Post Keynesian Study Group Newsletter (UK)

[glanger@xxxxxxxxxxxxxxx (Gary F. Langer)]

Subject: Post Keynesian Economics Study Group Summer Term
Meetings/Newsletter 2

Post Keynesian Economics Study Group
Secretary: Adrian Winnett

School of Social Sciences           e-mail A.B.Winnett@xxxxxxxxxx
University of  Bath                    tel (01225) 826826x5745
Bath BA2 7AY                           fax (01225) 826381

Summer Term Meetings 1995

Friday 5 May 2.00-7.30 "Criticising Post Keynesian Economics"

 Venue:
University College London, Department of Economics, Ricardo
Theatre (31-32 Alfred Place - next street East of Tottenham Court
Road, 5-10 minutes walk South-East of Goodge Street Northern Line
underground station)

2.00-3.45  Stephen Parsons (de Montfort) "Rescuing Keynes from the
           Post Keynesians"

           Bernard Walters/David Young (Manchester)"A
           methodological criticism of Post Keynesian economics"

3.45-4.15  Tea/Coffee

4.15-6.15  Ian Steedman (Manchester)  "Some questions for Post
           Keynesians"

           Round table discussion with comments from Sheila Dow
           (Stirling), Bill Gerrard (York) et al, followed by open
           discussion.

6.30-7-30   Party hosted by Edward Elgar to mark publication of
            "Keynes, Knowledge and Uncertainty"
            edited by  John Hillard and Sheila Dow (the papers
            from our 1993 Leeds Conference)


Friday 19 May An all day conference on "The Relevance of Keynesian
Economic Policies Today"

 Organised by Philip Arestis (East London) and Malcolm Sawyer
(Leeds); the papers will be published as special issue of "The
International
Review of Applied Economics". The emphasis of the conference will
be on the extent to which the integration of national economies
and therefore the globalisation of the world economy affects the
implementation and efficacy of
Keynesian economic policies.
 Venue: Duncan House (UEL Business School), High Street ,
Stratford, London E15
 Travel: Underground Central Line or Network South East to
Stratford station. (Turn right outside the station, passing in
front of or behind the new bus station; walk along the main road
pavement towards the traffic lights, following the curved
glass-cover ed buildings, bearing right over the railway bridge,
and past the Builders' Arms pub. Cross
Lett Road. Duncan House is immediately ahead, to the right facing
the main road, High Street. The entrance is in the centre of the
High Street face of the building .)

 Programme:
 9.30-10.00  Arrival and Coffee
 10.00-11.30 Papers by Pascal Petit and Douglas Mair;
             discussant Johan Deprez
            "A European Perspective"
 11.30-12.00 Coffee
 12.00-1.30  Papers by Gary Dymski and Bob Pollin; discussant
Harald
             Hagemann
            "An American Perspective"
 1.30-2.30    Lunch
 2.30-4.00   Papers by Paul Davidson and James Galbraith;
discussant
             Jonathan Michie
             "A Global Perspective"
 4.00-4.30   Tea
 4.30-6.00   Papers by Valpy Fitzgerald and Amitava Dutt:
discussant
             Lawrence Harris
             "An LDC/NICs Perspective"
       =


NB there will be a charge of =A310 for lunch and refreshments;
please let Philip Arestis know by 12 May if you require lunch
(Professor Philip Arestis,
Department of Applied Economics, University of East London,
Longbridge Road,
Dagenham, RM8 2AS). The pksg will reimburse UK travel expenses in
the usual way.


Friday 16 June 2.00-7.30

   Venue: as for 5 May 2.00-3.15 Maurizio Caserta (Catania)
"Endogenous
                                 change, open systems, and
provisional
                                 equilibrium" 3.15-3.45 Tea/Coffee
3.45-5.00 Heinz Kurz (Graz) "The Hayek-Keynes-Sraffa controversy
          reconsidered"
5.00-6.15 Adrian Winnett (Bath) "Savings:
          fungibility, liquidity, and Kaldor"

6.30-7.30 Party hosted by Routledge Journals to mark their
relaunch of the "Review of Social Economy"


After the meetings on 5 May and 16 June, we will take the speakers
for a meal; you are welcome to join us at your own expense,
usually about =A312 per
head.


