Re: Why Heterodox are subject to be losers.

["Ric Holt" <rholt@xxxxxxx>]

Bill,

I understand your point. That's why I said I believed my Marxist friends would probably disagree. I'm particularly sympathetic to your point about conflict and power structures in an economy, which Marxists have developed major insights. But Keynes wanted to mitigate those conflicts through stabilizing markets through institutional arrangements. The big issue is which one provides a more general theory that is logically consistent and powerful in its explanatory ability? That's the question in my mind.
Best,
-Ric Holt

>>> Bill Mitchell <ecwfm@xxxxxxxxxxxxxxxxxxxxxxx> 03/09/03 17:02 PM >>>
Ric wrote (in reply to Fadhel):
>I agree with Paul. Mainstream economists believe that they have a "general
>theory," which can be applied to a variety of economic problems -- both in
>microeconomics and macroeconomics. They are even willing to experiment
>with their different postulates like rational choice, market
>concentration, etc. But they believe neoclassical economics, even with its
>many problems, provides a more comprehensive theory of how the real world
>works and that it is overall consistent. Keynes showed us the opposite
>that classical economics general theory is really more a special case, and
>Keynes tried to work out a model that really is more general in its power
>of explanation of how a modern capitalist society works. The work of Post
>Keynesians over the decades has been to expand, challenge and test
>Keynes's general theory. So far in my mind, Keynes's theory is holding up,
>and has been able to incorporate many of the important ideas of other
>heterodox schools like the Marxists, institutionalists,Austrians etc. and
>even some o

This is not clear. A Marxist would not accept that the fundamental axiom of
that approach
can be subsumed within the rather blurry starting point that one finds in
the GT.

In the GT there is no presumption of conflict between classes being the
driving force
in the dynamics of capitalism. Nor any fundamental analysis below exchange
values.

A general theory has to explain profits. A Marxian would reject the GT as
being unable
to do that, and would call it a special case of Marxian analysis.

That is why the groups that may be classified under the broad church PKT
are in fact
very divided and will never unite under Paul's GT banner. Some just reject
that starting point
outright and as misconstrued as the Neoclassical starting point.


best wishes
bill


------

William F. Mitchell
Professor of Economics
Director, Centre of Full Employment and Equity
University of Newcastle
New South Wales, Australia
E-mail: ecwfm@xxxxxxxxxxxxxxxxxxxxxxx
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http://econ-www.newcastle.edu.au/economics/bill/billeco.html
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