Post(-)Keynesians and Neo-Ricardians

[Paul Davidson <PB108928%UTKVM1.BITNET@xxxxxxxxxxxxxxxxx>]

FROM:  Paul Davidson
"      Economics Department
"      523 Stokely Management Center     974-4221
Paul Christensen asks about the differences between the European Post Keynesian
s, i.e., Sraffians or neoRicardians, and the American Post Keynesians who
focus on money and uncertainty.
     First, there is no money in Sraffa's "Production of Commodities, etc"
so that the analytical system is a money neutral system. This is not
surprising, since Sraffa was criticisizing the classical system on their
own grounds -- not on the Keynesian ground of it either is a special case not
applicable to the facts of experience, nor on the grounds that it was a
general theory of employment. Sraffa understood this very well, many
neoSraffians did not. Second, the emphasis of Eatwell, Garagnani, and others on
economics as the study of "persistent" forces pulling the economy towards
some "centers of gravity" over time is logically inconsistent with
the existence of nonergodicity and uncertainty. In fact, Eatwell and
garagnani proclaim the superiority of their approach over the American
Post Keynesian approach because it does not get tied up in the
difficulties of analyzing the "ephemeral" problems of decision making
under uncertainty. In the long-run, in the modern neoSraffian - - neoRicardian
theory, the classical system is important. That is partly an explanation why
these Cambridge (UK) Post Keynesians ultimately shed the Post Keynesian
label and took on the neoRicardian cloth. (Some, such as Pasineeti and
Roncoglia recognize the difference and hope some day to modify their
Sraffian heritage by introducing money into the system.) In the last
few years of her life, Joan Robinson recognized the chasm and split
with, and engaged in debate with, Garagnani on the Keynesian aspects
of the analysis. (Marjorie Turner in her biography of Joan, quotes
some of her letters to me which is indicative of Joan's change in
view.
    Those well-versed in Sraffa's analysis should note that the essence
of Keynes's liquidity preference analysis (chapter 17 of the GT) is derived
from Sraffa's acute hatchet job on Hayek's classical analysis.  Accordingly
there is a way of joining Sraffa and Keynes, but not through the "production
of Commodities by Means of Commodities".The very title of that work should
indicate that Sraffa was analyzing an economy where money is irrelevant
in the production process.  It is Sraffa's spot-forward market analysis
in the EJ review of Hayek that is the tool that permitted Keynes to
break through the classical analysis. (Also Kaldon in his neglectednut importan
t article on Speculation and Economic Activity (1939) which is distilled
in the Galbraith Darity new book. Paul Davidson.

Have a good day!