Harvey Gram

Openness versus Closedness in Classical and Neoclassical Economics

In contrast to Neoclassical general equilibrium theory, the Classical theory of value is open with respect to both the distribution of income and the composition of output. For this reason, a Sen-inspired theory of capabilities, insofar as it can be used to explain or determine income distribution and output composition, finds a natural home within the Classical theory of value.

International Debts and Deficits: A Kaldor-Pasinetti Model

Three solutions have been proposed to the problem of reconciling Harrod’s ‘warranted’ rate of growth with the ‘natural’ rate of growth of the effective labor force so as to maintain full employment in long period equilibrium.1

Joan Robinson: classical revivalist or neoclassical critic?

The capital controversy began with Joan Robinsons famous critique of the aggregate production function. She chose to include only the ‘negative’ part in the second volume of her Collected Economic Papers. The ‘constructive’ part, which had attracted so much attention in subsequent discussions of reswitching and reverse capital deepening, was peripheral to her concern with the role of realized expectations in neoclassical theory. The splitting of her famous paper into two parts raises a question. In the context of the capital controversy, should Joan Robinson be remembered as a classical economist in modern dress, or should she be remembered mainly as a critic of neoclassical theory?

Comment on 'Capacity Utilization, Foreign Portfolio Investment and International Debts and Deficits'

The linear structure of the model in Mertzanis (2000) points to errors in his Table 1. In a number of cases, inequality constraints on the models endogenous variables are violated. Satisfying all constraints imposes restrictions on the models parameters. The focus here is on wage shares which must be restricted to ensure a meaningful solution. Depending on savings propensities, full utilization of capital at a higher interest rate may require higher rather than lower wage shares in one or both countries.

Memories of Joan Robinson

The effects of the capital theory controversy were first felt in the teaching of economics when I was a graduate student in the late 1960s. At the University of Wisconsin there were both defenders and critics of neoclassical theory. The critics did not appear to me to have any political axe to grind. They simply had an argument to present. I suffered a certain loss of faith in the logical coherence of the neoclassical theory I had learned, but the excitement generated by the debate was a great compensation.

Ideology and Time: Criticisms of General Equilibrium

In her first published paper, Joan Robinson stated the following methodological position: ‘a serious subject, in the academic sense, is neither more nor less than its own technique … [gradually developed in] an austere and disinterested search, not ‘for the Truth’, but for a single self-consistent system of ideas’ (1932, pp. 3–4).1 She saw the intellectual activity of providing unreal answers to unreal questions as part and parcel of the laborious task of finding a set of assumptions at once tractable and realistic. This view of economic theory ‘as a sequence of conceptual models that seek to express in simplified form different aspects of an always more complicated reality’ is defended by Tjalling Koopmans, who remarks that ‘most economists when pressed will agree to one formulation or another of such a view of the logical structure of economic knowledge’ (Koopmans, 1957, pp. 142–43). In defense of general equilibrium theory, Frank Hahn takes a similar position, arguing that ‘the Arrow-Debreu machinery gives us the best base camp for sallies into new territory’ (Hahn, 1984, p. 10).2