstraction, based on the separation of different analytical issues, is instead proposed as an interpretation of the Sraffian-classical approach and as a means for dealing with technical change.

Wage Costs and Employment: the Sraffian View

Few would contest ‘the lack of scientific agreement on the causes of mass unemployment and on the effectiveness of conventional employment and labour market policy’. (IIM/LMP, 1984). The theoretical debate thus acquires immediate practical relevance, since ‘the contradictions between scientific analyses correspond to the controversy about which economic strategies would be suitable for eliminating high unemployment’.

Il pensiero economico di Paolo Sylos Labini

In questo testo si illustra la biografia intellettuale di Sylos Labini, concentrando l’attenzione in particolare sulla sua teoria dell’oligopolio, basata sulla nozione di barriere all’entrata in un settore economico: una nozione derivata dalla concezione classica (smithiana) della concorrenza come libero movimento dei capitali all’interno dell’economia.Vengono illustrate anche la sua analisi del progresso tecnico, del nesso salari-prezzi, e la sua concezione generale dell’economia, che attribuisce un ampio ruolo alle virtu civiche.