There follows the pksg newsletter, edited by Sheila Dow


              PKSG NEWSLETTER ISSUE NO 2 MARCH 1995

EDITOR'S CORNER

Greetings once again. Thank you to those who have sent in material
for this second newsletter.  Please keep it coming. I am conscious
that there are bound to be all sorts of items of interest which I
don't happen to come across, or which are not sent in for the
newsletter; please help me to make the coverage more complete.

As well as providing information for members of the study group,
it has become clear that the newsletter is a good medium for
publicising the group. If you know of anyone who might be
interested, or if you are going to a conference, please make
copies of your newsletter and pass them around. In turn, the
newsletter is a good vehicle for publicising other groups,
conferences, newsletters etc of interest to PKSG members. So if
you want something of that sort publicised, or have contacts who
would like to pu blicise their activities to the PKSG, please let
me know.

I amparticularly interested in using the newsletter as a vehicle
for fostering
contacts with other Post Keynesian groups. So I am happy to be
able to include a piece on the Dutch-Belgian Post Keynesian group
in this issue, along with an account of the PKSG itself, and plan
to have pieces on other groups in future issues. If you already
have contacts with other Post Keynesian groups, please let me know
and I'll be happy to include material on them. In addition, it is
important in fostering relations with other groups that we have a
list of PKSG members' research interests available to provide to
other groups (who will do likewise for us), so that individual
researchers can build up international contacts in their own
research areas.  So could you please s end the information on
e-mail to Adrian Winnett (on A.B.Winnett@xxxxxxxxxx).

We are trying to get as many members as possible onto e-mail. It
is obviously cheaper to provide the newsletter on e-mail than in
hard copy.
But in addition, if we had a sizeable UK Post Keynesian network on
e-mail, there would be all sorts of possibiliti es: for exchanging
abstracts of work-in-progress, views on particular topics of
interest etc. This would allow the aims of the PKSG (outlined
below) to be pursued in new and hopefully fruitful ways.

Sheila C Dow
Department of Economics
University of Stirling
Stirling FK9 4LA
fax: 01786-467469
e-mail: S.C.Dow@xxxxxxxxxxxxxx


THE FUTURE OF POST KEYNESIANISM

In the first issue of the newsletter, Fred Lee put forward a
pessimistic future for Post Keynesianism. The institutional system
is seen as the key in Lee's view. If departments of economics are
under pressure to hire mainstream economists whose work is
publishable in the 'core' journals, then Post Keynesians will not
be appointed and the approach will wither.

While there is the tendency at work which Lee identifies, I wonder
if it is as all-pervasive as he supposes. There are other
departments than those of economics. In the UK for example,
departments of sociology and of business (very often involving
people trained in economics) are taking an interest in economic
matters concerning the firm and the nature of economic development
(generally local development). Avoiding rigid disciplinary
boundaries and scholarly elitism is surely the right road for Post
Keynesians. Moreover many mavericks lurk in the former polytechnic
departments of economics. There is in addition the continuing
possibility of defections from neoclassicism. Many Post Keynesians
did not start in their undergraduate days with a Post Keynesian
training. Most have looked at the neoclassical approach and found
it wanting; they have adopted a Post Keynesian approach as an
alternative which seemed more close to reality and more
satisfying. This process is not likely to decline, although always
invo lving a small fraction of those trained in the neoclassical
paradigm.

An article which may have been missed by most Post Keynesians in
the UK is 'The Future of Post Keynesianism in Canada', British
Journal of Canadian Studies, 9(2), 1994, written by two political
scientists, M Howlett and M Ramesh. The authors define Post K
eynesianism around state involvement in the economy, and in
particular around an endorsement of incomes policy.
Post Keynesians in the UK may be both startled and entranced to
find that 'Post-Keynesianism is emerging rapidly as the dominant
paradigm in th e theoretical discourse on Canadian political
economy in the 1990s' (p.295).
Lest this promote an undue surge of optimism it must be noted that
the authors consider this consensus unlikely to have any effect on
policy in Canada, or indeed to last. Neo-liberalism is still
firmly in control of the policy agenda there as here.

