Marx

In the early war years, Robinson wrote her book on Marx, in which she sought ‘to alert my bourgeois colleagues to the existence of penetrating and important ideas in Capital that they ought not to continue to neglect’ (Robinson 1977: 50). This included translating selected elements of Keynes’s analysis into relevant elements of Marx (Robinson 1942). Her views on Marx were influenced by her discussions with Dobb and Kalecki, if not always in the ways they were intended. Both Keynes and Kalecki provided the analytical grounds for a new theory of output and employment. Most controversially, they argued that there was no tendency within the capitalist economy to move it towards full employment. But Kalecki went further, and adapting Marx’s schema of reproduction, he demonstrated that the capitalist process contained its own contradictory forces which would send it away from full employment and stability. These fundamental forces arise out of the nature of exploitation of labour and the production and appropriation of the surplus product. They cre' ate an inherent tendency for underconsumption and stagnation, which further stifles ‘animal spirits’ and dampens investment, leaving potential unrealised surplus. Kalecki brought together a theory of the trade cycle within a longer-run perspective, so placing these problems into the actual structure of his analysis.

His account provided a more insightful basis for Robinson’s moral attitude towards the injustices of capitalism, for her own subsequent theory of growth and distribution than did Keynes’s Marshallian framework. Robinson’s adaptation of Marx’s classical schema clearly illustrated the necessary relationships in a two-sector economy of wage and profits income, and consumption and investment expenditure, on which to introduce ‘real’ features and build a progressively more complex theory. With given productivity of labour producing wage goods, and given real wage rates, the schema illustrated the conditions that the consumption goods sector had to produce sufficient to cover its own wages as well as the wages in the investment goods sector and that aggregate saving match aggregate investment (Kalecki 1936, 1939). The different savings propensities of the respective income groups made redistribution of income a process of achieving target investment aims. This redistribution takes place when the real value of given money wages in the wage goods sector is reduced by imposing a higher markup on its prices, the resultant surplus making it possible to expand the investment goods sector.

Robinson’s analysis, based on the ideas of Marx, Kalecki, and Keynes, directly addressed the problem of sustained unemployment. She introduced a distinction (Robinson 1937b) between unemployment that occurs due to lack of effective demand relative to the existing capital stock, Keynesian unemployment, and that caused by the capacity of the capital stock, a Marxian problem, which she terms ‘disguised unemployment’ or ‘underemployment’. She introduced the latter as being a characteristic particularly of undeveloped countries, requiring different policy responses to those of the Keynesian case. The distinction was adopted into the literature on development and continues to be used, both empirically and theoretically (Robinson 1936, 1937b, 1973). She also discussed (Robinson 1943) the political role of unemployment in maintaining a ‘disciplined’ workforce, an issue similarly examined at that time by Kalecki (1943). Through her understanding of Marx and of Kalecki, she both broadened the scope of what economists should comment upon and gave her own concepts more depth and her analysis more insight.

The unrelenting presence of mass unemployment throughout the 1930s was seriously questioning both the relevance, and the validity of the analysis, of the neoclassical status quo. Sraffas (1926, 1930) critique of Marshallian value theory had not been satisfactorily answered and the practice of laissez- faire policies and institutions had obviously failed to provide its promised prosperity. If the activities of the private sector were not reconciled with the public interest by the unhindered mechanism of free markets, some alternative economic system was needed. Robinson’s analysis, based on the ideas of Marx, Kalecki, and Keynes, directly addressed the problem of sustained unemployment.