Gary Mongiovi

Vulgar economy in Marxian garb: a critique of Temporal Single System Marxism

This paper presents a critique of recent efforts, under the rubric of Temporal Single System Marxism, to defend Marxs value theory against the claim that his transformation algorithm is flawed. Although Marx did make a number of errors in elaborating his theory of value and the profit rate, these missteps do not undermine his larger scientific project. Far greater damage has been inflicted by his would-be Temporal Single System defenders, who camouflage Marxs errors by detaching him from his Ricardian roots; in the process they redefine value in a way that trivializes its function in Marxs system. (2002 URPE. All rights reserved.

Classics and Moderns: Sraffa's Legacy in Economics

The year 1998 marked the centenary of Piero Sraffas birth. This paper reflects upon a recently published collection of essays on Piero Sraffas scientific legacy. The paper focuses on the constructive dimensions of Sraffas work.

Piketty on Capitalism and Inequality

Thomas Piketty’s Capital in the Twenty-first Century has focused attention on the dramatic rise in economic inequality that has occurred in the United States and Europe over the past four decades. This paper argues that his account of the mechanisms that determine the distribution of income and wealth in a capitalist economy is unconvincing, for it rests on a tautology and on a spurious hypothesis about how the savings rate, the growth rate, and the capital/income ratio are connected.

The Ricardo Debates: A Comment

In a recent contribution to this journal, Evelyn Forget (1990) perpetuates the misunderstandings that have surrounded Sraffas reconstruction of classical economics. Forget contends that the interpretation of Ricardo endorsed by Sraffa (1951, 1960) and Garegnani (1984) fails to appreciate a crucial logical point concerning the relationship between outputs and long-period prices of production. From this premise she draws two conclusions: (1) that the prices established by the equations contained in Sraffas Production of Commodities by Means of Commodities cannot coincide with Ricardos natural prices; and (2) that the interpretation associated with Sraffa and Garegnani must therefore be wrong. But Dr Forgets premise is unfounded, and the reasoning by which she derives her conclusions is flawed. The analytical core of the classical surplus approach, as outlined by Garegnani (1984), is comprised of a set of logically necessary and mathematically exact relationships that link relative prices, the real wage and the profit rate when the technical conditions of production, the wage (or profit) rate, and outputs are specified; these relationships are summarized in the equations found in parts I and ii of Production of Commodities. By contrast, the forces that determine the real wage, the technique of production, and the social product cannot be described with the same degree of formal precision, since the magnitudes taken by the wage, the input coefficients, and the outputs do not have the status of logically necessary inferences; hence the analysis of these forces belongs more properly to a secondary stage of investigation outside the core.1

Pierangelo Garegnani, the Classical Surplus Approach and Demand-led Growth: Introduction to the Symposium

Sraffian economics has recovered the surplus approach to the theory of value and distribution that was developed by the classical economists and Marx and then obscured by the emergence of marginalist economics in the second half of the 19th century (Garegnani 1984). It has also laid the foundations for a robust capital-theoretic critique of the marginalist theory of distribution. By virtue of this twofold contribution, Sraffian economics is well-suited to absorb and reinforce the more revolutionary insights of Keynes’s legacy. A research programme in this direction was launched in the early 1960s by Pierangelo Garegnani (1962) in a report he wrote for the private research institute SVIMEZ. The SVIMEZ report is divided into three parts. The first and second parts are concerned with theoretical matters; the third part is an empirical study, grounded in the theoretical results, of investment and capacity utilisation in the Italian economy for the period 1950 to 1960. The first part of the report (Chapters I and II) has a critical focus; it undermines the residual marginalist elements of Keynes’s General Theory (1936). These orthodox elements—the idea that in equilibrium the real wage must be equal to the marginal revenue product of labour; and the treatment of investment spending as a decreasing function of the interest rate—enabled mainstream economics to absorb Keynes’s theory of effective demand in weakened form via the neoclassical synthesis. Garegnani’s 1958 University of Cambridge doctoral thesis (published in Italian as Garegnani 1960) and Sraffa’s Production of Commodities by Means of Commodities (1960) had already exposed serious weaknesses in the orthodox treatment of capital. Their work had shown that the interdependence of distribution and relative Review of Political Economy, 2015 Vol. 27, No. 2, 103–110, http://dx.doi.org/10.1080/09538259.2015.1026092

Misinterpreting Ricardo: A Review Essay

Debate over the interpretation of David Ricardos economics has assumed special relevance since the publication of Piero Sraffas Production of Commodities by Means of Commodities (1960). Sraffa sought to revive and reconstruct a nearly lost classical tradition whose main elements, he believed, had been given their first coherent expression by Ricardo (Sraffa 1951, Garegnani 1984). On this interpretation, Ricardos analysis, far from being a fumbling step toward the modern theory of supply and demand, as Marshall (1920) would have it, or a misguided detour as Jevons believed (1879), instead constitutes a logically consistent alternative to the marginalist theory that emerged after 1870.

The American Methodenstreit

So true is it that, in science as elsewhere, we fight for and against not men and things as they are, but for and against the caricatures we make of them.

Subjectivism and Economic Analysis

Subjectivism plays a fundamental role in many of the leading alternative schools in economics. This work explores major methodological issues in the area of radical subjectivism and includes contributions from Jorg Bibow, Peter Boettke, Maurizio Caserta, Steven Horwitz, Brian J. Loasby, Steven Parsons, Steve Sullivan and Carlo Zappia.

Subjectivism and economic analysis: Essays in memory of Ludwig M. Lachmann

Subjectivism plays a fundamental role in many of the leading alternative schools in economics. This work explores major methodological issues in the area of radical subjectivism and includes contributions from Jorg Bibow, Peter Boettke, Maurizio Caserta, Steven Horwitz, Brian J. Loasby, Steven Parsons, Steve Sullivan and Carlo Zappia.

Shackle on Equilibrium: A Critique

This paper presents a critical evaluation of Shackles views on economic method. Shackles arguments against equilibrium analysis are shown to apply to orthodox theory, which has subjectivist foundations, but not to the objectivist classical approach associated with Sraffa. The long-period equilibrium method is indispensable to the analysis of how market societies function. Moreover, since the classical theory contains no trace of the factor substitution mechanisms that underpin neoclassical orthodoxy, its explanations of distribution, employment and outputs must take explicit account of institutions, power and ethical norms. Thus there is no conflict between social economics and the method of the classical economists and Sraffa. On the contrary, the classical approach provides a rigorous framework for the investigation of the very issues that are at the center of institutional and social economics.