I do think that this article poses a question about the focus of
UK Post Keynesianism. Can UK Post Keynesianism be identified with
a coherent policy agenda? Related to this question is the breadth
of coverage of Post Keynesianism, and thus the scope for p olicy
prescription. Naturally enough, Post Keynesians have had an
orientation towards macroeconomics, their major inspiration being
the work of Keynes. However, an alternative paradigm to the
mainstream has to have a wider range than macroeconomics and mo
netary economics. Such range is provided by the work of Lee
himself, and by others such as Peter Earl. But the emphasis as
reflected in Post Keynesian publications is still on the areas of
macro, money and methodology.  (See V. Chick, 'Is there a case for
Post Keynesian Economics?', Scottish Journal of Political Economy,
42(1), Feb 1995.) Further, even in the macro and money fields,
explicit policy recommendations are thin on the ground.

The call I would make is for Post Keynesians to look to the
applied and policy-oriented aspects of the discipline as well as
the methodological and philosophical, important as these latter
undoubtedly are in the struggle to establish a different view of t
he world.  One of the great strengths of neoclassical economics,
it has to be recognised, is its policy applicability. If there is
a problem in any part of the world relating to industry, economic
development, finance, housing, etc, it is always possible to
construe a policy argument using the tools of neo-classical
economics. This cannot be said of Post Keynesian economics in any
other than the macro and monetary sphere.

Finally, Post Keynesianism is not the only non-neoclassical
approach.
Evolutionary economics has a thriving organisation with a European
base and an interdisciplinary orientation, albeit centred on
economics. In a review article forthcoming in the Scottis h
Journal of Politicial Economy, Geoff Hodgson argues that
evolutionary economics is now looking at a division between those
who wish to continue with a formalistic approach, building
mathematical models, and those who wish to abjure formalism as
unsuitab le to the evolutionary metaphor. An equivalent debate
could be conducted by Post Keynesians. Looking outwards to other
non-mainstream groups may enrich the agenda, and also draw new
recruits from parallel approaches.

There might also be an inspiration to be gained from the political
economy tradition. In particular, the concern for policy relevance
contained in the Scottish political economy tradition could be
emulated. While it is relatively easy to gather together o n a
platform of not being neoclassical, it is harder to build a
coherent alternative paradigm. For my part I do not think there is
necessarily a conflict between Post Keynesianism, Evolutionary
Economics, Scottish Political Economy, Canadian Political Economy,
etc. The notion of tolerance is one which has considerable
credibility within Post Keynesian circles, drawing on Post
Keynesian philosophical foundations. With tolerance for the
legitimacy of what others have tried to do it is possible to move
forwa rd with beneficial enrichment arising from contacts between
the various non-neoclassical approaches. For Post Keynesianism,
however, I would suggest that this requires a broadening in terms
of areas of study and a more conscious awareness of the policy
implications of theory.

Alistair Dow
Glasgow Caledonian University




LETTERS TO THE EDITOR

Dear Sheila,

I enjoyed receiving and reading your newsletter. Unfortunately I
have to accept Fred's thesis about the euthanasia of PK
economists. Yet, I believe that the issue is political. In other
words, without struggle for pluralism we will always lose. As soon
as we start to accept the rules of the games, such as 'publish in
the top 10, otherwise you are out...'etc, then we get squashed
independently of quantity and quality of publications. At the same
time a passive acceptance of the present situation, while wor king
without falling prey to a 'top 10' syndrome, is equally useless.
This has been my experience at the University of Sydney.
It is necessary to organise in order to fight.

At a meeting of the European Society of Evolutionary Economics
held in Bergamo in June 1994, Pasinetti in his opening address
stressed precisely the absence of pluralistic attitudes among
mainstream economists. He read from an article, by Kirman,
publishe d in the Newsletter of the Royal Economic Society, in
which Kirman talked about measuring excellence only in terms of
neoclassical journals. That article was not just an opinion but a
submission to the European community on how to evaluate and
support res earch. It is necessary, in my view, to politicise the
issue of pluralism given that academic work will receive little
recognition.

Yours, etc, Joseph Halevi, Universite de Grenoble, 17 January
1995.


