What's in a Name?

First of all, there is a question of terminology. Luigi Pasinetti’s 2007 book Keynes and the Cambridge Keynesians is divided into three parts. Book one, ‘Keynes’s Unaccomplished Revolution’, sets out the author’s views on the revolutionary potential of Keynes’s General Theory and on the failure of Keynesian economists to realise that potential. Book two, ‘The Cambridge school of Keynesian economics’, contains biographical sketches of Sraffa, Joan Robinson, Kaldor, Kahn and Goodwin and adds some critical reflections 11 years after the death of the last of these great ‘Cambridge Keynesians’ (Goodwin, who died in 1996). In the third and final part, ‘Towards a production paradigm for an expanding economy’, Pasinetti sets out his own theoretical system, which is intended to fill the large gap left by Keynes and his Cambridge disciples (Pasinetti 2007).

Pasinetti covers very much the same ground as Geoff Harcourt’s book on The Structure of Post-Keynesian Economics, which was published a year earlier and (despite its title) is devoted almost entirely to Cambridge economists (Harcourt 2006a). The appendix that Harcourt devotes to ‘biographical sketches of the pioneers’ contains brief accounts of the contributions of Keynes, Sraffa, Joan Robinson, Kahn and Kaldor—and Michal Kalecki, who was not a Cambridge economist but (as we shall see in Section 3) might well have become one. Not surprisingly, Harcourt’s review of Pasinetti’s book was detailed and enthusiastic (Harcourt 2009).

Pasinetti himself begins by quoting Keynes’s well-known 1935 letter to George Bernard Shaw: ‘To understand my state of mind, however, you have to know that I believe myself to be writing a book on economic theory which will largely revolutionise—not, I suppose, at once but in the course of the next 10 years—the way the world thinks about economic problems’ (Keynes 1973: 492, cited by Pasinetti 2007: 6). Pasinetti then outlines the sequence in which Keynes developed his revolutionary new theory between 1930 and 1932, invoking Thomas Kuhn’s 1962 Structure of Scientific Revolutions. On Pasinetti’s interpretation, Keynes’s critical break with orthodoxy was his rejection of the traditional ‘exchange paradigm’ in favour of an alternative ‘production paradigm’. Only in this context, Pasinetti argues, can the principle of effective demand be correctly understood (Pasinetti ibid.: 23-24).

Mainstream theorists like John Hicks had managed successfully to ‘accommodate’ Keynes by ‘trying to insert the Keynesian innovations into the prevailing paradigm’, Pasinetti suggests. In this they were assisted by ‘some of the more conservative-minded young economists of the Keynesian group, especially Harrod and Meade’ (ibid.: 30). The effect was profound: ‘[I]t meant reducing Keynes’s intended revolution to be no revolution at all’ (ibid.: 33). The true Cambridge Keynesians—to repeat, for Pasinetti these were Robinson, Kahn, Sraffa, Kaldor and Goodwin—‘made a remarkable effort to carry Keynes’s revolution to a reasonably advanced stage’ (ibid.: 34), but they failed to do so for a variety of reasons that are described in the second part of Pasinetti’s book. Thus, Pasinetti concludes, ‘the genuine Keynesian revolu- tion.Thas so far remained unaccomplished’ (ibid.: 50).

The attentive reader will have noticed the small but significant difference in the titles of the two books: Cambridge Keynesians (Pasinetti) versus (Cambridge) Post-Keynesians (Harcourt). Both have their problems. The former is too inclusive, since it could fairly be claimed not only by theoretical supporters of Old, neoclassical, ‘bastard’ or ‘IS-LM Keynesianism’ (Harcourt 2006a: 4), like James Meade, but also by applied economists such as Brian Reddaway and Richard Stone, and individualists such as David Champernowne, who were all happy to accept the label ‘Keynesian’ but would have been much less comfortable being closely associated with Harcourt’s ‘Post-Keynesian’ pioneers.

The latter is anachronistic, since it was only in the mid-1970s—when the intended revolution was already 40 years in the making—that the term ‘PostKeynesian’ ceased to be used in a purely chronological sense to refer to work published after 1936 and came to be associated instead unambiguously with a particular interpretation of what the ‘Keynesian Revolution’ was or ought to have been. Thus, Kenneth Kuriharas edited volume Post-Keynesian Economics contained several papers written from a neoclassical Keynesian or IS-LM perspective (Kurihara 1954), and around this time both Kaldor and Robinson were using the term in its chronological sense. The term ‘Neo-Keynesian’ was also often adopted in the 1960s and early 1970s to describe what later became known as ‘Post Keynesian’ theory, and Robinson flirted with the idea of an ‘Anglo-Italian school’ that recognised the contributions of Sraffa and several of his younger Italian colleagues, including Pasinetti (King 2002: 9-10).

In deciding on the title of this chapter, I have (more or less) followed Harcourt rather than Pasinetti, but not without misgivings, both substantive and grammatical. The two are connected. There are four ways of writing ‘Post Keynesian’, with or without a hyphen, with the ‘p’ in lower case or capitals. My grammar school English teachers would probably have insisted that the only correct version was ‘post-Keynesian’, and this (as Marc Lavoie has reminded me) is the usage that the Cambridge pioneers invariably adopted. It was not popular in North America. When Paul Davidson and Sidney Weintraub launched their journal in 1978, they called it the Journal of Post Keynesian Economics, using ‘Post Keynesian’ (capital letters, no hyphen) to emphasise the doctrinal rather than the chronological meaning of the term. This is the form that I have always employed. ‘Post-Keynesian’ is arguably wrong on both counts (and was only adopted by Harcourt at the insistence of his publishers), but it is clearly preferable to Pasinetti’s ‘Cambridge Keynesians’, for the (doctrinal) reasons already stated.