Friday, April 19, 2013

Eatwell on Garegnani again

I linked to Eatwell's lecture in honor to Garegnani at the University of Rome. The text has been published in Contributions to Political Economy (full text here, subscription required). It is important to note how central Garegnani's PhD dissertation was for his following work.

As Eatwell notes:
"Key elements in the life's work of Pierangelo Garegnani (9th August 1930–14th October 2011) derive from the analytical results first developed in his 1958 PhD dissertation at Cambridge University. The critique of Walras's theory of capital articulated in the dissertation was extended in later years to the identification of the implications of the change in the concept of equilibrium in the works of Hicks and Debreu."
Further, the essential element in the dissertation was the clear anlytical stance, which, in Eatwell's words, shows how economics should be done. Again in his words:
"First, he specified the problem clearly: the determination of natural/normal prices, i.e. the solution to the problem of value and distribution.

Secondly, he clarified the structure of the competing theories, classical and neoclassical, by defining the data of the theory, i.e. the propositions taken as given. In the case of classical theory these were the social product (its size and composition) the technique or techniques of reproduction and (sometimes) the real wage. In the case of neoclassical theory the data were preferences, endowments, and the technology (constrained to constant returns to scale by the requirements of perfect competition).

Thirdly, he defined the analytical problems faced within each theoretical construct in terms of measurement: in classical theory measurement of the social product independently of its distribution; in neoclassical theory the measurement of the endowment of reproducible means of production in a manner compatible with the determination of normal prices, i.e. with a uniform rate of profit on all capital goods."
The limits of the mainstream approach, and the open possibilities of the alternative classical-Keynesian approach can still be derived from his seminal work.

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