Dear Sheila,

In Issue 1 of the Newsletter Fred Lee advocates post-Keynesians 'eliminating
mainstream economics from their own courses' and criticises post-Keynesians
for 'not teaching it to their students in place of mainstream theory'.
Apparently the continued success of post-Keynesian economics is dependent
on students being 'inculcated with that view'.

I was unaware that post-Keynesians had produced a universally accepted body of
doctrine which was available for 'inculcation'. The work of Kaldor, Kalecki,
Robinson and Weintraub is important to put before students, but equally
important is the critique which has been made of these writings.

A department which eliminated mainstream economics from its courses and taught
post-Keynesianism in place of, rather than as a critical alternative to,
mainstream economics would do its students a great disservice. They would
be unable to engage with the opposition as they would be unaware of the
mainstream's methodological approach and its deficiencies. The writings of
Keynes, Kalecki, Robinson and Weintraub could not be fully understood without
knowledge of its historical context and the mainstream theory against which
they were rebelling.

In the social sciences, which are inevitably controversial, the real threat to
the survival of radical paradigms arises from any suspicion that its
enthusiasts practise academic intolerance. In Conversations with
Post-Keynesians, John King notes that I ha ve established a post-Keynesian
department within the confines of a Business School and if there had been any
suggestion that we were offering anything other than a genuinely pluralistic
education to our students my efforts would certainly have been thwarted.

At De Montfort our coverage is determinedly pluralistic; we provide a full
coverage of mainstream micro and macro theory, which is accompanied by a
detailed critique and a presentation of alternative paradigms. Included in our
core theory subjects in third year are the capital controversies, Sraffa,
post-Keynesian wage and employment theory and a critique of new growth theory.
Students read the work of Davidson, Kalecki, Kaldor, Robinson,
Garegnani, Cornwall and Weintraub, but we ensure a careful treatmen t of
contemporary mainstream theory in second year.

I believe that post-Keynesian economists were better advised by the editorial
writer for EAEPE than by Fred Lee: 'There is a need for a more tolerant and
permissive atmosphere, and for genuine, scientific competition between several
rival paradigms in our discipline. In our view, economics should retain its
standards of rigour but be more open and pluralistic...Such  pluralism should
not undermine the standards of rigour; an economics that requires itself to
face all the arguments will be a more, not a less, rigorous science.' (EAEPE
Newsletter no.6, July 1991)

Peter Riach
De Montfort University
24 March 1995


The UK Post-Keynesian Economics Study Group

The Post-Keynesian Economic Study Group was established in October 1988 by
Victoria Chick and Philip Arestis with a grant from the Economic and Social
Reserach Council to cover the travel expenses of participants. We have a
meeting at least once a term, a t which normally three papers are presented
and discussed. In addition the Group has organised four conferences to date,
and a series of volumes of papers published by Edward Elgar, and the
proceedings of the 1993 Keynes Seminar to be published by Macmillan. The
purpose of the Group is to provide a forum for the presentation and active
criticism of research along Post-Keynesian lines, to promote contact among
those of similar views, and thereby to encourage still further research and
dissemination of resu lts amongst interested specialists.

The Dutch-Belgian Association for Post-Keynesian Economics

The Dutch-Belgian Association for Post-Keynesian Economics (APKE) was formed
in 1980 and currently has about 110 Dutch members and 20 Belgian members. Its
main acitivties include the organisation of an annual international
conference, which normally takes
 place in November; an annual seminar on a topic related to the same year's
conference theme; and a Newsletter. The APKE wants to provide 'a platform for
critical reflection on modern economic thought'. Its current members are
interested not only in post- Keynesian thinking, but also in Marxian and
institutional-behavioural perspectives on reality. The Association's main aim
is to promote and stimulate innovative approaches in these areas of economic
thought. APKE has strong empirical interests, which are reflected in the
conference themes. The annual conference and seminar normally focus on one
particular theme which is considered from one or more of the above-mentioned
perspectives. Past themes have included Economic Power, Keynesianism Today, A
Dual Wor ld Economy, Post Keynesian Thought in Perspective, International
Economic Order, Environment, Economy and Sustainable Development, Rethinking
the State - Scope and Limits of National Policy in a World Economy, Dynamics
of the Firm, and Labour Migration. The 1995 conference on Economics and
Evolution will be held in Utrecht in early November. Since 1992 the conference
proceedings have been published by Edward Elgar. Anyone interested
in the activities of APKE may contact one of the members of the board: Jo e
Brenner (Univ. of Utrecht), Julien van den Broeck (Univ. of Antwerpen), Frans
Buelens (Treasurer for Belgium, Univ. of Antwerpen), John Groenewegen (Erasmus
Univ. Rotterdam), Bob Gouzwaard (Chair, Free Univ. Amsterdam), Carla
Naastepad (Treasurer for N etherlands, Erasmus Univ. Rotterdam), Servaas Storm
(Newsletter, Erasmus Univ, Rotterdam) and Emiel Wubben (Secretary, Erasmus
Univ. Rotterdam).


