Wednesday, April 9, 2014

Heterodox Economics: A Family Tree

Following on from the last post, I post below a diagram of the left heterodox economics schools. This is a provisional diagram only, since the subject is a difficult one. Once again it needs to be opened in a separate window to be properly viewed.

I use the term “broad tent Post Keynesianism” for Post Keynesianism in the broadest sense, incorporating the different sub-schools, as described by Marc Lavoie in his talk below (from 50.37) and this fascinating paper here, with some minor differences: for example, I do not regard MMT as an Institutionalist tradition but within the broad Post Keynesian tradition (I discuss the history of MMT here).

On the extreme right I have included a column with some neoclassical schools for clarity (such as Neoclassical synthesis Keynesianism and Post Walrasianism).

I have also chosen to include Abba P. Lerner in that column (which some might find controversial).

The schools or approaches I have left out include:
(1) Ecological Economics;

(2) Econophysics;

(3) Behavioural Economics;

(4) Evolutionary Economics;

(5) Herbert Simon and the behaviouralist school;

(6) Development Structuralists (Latin American School);

(7) Participatory economics;

(8) left libertarian economics such as syndicalism.

(9) the 19th century British Banking School.
It appears to me that some of these groups are not really coherent economic schools at all (e.g., behavioural economics), and some are still heavily influenced by neoclassical economics.

Others I have left out simply because there is not enough room for them on the diagram!

One interesting but neglected historical school was the 19th century Birmingham School, a proto-Keynesian group of economists.

Further Reading
“Neoclassical Synthesis Keynesianism, New Keynesianism and Post Keynesianism: A Review,” July 7, 2010.

“Non-Neoclassical Institutionalism: A List of Economists,” March 13, 2014.

“The History of Modern Monetary Theory,” January 3, 2012.

“Axel Leijonhufvud and the Post-Walrasians,” May 13, 2011.

“Post Keynesian Economists: A List,” March 1, 2012.

Davidson, P. 2003–2004. “Setting the Record Straight on ‘A History of Post Keynesian Economics,’” Journal of Post Keynesian Economics 26.2 245–272.

Davidson, P. 2005. “Responses to Lavoie, King, and Dow on what Post Keynesianism is and who is a Post Keynesian,” Journal of Post Keynesian Economics 27.3: 393–408.

Davidson, P. 2005. “The Post Keynesian School,” in B. Snowdon and H. R. Vane (eds.), Modern Macroeconomics: Its Origins, Development and Current State. Edward Elgar, Cheltenham. 451–473.

Dunn, S. 2000. “Wither Post Keynesianism?,” Journal of Post Keynesian Economics 21.3: 343-366.

Kaboub, F. 2001. “Conversation with Stephen P. Dunn,” Oeconomicus 5 (Fall)

Lavoie, Marc. 2011. “History and Methods of Post-Keynesian Economics,” in Eckhard Hein and Engelbert Stockhammer (eds.), A Modern Guide to Keynesian Macroeconomics and Economic Policies. Edward Elgar, Cheltenham.

Lavoie, Marc. 2014. “To which of the Five Streams of Post-Keynesianism does John King belong?”



    (1) I'm confused that you title the diagram "Non-Neoclassical Schools" and then include neoclassical schools. Perhaps you should rethink the title.

    (2) I really don't get why Abba Lerner is included in the neoclassical school. How do you justify this? Is it because of his ties with market socialism? Or is it because of that awful stuff he did about distributive justice based on diminishing marginal utility?

    (3) Place an arrow running from Kalecki to the Cambridge School. Basically everything they did was tied up with Kalecki's work (the Cambridge equation etc.).

    (4) You should probably include the 2nd generation Cambridge school (i.e. Garegnani and Passinetti) and have influences coming from the 1st generation and Sraffa.

    1. Interesting points:

      (1) well, the inclusion of a few neoclassical schools on the right that derived from Keynes is there for clarity only.

      (2) On Lerner, I don't think he really did make a clean break with neoclassical theory, although he was obviously a maverick too. E.g., as you say, he was still using neoclassical theory underlying his market socialism and some other ideas.

      Also, I think many still do classify him as belonging to the neoclassical synthesis.

      I mean just look at Oscar Lange too: he was a Marxist using neoclassical theory to argue for socialism!

      (3) yep, good point, I will add that in a new version of his chart.

      (4) Weren't Pierangelo Garegnani and Luigi Pasinetti Sraffians? I do know them and meant to include them in the "Sraffians" group.

    2. (4) Garegnani was definitely more so a Sraffian. Pasinetti? I'm not sure. He is a Sraffian in some sense but he also contributed to Cambridge growth theory in a big way which is a Post-Keynesian theory.

    3. Oh, and Wynne Godley needs to be put somewhere. Maybe in the Kaldorian tent. You might want to put Tony Thirlwall in there too.

    4. It is tricky to know where to put Wynne Godley.

      But Lavoie does have a list of Kaldorians in his paper on King, and lists them as follows:

      Robert Boyer
      John McCombie
      Ken Coutts
      Ro Naastepad
      Neville Norman
      Tom Palley
      Pascal Petit
      Mark Setterfield
      Peter Skott
      Servaas Storm
      Anthony Thirlwall

      Lavoie, Marc. 2014. “To which of the Five Streams of Post-Keynesianism does John King belong?”
      Godley is listed as an influence on the Kaldorians, but not one of them.

    5. I'd call Godley a Kaldorian. He explicitly said that he was formalising Kaldor's work.

      I would not put Tom Palley in there at all. I don't know why Lavoie does that. Palley is a static equilibrium theorist in the strictest of senses.

  2. Also, Richard Kahn in the Cambridge School.

    1. There's no doubt in your mind that Richard Kahn did make a clean break with neoclassical theory?

      If so, I will include him in a corrected diagram.

    2. Yes. And he was part of the Cambridge School.

  3. May I suggest that when this is complete we upload it to Wiki?

    1. Sounds like a great idea.

      I'd like to get it accurate first, though.

      In the meantime, here is a more detailed list focusing on broad tent Post Keynesianism only: