Money, Banks and Finance in Economic Thought

Joan Robinson from the generalization of The General Theory to the development of an “Anglo-Italian” Cambridge tradition

Zeineddine Yara, Paris 1 - PHARE

The project of developing a synthesis between Post-Keynesian and Neo-Ricardian economics - known as the Post-Classical synthesis - is almost as old as the development of Post-Keynesian economics. This paper aims to highlight an early and often overlooked attempt to achieve such a task: that of Joan Robinson. After the publication of The General Theory of Employment, Interest and Money (Keynes 1936), Joan Robinson (1903-1983) gave herself the mission of disseminating Keynes’s message through vulgarizing his approach (Robinson 1936) and extending it to the long period (Robinson 1937). She deplored that Keynes did not study the long period well enough to assess the effects of the modification of productive capacity on the economy, and hence to discuss the determination of profits in the long term. However, her Essays in the Theory of Employment (1937) was criticized by Keynes himself (Kregel 1983) as he rejected her application of marginal analysis to a heterogeneous stock of capital. Following this, Robinson found a new inspiration in Sraffa’s introduction to Ricardo’s Principles (1951) as she acknowledged it in the foreword of The Accumulation of capital (Robinson 1956). There, she clearly pursues her objective of extending Keynes’s analysis to the long period by using the classics’ approach as depicted by Sraffa in 1951 . From this point on, extending Keynes’s analysis to the long period meant conciliating Sraffa’s approach with Keynes’s analysis of the short period (Rima 1991, Robinson 1977, Turner 1989) in what she called the “Anglo-Italian” Cambridge tradition. This was especially the case after the publication of Sraffa’s Production of Commodities by Means of Commodities (1960). Hence, reconsidering Robinson’s intellectual path can shed a new light on the coherence of the Post-Classical synthesis project, regarding the supposed incompatibility between the radical uncertainty characterizing Keynesian economics and the Sraffian self-reproducing system. Following Arena’s (1992) demonstration that this incompatibility only stands when considering production prices as long-run centers of gravitation, I show that Robinson’s conception of “normal prices” does not involve a gravitational process as it has been argued (Vianello 1996). Consequently, I question the statement according to which her recourse to long-run positions is paradoxical with her distinction between history and equilibrium (Asimakopulos 1984, Lavoie 2014).

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Keywords: Post-Classical synthesis, Joan Robinson, Post-Keynesian economics, normal prices

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