Newsletters

The Marshall Studies Bulletin is a yearly newsletter whose aim is to circulate
information on Alfred Marshall and on Marshallian studies.
contributions (articles, announcements, book reviews and curiosities) are to
be sent to: Marshall Studies Bulletin, Dipartimento di Scienze Economiche, Via
Curtatone, 1-50123 FIRENZE, Italy. For free copies of the Bulletin, please
write to Miss Philomena Guillebaud, Marshall Library of Economics, Sidgwick
Ave., Cambridge CB3 9DB.

International Economic Association Newsletter: for further information, please
contact the IEA Secretariat, 23, rue Campagne Premiere - 75014 Paris -
France.


Journals

The Review of Social Economy. From Spring 1995 the Review will be published by
Routledge. It is the journal of the Association for Social Economics, which
was formed over 50 years ago 'to advance scholarly research and writing
about the great questions of economics, human dignity, ethics, and
philosophy.' The Review is edited by John B Davis, Dept of Economics,
Marquette University, Milwaukee, WI 53233, USA, fax (414) 288-1660, e-mail:
6286davisj@xxxxxxxxxxxxxxxx The UK board members are Philip Arestis and Geoff
Hodgson. The annual subscription in UK/EU is =A332.00.


New Books

Peter Earl, Microeconomics for Business and Marketing: Lectures, Cases and
Worked Essays, Elgar, 1995

John King, Conversations with Post Keynesians, Macmillan, 1995.


Conferences

Conference on Money, Financial Institutions and Macroeconomics, York
University, Toronto, Canada, 10-12 April 1995. For more details contact Avi
Cohen (ecchair@xxxxxxxxxxxx) or John Smithin (jsmithin@xxxxxxxxxxxxxxxxxx).

History of Economic Thought Autumn Conference, Trinity College Dublin, 6-8
September 1995. Proposals for papers (abstract of up to 250 words) to Antoin
Murphy, Dept of Economics, Trinity College, Dublin 2, Ireland. Fax
(3531)6772503.

International Economic Association, Eleventh World Congress, Tunisia, 18-22
December 1995. For further information and to submit proposals for papers for
history of thought sessions, contact Heinz Kurz, Dept of Economics, University
of Graz, Graz A-8010, Austria.

L'Utilitarisme: Analyse et Histoire, Association Charles Gide pour l'Etude de
la Pensee Economique, Universite de Lille I, 25-6 January 1996. Proposals for
papers (3-4 pages) to be sent to Prof. A L Cot, Faculte des Sciences
Economiques et Sociales, Unive rsite des Sciences et Technologies de Lille
(Lille I), 59655 Villeneuve d'Ascq CEDEX-FRANCE. Fax:20.43.66.55; e-mail:
Bernard.Delmas@univ-lille l.fr

European Conferences on the History of Economics, Second Annual Meeting,
Lisbon, 8-10 February 1996. For further details, contact J L Cardoso,
Technical University of Lisbon, Rua Miguel Lupi, 20, 1200 Lisbon, Portugal.


People

Robert Skidelsky has been made a Fellow of the British Academy.


