Enrico Barone's ‘Ministry of Production’: Content and Context

Abstract

Enrico Barone's famous article on economic planning, ‘Il Ministro della Produzione nello Stato Collettivista’ (‘The Ministry of Production in the Collectivist State’), which showed the theoretical possibility of an economically efficient collectivist planned economy, was published in Giornale degli Economisti in 1908. Barone's article has been widely cited, particularly in the comparative economic systems literature, but it has not been very widely read or analysed in recent years, and there is not much literature that places Barone's ‘Ministry’ model in the context of his other works or in its historical, social, or ideological context. The aims of this article are: (a) to analyse and clarify Barone's model in depth; (b) to place it in the context of Barone's other writings and the literature on the subject; and (c) to examine the apparent contradiction between Barone's hostility to socialism and his attempt to formulate the pure theory of the collectivist economy.     

NOTES FOR CONTRIBUTORS

Abstract

This paper reconstructs the academic figure of Sraffa at the University of Cambridge as it emerges from his papers, his correspondence with the economists with whom he had special relations, and the official documents of the University, in particular in connection with his role in the Faculty of Economics and Politics, to which he belonged from 1927 to 1965. It presents a detailed examination of the various posts held by Sraffa at the University as Lecturer, Assistant Director of Research, Member of the Degree Committee, Examiner, Member of the Faculty Board, as co-founder of The Department of Applied Economics, Elector to the Chairs of Political Economy, Industrial Relations and Economics, Member of King's College and finally as Fellow of Trinity College. Moreover, the relationship with his fellow economists in Cambridge, in particular Keynes, Kahn, Kaldor and Joan Robinson is also examined and assessed.

The broad conclusion of the paper is that Sraffa's relationship with Cambridge University was complex, contradictory and intense, and should be seen within the broader context of the ambiguous relations Sraffa had with academia in general.     

In defence of Adam Smith's theory of value

Abstract

This paper defends Adam Smith against his critics on his ‘additive’ theory of value as well as his theory of ‘falling rate of profits’. It argues that Adam Smith did not forget the raw materials, and so forth, in his resolution of the price into wages, profits, and rent, and that the constraint binding on the total income was also taken into account by treating rent as the residual. It further argues that there is no fallacy of composition in Smith's explanation for the ‘falling rate of profits’. It was explained on the basis of rising real wages and the farmers’ inability to shift the burden of the rise in wages from profit to rent in the context of a growing economy.     

Schumpeter on money,banking and finance: an institutionalist perspective

Abstract

The main purpose of this paper is to clarify on the evidence of primary material how Keynes transformed his theory from the Tract to the Treatise. Keynes went on working along the lines of the Tract theory until around April 1926, subsequently adopting the Transaction Approach up until September 1927. The paper stresses the importance of the three TOC between September 1927 and September 1928 as pointing the way towards the Treatise's fundamental equations – the breakthrough opening the way to the Treatise. The second fundamental equation, the TM supply function and the natural rate of interest had made their appearance by April 1930.     

Pluralism or isolation of Civilisations? Russia's foreign policy discourse and the reception of Huntington's paradigm of the post‐cold war world

This paper studies the effects of Samuel Huntington's ‘Clash of Civilisations’ thesis on Russian foreign policy discourse. In response to Huntington's thesis, two major currents of Russia's foreign policy thinking ‐ Liberals and Nationalists ‐ are identified, both of which are critical of the thesis. The two groups offer diametrically opposed alternatives to Huntington's paradigm of the post‐Cold War world. The Liberal‐Nationalist controversy reflects Russia's debates about its own political identity and provides us with a rich and informative understanding of the process of identity formation. By identifying Russia's various reactions to the ‘Clash of Civilisations’ thesis, the paper identifies potential influences of various currents in Russian foreign policy thinking on the country's future foreign policy. It also suggests some implications for further studies of cultures/civilisations in international politics.     

