[OPE-L:5767] Re: heterodox theories of value

From: Steve Keen (s.keen@uws.edu.au)
Date: Sun Jun 03 2001 - 19:36:47 EDT

Not that I'd normally offer to speak for P(aul)D(avidson), but the essence 
of the P(ost)K(eynesian) tradition is that there is no theory of value. 
They promote what they call a 'horses for courses' approach that whatever 
methodology applies for a given question is OK. This position has been well 
critiqued (from a neoclassical perspective) by Roger Backhouse, asking that 
if any methodology is OK, why do they object so strongly to neoclassical 

On utility theory and marginalism, these neoclassical concepts are almost 
universally rejected by PKs, though for a wide range of reasons. There is 
currently a discussion on PKT in which several list members have expressed 
amazement that other members of the list believe that neoclassical micro is 
useful. Their incredulous position would be a mainstream PK attitude to 
neoclassical value theory.

The reality is, as you say, that they are simply avoiding the question of a 
theory of value. However, they have good arguments in favour of so doing: 
"just look at the marxists" is a common refrain (sorry guys, but as Jerry 
pointed out w.r.t. Rakesh resurrecting the TP discussion again 
recently,...), and "just look at the neoclassicals" is another.

My perspective--which I've drafted in a paper which was rightly given a 
'revise and resubmit' by the referee (but rejected on the basis of that one 
report by the editor of the journal in question)--is that PK theory can be 
built and richly enhanced by adopting Marx's dialectical theory of value. 
But the fear that 'there lies madness' makes my position a uniquely 
unpopular one there. I will endeavour to make the case more elaborately in 
future papers--I have already done so to some limited degree in a paper in 
Riccardo Bellofiore & Piero Ferri's *The legacy of Hyman Minsky*.

So yes, I take the PK position on a theory of value as bunk, and I have 
said so in print.

But I also believe that, unencumbered by a flawed theory of value, Post 
Keynesians are more like what Marxism would have evolved into, had it not 
been waylaid by its flawed theory of value and hence by the TP. There are 
other technical flaws too--largely a lack of appreciation of dynamics and 
evolutionary theory.

At 12:24 AM 6/4/01 Monday, you wrote:
>Re Steve K's [5759]:
> > In other words, like the majority of non-orthodox economists, they have 
> long abandoned any explicit reliance on Marx because they don't want to 
> be tainted with the brush of the labour theory of value. <
>Yes, there are political implications of what you
>call the LTV that they perhaps are not ready for.
>So it has been since the 'marginalist (counter-)
>revolution' against the political implications of cpe
>and the Ricardian socialists.
>Yet, what theory of value do these heterodox
>economists adhere to? Of course, surplus
>approach economists (like Gary and Ajit) have
>a theory of value. But, what about the rest of
>them?  What, for example, is the 'Post-
>Keynesian'   (or Post-Kaleckian) theory of value?
>E.g. what theory of value does 'PD' advocate on
>PKT?  Have they -- yet -- thoroughly and
>completely abandoned the marginalist dogma
>including the marginal utility theory of value?
>Or do they just sidestep the whole issue (and
>thereby one of the fundamental issues of political-
>economic theory) by not explicitly putting
>forward a theory of value that they advocate (so
>that it can then be subject to critique)?   If
>that is the case, then perhaps we should view
>them as a (a-theoretical) neo-institutionalist
>(unprincipled) combination which has a clearer
>idea about what they reject than what they accept?  If so, isn't that just 
>plain ... bunk?
>In solidarity, Jerry

Home Page: http://www.debunking-economics.com
Dr. Steve Keen
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Economics & Finance
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