Sen, Sraffa and the revival of classical political economy

Copyright © 2012 Taylor & Francis.In his new book The Idea of Justice, Amartya Sen argues that political theory should not consist only in the characterisation of ideal situations of perfect justice. In so doing, Sen is making, within the context of political theory, a similar argument to another he also made in economic theory, when crtiticising what he called the ‘rational fool’ of mainstream economics. Sen criticised the ideal and fictitious agent of mainstream economics, while advocating for a return to an integrated view of ethics and economics, which characterised many classical political economists who inspired Sen's theory of justice, from Adam Smith to Karl Marx. I will examine Sen's revival of classical political economy, and argue that a revival of classical political economy, which was undertaken earlier by Piero Sraffa, has much potential for bringing a more plural and realist perspective to economics

“In Time of Stress, a Civilization Pauses to Take Stock of Itself”: Adolf A. Berle and the Modern Corporation from the New Era to 1933

This Article demonstrates three things. First, an examination of Berle’s work and thinking in this critical period reveals the ways in which public problems and the need to “know capitalism,” to borrow a phrase from Mary Furner, converged in the post-WWI era in remarkable and unprecedented ways that would shape New Deal and post-New Deal politics and policy. Berle’s gift for synthesizing evidence and constructing narratives that explained complex events were particularly well suited to this era that prized the expert. Second, identifying a problem and developing a persuasive narrative is one thing, but finding solutions is another. Berle joined in a collective effort to “grope”—to use a term he employed often—for new ways of ordering the relationship between the state, shareholders, managers, workers, and the corporation. In a related and third point, a close examination of this critical period in Berle’s intellectual development helps us to better understand Berle’s embrace of the corporation as a progressive and stabilizing force in the post-WWII era. The Berle of the pre-New Deal period was ideologically predisposed to more associational—rather than statist—solutions to public problems. As the Great Depression took hold, Berle recognized the necessity of government taking on new powers, but his correspondence and writings prior to the Roosevelt administration reveal someone never at ease with precisely how the state should regulate the corporation. When post-WWII concerns about the inevitable return to the Great Depression failed to materialize, Berle returned to this more associational approach and celebrated the ensuing prosperity as a victory for now socially responsible corporate managers who had taken the lessons of the Great Depression to heart

The Gospel of Co-operative Capitalism: Acolytes and Apostates

The present paper seeks to locate the Bhaduri-Marglin (B-M) model as an historical outcome of the Left\u27s internal disputes over the prospects for social democracy. In better contextualizing the B-M model as a historical response to the perceived political economic failings of the social compromises upon which the growth of post-War advanced capitalist economies had rested, both the model’s popularity and its potential limitations can more easily be understood. Though the B-M framework has frequently come to be referred to as the neo- or post-Kaleckian growth model, such labels perhaps obscure the model\u27s diverse ancestry. The model constituted an attempt to reconcile seemingly incompatible theoretical perspectives, and to highlight those special conditions that made possible a ‘Golden Age’ of social democracy. Moreover, they sought to show that the conclusions of Keynesian social democrats and of radical Marxists could be viewed as two possible outcomes of the same broadly Keynesian theoretical framework in which investment played a leading role. While this synthesis has fostered a vast literature and useful dialogue, it is argued that it should, nevertheless, be seen as the outcome of a generation Left social scientists that had become deeply skeptical of the possibility of egalitarian redistribution under capitalism, and of the political ambitions of Keynesian and social democratic parties

Steindlian models of growth and stagnation

Following an analysis of the relation between a standard Steindlian model of stagnation and Steindl’s own analysis, we modify the standard model by introducing endogenous changes in the markup and a reformulation of the investment function. These extensions, which address significant weaknesses of the standard model, find support in Steindl’s writing and leave intact some of Steindl’s key results. In a further extension, we add a labour market and analyse the stabilizing influence of a Marxian reserve-army mechanism. The implications of the extended model for the effects of increased oligopolization are largely in line with Steindl’s predictions

Capitalism and Risk: Concepts, Consequences, and Ideologies

Politically charged claims about both capitalism and risk became increasingly insistent in the late twentieth century. The end of the post-World War II boom in the 1970s and the subsequent breakup of the Soviet Union inspired fervent new commitments to capitalist ideas and institutions. At the same time structural changes in the American economy and expanded industrial development across the globe generated sharpening anxieties about the risks that those changes entailed. One result was an outpouring of roseate claims about capitalism and its ability to control those risks, including the use of new techniques of risk management to tame financial uncertainties and guarantee stability and prosperity. Despite assurances, however, recent decades have shown many of those claims to be overblown, if not misleading or entirely ill-founded. Thus, the time seems ripe to review some of our most basic economic ideas and, in doing so, reflect on what we might learn from past centuries about the nature of both capitalism and risk, the relationship between the two, and their interactions and consequences in contemporary America