Artificial intelligence: neither Utopian nor apocalyptic impacts soon

ABSTRACT

After a number of AI-winters, AI is back with a boom. There are concerns that it will disrupt society. The immediate concern is whether labor can win a ‘race against the robots’ and the longer-term concern is whether an artificial general intelligence (super-intelligence) can be controlled. This paper describes the nature and context of these concerns, reviews the current state of the empirical and theoretical literature in economics on the impact of AI on jobs and inequality, and discusses the challenge of AI arms races. It is concluded that despite the media hype neither massive jobs losses nor a ‘Singularity’ is imminent. In part, this is because current AI, based on deep learning, is expensive and difficult for most businesses to adopt, not only displaces but in fact also create jobs, and may not be the route to a super-intelligence. Thus AI is unlikely to have either Utopian or apocalyptic impacts soon. Considering Amara's Law, one should however be wary not to underestimate the long-run impacts of AI.     

Jacob Viner on Adam Smith: Development and reception of a theological reading

Abstract

Jacob Viner was one of the most important interpreters of Adam Smith's work, particularly for his emphasis in a classic 1927 article on Smith's theological framework, his discussion of the relationship between the Theory of Moral Sentiments and the Wealth of Nations and dismantling of a popular view of Smith as a doctrinaire advocate of laissez-faire. What is less well known is that Viner's theological reading of Smith developed over the next 40 years through intense study of eighteenth century natural theology, and some of his views changed. This article traces the development of Viner's interpretation of Smith. It assesses the suggestion of D.D. Raphael that Smith moved away from a theological framework over time and that Viner repudiated his theological reading of Smith. I argue instead that Viner's mature work broadened and strengthened the theological reading. Much of the literature on Smith and Viner wrongly assumes that naturalistic explanation and theological frameworks are mutually exclusive. This may be the dominant twentieth century view, but it was not so in the eighteenth century, as Viner well understood.     

The interdependence between economic analysis and methodology in the work of Joseph A. Schumpeter ∗

Abstract

This paper offers an overview of Schumpeter's entire economic work from a methodological perspective. Only from this ‘birds-eye’ view do all the well-known parts of his work become part of a mosaic which – from a distance – forms a picture of logical succession: It tells the story of an intensive search for an appropriate analytical understanding of the phenomenon of economic change. As a result, this paper argues that, from a methodological perspective, Schumpeter's work appears to be anything but a monolithic unit.     

The New Economics of Labor Migration: Beware of Neoclassicals Bearing Gifts

Abstract

Until the emergence of the New Economics of Labor Migration (NELM) in the 1980s, migration scholars were largely divided into two main theoretical camps, viz. the neoclassical and historical-structural approaches to migration. Against this background, the NELM presented itself as a theoretical ‘third way’ between the two latter approaches, and purported to reconcile agency and structure in a way previously unachieved by either of them. While those pretensions gained a fair amount of acceptance and popularity, this paper argues that they are fundamentally misleading, and that the NELM is little more than a slightly more sophisticated avatar of the neoclassical approach to migration, whose fundamental weaknesses it has not, and cannot, shed. This paper further argues that, in so doing, the NELM effectively constitutes migration theory's own instance of economics imperialism, i.e. the attempt to advance the fundamental tenets of neoclassical economics (methodological individualism and the assumption of optimizing rationality) within the context of the study and interpretation of various social phenomena. In order to put forth these arguments, this paper provides a summary presentation of the standard neoclassical theory of migration, the historical-structural heterodoxy and the NELM; highlights why it is that the NELM should be regarded as a ‘reworked’ version of the neoclassical theoretical framework and discusses its inception in the context of the ‘information-theoretic revolution’ in economics; and argues for a new and improved ‘historical-structural synthesis’ as a more satisfactory alternative to both the NELM and the standard neoclassical theory.     

