Giorgio Lunghini

Politiche eretiche per l'occupazione

In recent years the stable and biunivocal coupling of the production of commodities and the employment of living human labour has changed. It is still true that if production declines, employment falls, but the opposite, if production recovers then employment also recovers, is no longer true. This stylised fact demands an answer to three questions: What are its causes? How can the existing employment be maintained? and What should be done with the unemployed? This paper presents some heretical proposals which have been recently put forward as partial remedies for unemployment: the basic income, the reorganisation of working time and the socially useful jobs. All three may be combined in a global project whose basic fourth element is a real industrial policy. The heresy lies in the well founded principle that the causes of unemployment, and then its remedies, must be sought not only in the labour market but in the economic and social system on the whole.

Einaudi e Keynes

Luigi Einaudi writes on and against J.M. Keynes in some twenty articles, from 1917 to 1950. He is always laudatory with Keynes as a litterateur, and he is always acrimonious about Keyness political economy. Did he really understand Keyness theory?

Sraffa e il contesto

Piero Sraffas Production of Commodities by Means of Commodities (1960) is a critique of the modern theory of value and distribution; on the other hand it aims to a re-construction of the classical theory. Both classical theory and modern theory are defective. The defects of classical theory, however, can be cured, whereas the defects of modern theory cannot. This is a curious case in the history of science.

The General Theory and the Keynesians: An Estate in Abeyance

Keyness General Theory is a classic, and classics should be read or re-read directly, without any scholarly mediation. Some methodological and substantive elements of the General Theory are constitutive of the GT itself. These elements give the most fruitful hints, if you want to grasp the important points of the current economic crisis. Unfortunately they are removed by mainstream economics. The first element is Keyness use of some so-called psychological categories (the convention, etc.); the second is the relationship, in Keyness view, between economic theory and economic policy; and the third is the social philosophy towards which the General Theory might lead.

Bruno de Finetti and Economic Theory

Bruno de Finetti gave many important contributions to economic theory and on economic theory. De Finettis main contribution is his own concept of probability, which is both an answer and a critique to the question put by J.M. Keynes: [Under uncertainty] there is no scientific basis on which to form any calculable probability whatever. We simply do not know. Nevertheless, the necessity for action and for decision compels us as practical men to do our best to overlook this awkward fact and to behave exactly as we should if we had behind us a good Benthamite calculation of a series of prospective advantages and disadvantages, each multiplied by its appropriate probability waiting to be summed. Unfortunately, a policy - oriented economic theory seems to be incapable of adopting a Ramsey - de Finetti concept of probability. This is the first topic briefly discussed in this paper, the others being de Finettis (and Ettore Majoranas) refusal of determinism after the developments of physics in the 20s; de Finettis critique of the (mis)use of mathematics in economic analysis; of the asserted neutrality of economic theory; and of econometrics as play-o-metrics. On this issue, de Finettis point seems to be the same of Keyness point, when Keynes argues (against Tinbergen) that One has to be constantly on guard against treating the material as constant and homogeneous in the same way that the material of the other sciences, in spite of its complexity, is constant and homogeneous. It is as though the fall of the apple to the ground depended on the apples motives, on whether it is worth while falling to the ground, and whether the ground wanted the apple to fall, and on mistaken calculations on the part of the apple as to how far it was from the centre of the earth.

Benedetto Croce e l'economia politica

Three major issues of Benedetto Croces view of political economy are discussed. 1) The role of history vs. natural order (or equilibrium) in the economic discourse: the belief in a natural order, ensured by the markets capacity for self-regulation, introduces a determinist element into the analysis and suggests that the normal state of the economic system is equilibrium. 2) The reduction of political economy to economics: i.e. the shift from a science conceived and discussed using ordinary language to a tecnique conceived and expressed in mathematical form. 3) The so-called marxian law of a falling rate of profit, which is not - as Croce maintains - a determinist law.

Unemployment and Social Needs

At the Madrid conference of 1930 (Keynes, 1930), J.M. Keynes maintained that both of the two opposed errors of pessimism would be proved wrong in our own time: the pessimism of the revolutionaries who think that things are so bad that nothing can save us but violent change, and the pessimism of the reactionaires who consider the balance of our economic and social life so precarious that we must risk no experiments. Keynes maintained that the disease of technological unemployment (unemployment due to the discovery of means of economizing on the use of labour outrunning the pace at which we can find new uses for labour) would be only a temporary phase of maladjustment, and that mankind would have solved its economic problem in a hundred years’ time. In the light of that prediction, man ought to find himself faced with his real, his permanent problem, in just over thirty years from now: how to use his freedom from pressing economic cares, how to occupy his leisure time, which science and compound interest will have won for him, to live wisely and agreeably and well.

Un problema serio

In this note we put forward briefly some arguments which convince us that the microfoundation problem is ill-posed (at least, as it has been studied traditionally). First of all, that the only valid microfoundation is the walrasian one is no longer a tenable position. Secondly, even in this respect, the most usual hypothesesis accepted by the proponents of a rigorous microfoundation procedure is the representative agent, which is in contrast with their very viewpoint. Thirdly, we know of no analysis in which all macroeconomic propositions are deduced from microeconomic theorems (if this were possible, one cannot see how the distinction would be meaningful). Finally, we accept and motivate the idea that macroeconomics treats economic properties which are emergent with respect to the analysis of individual behaviour: but this is a completely different story from the one told in the usual micro-macro debate.