Abstracts of PKSG Seminar Papers

MEETING 12 DECEMBER 1994

Alan Freeman, The Dynamics of Price and Value: A Non-equilbrium Approach
This paper argues that the Walrasian equilibrium tradition is a fundamentally
flawed foundation for economic dynamics; the assumption of market clearing and
constant prices cannot be removed and is responsible for most of the theory's
well-known shortcom ings, in particular the absence of money, the assertion of
perfect knowledge, the lack of a market adjustment mechanism, the assumption
of actually equal profit rates and the absence of technical change. The same
weaknesses permeate the traditional formal isation of Marx's
value theory. The paper presents a new formalisation of this theory without
the assumption of equilibrium. On this basis it establishes a general formula
for the formation of price from abstract labour, assuming exchange at general
marke t prices. This demonstrates both Marx's two equalities to be true under
all circumstances. the paper establishes that, contrary to the results from
static formulations, the rate of profit can and does fall even though
productivity improves continuously. Finally it establishes the material basis
for liquidity preference and suggests a value-theoretic account of the
mechanism behind periodic booms and slumps.

MEETING  3 FEBRUARY 1995

Robert Evans, How Do They Do That? The Role of Econometrics, Extrapolation,
and Judgement in the Economic Forecasts of the Seven Wise Men

For many social scientists, and not just economists, the idea of identifying
mechanical laws or rules underlying human action has had a strong appeal. The
paper examines how macro-econometric modellers attempt to identify such laws
and makes two points: one negative and one positive. The critical point is
that macro-econometric modelling's scientific appearance is little more than
skin deep. The search for precise and stable quantitative relationships with
which to forecast the future accurately is, as Ke ynes recognised, a search
for the Holy Grail. However, I do not want to argue that macro-econometric
modelling is of no value whatsoever, and this is the positive point. Economic
modellers and forecasters probabaly know more about the economy than anyone
else, and possess this knowledge because they have spent most of their working
lives trying to model it. Constructing, maintaining and up-dating
macro-econometric models compels a small group of people continuously to
monitor the economy and, perforce, to become experts about it. The argument is
illustrated in two parts. First, I attempt to replicate some econometric work
done by Giles Keating in the early 1980s and examine how equations estimated
using data up to 1980 have been altered by the events of t he following twelve
years. The aim of the analysis is to show not just the sensitivity of
econometrics to the sample period used but the ways in which economists'
judgement is routinely used to over-ride econometric evidence.
The remainder of the paper illustrates how a macro-econometric model is used
to produce an economic forecast. Drawing on the first meeting of the Panel of
Independent Forecasters, I demonstrate that, in the final analysis, it is not
the model which determines the forecast, but the judgement of the
economist(s). The argument is illustrated by showing how a single econometric
model can be used to produce forecasts consistent with any of the Seven Wise
Men's individual positions.

Peter Docherty, Endogenous Money and Effective Demand

Monetary endogeneity is known to cause price-indeterminacy in neoclassical
models. This result is often misinterpreted, however, and has been used in
recent literature to underestimate the importance of monetary endogeneity for
the succesful operation of the principle of effective demand. This paper
offers an interpretation of the price-indeterminacy result which indicates the
importance of endogenous money for Keynesian theory. It is argued that under
certain assumptions monetary endogeneity is a necessa ry condition for
a theory of output to be characterised by the principle of effective demand
and similarly that under certin assumptions a necessary condition for a theory
of output to be characterised by Say's Law is that it be combined with
the quantity theory of money to determine the absolute price level. Some
recent discussion of the conventional nature of the rate of interest is then
examined in the light of this interpretation of the neoclassical result.

Jens Holscher, The Monetary-Keynesian Approach to Economic Development:
Evidence from West Germany and Central East Europe

The West German experience of strong accumulation in the 1950s is considered
to find elements for a theoretical model of economic development. The stylised
facts of the post-war 'miracle' in the light of the Monetary Keynesian school
of thought (the 'Berl in School') are: currency reform of 1948, crisis
management of 1950/51 and the London Debt Agreement of 1953 as fundamental
conditions of an undervaluation strategy. Elements of a pure theory of
accumulation in Keynes' 1933 tradition of a monetary product ion economy are:
the fundamental equations of the Treatise on Money, a Sraffa model of
production and the central bank providing the budget constraint. The
outcome is an export-led growth model for economic development requiring for
'monetary mercantilism '. A mental experiment on the post-socialist terrain of
Central-East Europe suggests that the capital-import-type approaches exercised
in Hungary and Poland are inferior conceptions compared to the Czech policy of
monetary stabilisation and internal accumulation.

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