Lombard Enlightenment and Classical Political Economy

Abstract

This paper discusses the formative steps of ‘Classical’ Political Economy under the joint influence of the Italian and Scottish Enlightenment. Pietro Verri is a leading figure of the Italian Enlightenment and he belongs to the Lombard branch of the Italian School of Political Economy (sometimes named ‘School of Milan’) during the latter half of the eighteenth century. Schumpeter's treatment of the ‘School of Milan’ describes Pietro Verri as ‘the most important pre-Smithian authority on Cheapness-and-Plenty’. A careful canvass of the texts substantiates Schumpeter's suggestion. Verri stands out as a key figure in the transition from Physiocracy to the Smithian system.     

John Atkinson Hobson and the roots of John Dewey's economic thought

Abstract

American pragmatist John Dewey's economic thought has remained relatively unknown by both philosophers and economists. This article addresses this lack of interest and replies to criticism of pragmatism as the philosophy of ‘corporate liberalism’ by tracing one source of Dewey's economic thought to British New Liberal John Atkinson Hobson. General similarities are discussed first, followed by a presentation of Dewey's use of Hobson's theory of underconsumption during the Great Depression. It concludes by presenting Dewey's understanding of a liberalism that had truly become corporate.     

Sectoral Changes in Employment: An eclectic perspective on ‘good’ jobs and ‘poor’ jobs

The linkage Keynes established between the volume of employment that business firms require to make a particular number of jobs available provides an operational perspective about the way in which labor markets work. The aggregate supply or Z function is, in fact, a job offer curve. The most significant insight to derive from this curve is that job offers are inseparable from the economy's aggregate expenditure (or demand) level. This interdependency of aggregate supply and aggregate demand is necessary to understand the functioning of labor markets in the real world. This paper argues that a disaggregated model which encapsulates the economy's price-taking and price-making sectors offers a promising analytical tool to gain perspective about ‘good jobs’ and ‘poor jobs’ in post-Fordist economies. It is maintained that the sectoral deployment of workers reflects whether employing firms, as price-makers, can capture the increasing returns inherent in modern technology.     

‘A judicious and industrious compiler’: Mapping Postlethwayt's Dictionary of Commerce

ABSTRACT

This paper takes as its guide the largest compilation of commercial knowledge of the mid-eighteenth century in the English language, Malachy Postlethwayt's Universal Dictionary of Trade and Commerce (1751–1755). Using network analysis, the many cross-references between entries in this work allow one to identify clusters of themes and literatures within the mass of materials. Pictures are presented that can be interpreted as ‘mind maps’ grouping the commercial literature by various topics and themes. The paper then focuses on one novel aspect of Postlethwayt's work, i.e., his inclusion besides entries on ‘practical’ topics of ‘political’ discussions, and identifies his sources.     

The French Revolution and the Creation of Benthamism

Abstract

The article investigates Knut Wicksell's interpretation of aggregate economic fluctuations. It is shown that Wicksell described the business cycle as oscillations of an economy with increasing population and scarce natural resources around its steady growth path ('dynamic equilibrium'), provoked by sporadic technological progress. The ‘shocks’ bring about a wave‐like motion because of psychological and technical lags in the economic structure. Wicksell's suggestion that excess net savings in the depression take the form of stocks of commodities is compared to his contemporaries’ answers to the question ‘What happens to savings during the depression?’ The article also puts forward a relatively neglected connection between Malthus’ and Wicksell's notions of over‐production. Divergences between the natural and market rates of interest — essential to his better‐known ‘cumulative process’ ‐ are not a necessary part of Wicksell's business cycle, but they are important to explain why the upper turning‐point can have the nature of a crisis, which results from wrong expectations induced by cumulative price movements.     

