Tuesday, March 25, 2014

Two Cents on Birner's 'The Cambridge Controversies in Capital Theory'

I just finished perusing Jack Birner's "The Cambridge Controversies in Capital Theory" (see here). My brief take is that although the author provides a thorough and lucid analysis & exposé of the debates, I certainly do not agree with his assumption that the issues involved primarily dealt with a fundamental difference over research programmatic technique & methodology, with ideology being merely secondary, if not superfluous. This is quite untrue; ideology was at the very core! For more on this, I recommend G.C. Harcourt's "Some Cambridge Controversies in The Theory of Capital" (see here) and Andrés Lazzarini's "Revisiting the Cambridge Capital Theory Controversies: A Historical and Analytical Study" (see here).

13 comments:

  1. In fact, the Cambridge controversies are another episode in a long story where ideology is certainly involved: Marx vs vulgar economy, Veblen vs JB Clark (with Clark saying each class receives according to marginal productivity and Veblen saying each class appropriates a part of the surplus), and finally the Cambridge controversies. As Avi Cohen and Geoffrey Harcourt write in their 2003 article on JEP, Joan Robinson was "citing Veblen and raising the spectre of Marx"

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    1. A paper on ideology in economics that I would consider a classic is "Rationality and Ideology in Economics" by Duncan Foley - http://articlescache.org/homepage.newschool.edu/ratid.pdf

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    2. Moreover, I agree wholeheartedly with your comment on the capital controversies and ideology. In fact, Dr. Matias Vernengo's History of Economic Thought course, which I took at Utah, was invaluable in this respect. The following, which he assigned, are what I consider few of the primary pieces concerning the relationship between epistemology, methodology, and analysis:

      Garegnani, P. (1984), “Value and Distribution in the Classical Economists and Marx,” Oxford Economic Papers, 36, pp. 291-325.

      DeVroey, M. (1975), “The Transition From Classical to Neo-Classical Economics: A Scientific Revolution,” Journal of Economic Issues, 9

      Lawson, T. (1989), “Abstraction, Tendencies and Stylized Facts,” Cambridge Journal of Economics, 13(1), pp. 59-78.

      Lunghini, G. (1998), “Political Economy and Economics,” in H. Kurz and N. Salvadori, eds., The Elgar Companion to Classical Economics, Cheltenham, Edward Elgar

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    3. That is a great reading list. And there are connections between these topics which must be explored. I think Lawson's conception (as developed in the article you mention) helps interpreting Garegnani's notion of normal position (as Garegnani preferred to call it later in life in order to avoid the confusions generated by the term "long period" which he uses in the article you mention), and makes Garegnani's conception consistent with Sraffa's references to "instantaneous photographs" in his manuscripts (even Garegnani was not sure it could be made consistent with it, I argued it can in a book that came out recently). Keep up the good work, this is an excellent blog, I must come here more often.

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  2. Thanks for this post Matias, and for referring to my work. Even if we do not take issue with this author in regards of ideology, there is a serious flaw in Birner's analysis of the historical aspect of the controversy (see Birner p. 77), when he actually downplays the implications of reswitching when he deals with Garegnani's participation in the oral debate with Samuelson in the early 60s, and later published in 1970. My point is not (or not only, if you want) to point out Birner's misreading (see Garegnani 1970 section II, where the reswitching case is developed) but to argue that it might have been hard to understand why the neoclassical school engaged in the debate in a particular moment (i.e., after 1960) if reswitching had "not played a major role" (Birner, p.77) in the critique of their theory. Note that Samuelson 1961 "surrogate Prod. function" article rules out reswitching and, as Joan Robinson pointed out later (1975), "everyone (except Piero Garegnani) was somewhat baffled by the surrogate production function".
    As to Martins' reference to old controversies, I tend to agree that the issues debated between Veblen and Clark involved a sharp departure from marginal analysis though the internal critique of that theory was still lacking. So perhaps we can see the Cambridge controversy as the one controversy that actually shook up the mainstream to the extent that this theory cannot rule out phenomena that can generally arise out of its own assumptions and data.
    Finally, there is a worth reading work which deals with issues related to the method of long period positions or normal positions and with issues related to slowly changes in the data as different from the idea of stationarity: Schlicht, E. (1985). Isolation and Aggregation in Economics. Springer-Verlag, Berlin.

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    1. I haven't actually read Bimer. This was posted by David, not me.

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  3. Sorry, just overlooked the author of the post. Nice post David.

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    1. Thanks! So, would you argue that even though the Cambridge controversy shook up the mainstream at the locus of its internal logic, the extent to which it has remained hegemonic in the social sciences is due to ideology?

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    2. That was the point of my graduate History of Thought course. Neoclassical economists changed their notion of equilibrium, and what we have now is the return of vulgar economics. For more this paper https://www.academia.edu/1645157/Because_I_said_so_the_persistence_of_mainstream_policy_advice

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    3. Absolutely, where do you think I got the inspiration? :)

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    4. I have had some pretty outstanding teachers.

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    5. Fantastic course: http://www.urpe.org/res/syl/sylMVernengo7600.html

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  4. After the controversy everyone adopted the new notion of equilibrium in pure theory but they do not know what is the theoretical status of those equilibria (are they theoretical variables? are they market equilibrium variables?) even they do not know, hence there are no analytical grounds to defend that theory hence it is pure ideology garbled in mathematical forms and axioms. Yet, any remote paralellism of any Arrow-Debreu proposition with real economies is founded in the long period tradition of marginalist thery - but this is completey flawed due to the controversies.

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