Foucault,Weber and the history of the economic subject

Abstract

The present paper begins with a presentation of Foucault's lectures on economic issues. Departing from his previous views on government, Foucault offered a new approach to eighteenth-century liberalism and neo-liberalism, interpreting these political theories in terms of what he called biopolitics. Then the paper endeavours to demonstrate that the line of reasoning pursued by Foucault coincides with that found in Weber's sociology of religion. In as much as Weber studies the relation between the religious and the economic, the paper draws a parallel between the Weberian concept of ‘life conduct’ and the concept of ‘technique of the self’ advanced by Foucault in order to study the moral foundation of the economic agent.     

‘Anecdotal myths’: Tinbergen's influence on Harrod's growth theory

Abstract

In the history of economic theory, Harrod's transition from the explanation of business cycles in An Essay on the Trade Cycle (1936) to his well‐known growth theory in ‘An essay in dynamic theory’ (1939) has always been surrounded by some degree of speculation. One of the topics in that area of speculation concerns the (degree of) influence exerted by Tinbergen on the development of Harrod's growth theory during the 1936–9 period.

This paper argues that Tinbergen's influence on Harrod's work mainly took place on formal, mathematical, grounds, leaving methodological matters untouched. This matter is of some importance in understanding the success of what was initially considered by others as a ‘dynamic’ extension of the Keynesian research programme and later evolved, through the work of Tinbergen and Solow, into a neoclassical growth theory.     

Sraffa and the Marshallian tradition*

Abstract

The paper retraces some of the stages in Sraffa's thinking about the work of Marshall, by drawing on unpublished material in the Sraffa archive from 1923 to 1930. It argues that Sraffa transformed his dissent – which was based on ideological grounds – into a ‘quest for the fatal error’ to demolish the logical construction of Marshallian theory. Some of his attacks were successful (for example, the critique of the relation between costs and output); other attempts failed (the critique of the ‘normal rate of profit’ and the critique of the concept of marginal productivity) since Sraffa could not find enough textual evidence to support his position.     

A historiographical exhumation of J.A. Hobson's Over-Saving Thesis: General theory versus historiography

Abstract

The discussion of J.A. Hobson's understanding of over-saving has been largely confined within John Maynard Keynes' famous critique in the General Theory. I argue that gauging Hobson's contribution by ‘general theory’, that is, by an ahistorical, non-evolutionary yardstick, is to miss the larger part of Hobson's achievement. Hobson's conception of over-saving was contained within an evolving historiography of capital accumulation and took on various meanings depending on whether Hobson was discussing a competitive or monopolistic environment. I show that Keynes' ‘corrected’ version of over-saving was implicitly contained within Hobson's analysis of an evolving monopolistic industrial structure.     

Joan Robinson and the three cambridge revolutions

Joan Robinson's association with three Cambridge ‘revolutions’—imperfect competition, effective demand and capital theory—is examined in the context of her personal and intellectual partnership with Richard Kahn, John Maynard Keynes and Piero Sraffa. Initially, imperfect competition appeared to have successfully extended marginal analysis to all market forms. It also allowed Richard Kahn and Joan Robinson to persuade Keynes to present the main argument of The General Theory in terms of aggregate demand and aggregate supply. By the early 1950s, however, Joan Robinson had rejected the Marshallian methodology and had become a strenuous censor of neoclassical theory. In this paper the origin of her critique is traced to her reading of Sraffa's Introduction to Ricardo's Principles.     

Bentham and Owen on entrepreneurship and social reform

Abstract

Jeremy Bentham invested an important amount of money in New Lanark's cotton mills, which at that time were run by Robert Owen. However, apparently Bentham never took a serious interest in the organisation of such a successful entrepreneurship and new model society, although it seemed to fit in with Bentham's ideas of the entrepreneur (‘projector’) and also with Bentham's ideas on social reform, seeking the greatest happiness of the greatest number. This article explains how Bentham's share in New Lanark came about. It tries to ascertain whether the New Lanark experiment and Owen's ideas fit Bentham's managerial theory and ideas on social reform so as to understand why Bentham did not pay more attention to Robert Owen's practice.