- 1.From a methodological and epistemological perspective, the criterion that allows differentiating the different theoretical matrices is the conception of the nature of capital, more than the value theory, or the absence of such theory.
These essays will define this criterion from the opposition between the universalist and the historicist thesis:
- (i)The universalist thesis is one of the fundamental components of the neoclassical school1: the neoclassical macroeconomic causality is based on the assumption that allows designing production function in which capital is conceived and evaluated as a constant quantity. It is a reification mechanism that conceives the capital as a “natural” process which remains the same over time, i.e., the same in terms of social value. Such natural conception denies the historical and social characteristics of the concept of capital. In this respect, Veblen (1908, p. 111) affirms that capital goods “are capital in the measure, not of their technological service ability, but in the measure of the income which they may yield to their owner”.
- (ii)On the other hand, the historicist thesis demonstrates that capital is not a thing but essentially a social relation; this means that its value must change over time. This also means that a constant value of an aggregate quantity of capital is equivalent to the perenniality of the different kinds of social relations, i.e., to the absence of History.
This debate is related to the substantial hypothesis (Dumont 1985; Orléan 2011): the acceptance or the refutation of such hypothesis defines this dichotomy. I will demonstrate why and how the (neo) Ricardian and the Keynesian2 approaches incorporate these historical components. In a certain manner, it would be possible to incorporate Marx in such historicist approach, insofar as his critic of the Classical Political Economics is based on the historicity of the economic concepts3; but I preferred focusing the study on the Ricardian and the Keynesian matrix.
Such theoretical debate is fundamental in regard to the construction of instrumental tools to interpret data and empirical phenomena: production function to evaluate GDP, catching-up in regard to the Solow’s model and the convergence thesis, and so on.
- 2.Capital heterogeneity is a constant problem in Economic Theory, as observed by Ricardo, Marshall and Keynes. On the other hand, Stiglitz’s works highlight the economic implications of information asymmetries: such asymmetries represent another modality of this heterogenization process.
From the moment when capital is heterogeneous, we must choose a common unit to express these heterogeneous capitals and to aggregate them. The temporal comparison becomes particularly complex insofar as the aggregate value is not constant in the different periods. As I will demonstrate, if capital value is the result of historically determined social relations, the aggregation problem may be formulated in the following manner: insofar as such social relations move with time, the value of an aggregate quantity of capital also moves. This is a patent manifestation of Historicity.
At the micro and meso levels, I will study such aggregation process from Keynes and Stiglitz’s results. In regard to the macroeconomic level, I will use Ricardo, Keynes and Sraffa’s works.
- 3.Besides some appearances, I will justify the methodological convergences between neo-Ricardian and Keynesian, and Keynes and Stiglitz; such convergences are not based on the surplus approach nor on the scientific program that conceives the effective demand as short-run fluctuations, and the prices of production as a long-run equilibrium, but on the common conception of capital based on its historical dimension.
In the General Theory,4 Keynes refutes Ricardo’s position in regard to the money neutrality (GT, pp. 18 and 29). It is also true that the concept of production prices is not compatible with the post Keynesian approach:
- (a)from a post-Keynesian approach, there is not a predetermined long-run equilibrium position (Carvalho 1983–1984) represented by production prices. As said before, such point highlights methodological incompatibilities. I will focus my analysis on the conception of the capital, in the manner Ricardo and Sraffa did.
- (b)From the moment when the value of an aggregate quantity of capital is not constant over time, it is no longer possible to conceive a convergence toward an invariant position of long-term equilibrium, as Solow did (1956), for example. The final position is a shifting equilibrium, which includes path dependence, and not a stationary one anymore.
- (c)Consequently, it is no longer possible to define Ricardo’s method as “hypothetical deductive”. On the contrary, as demonstrated by Sraffa (1960), this method is historical: the long-term equilibrium value depends on the changes in distributive variables. The historical dimension is present.
- (d)Finally, Keynes, as Ricardo did in his differential rent theory, updates the value of the whole stock of capital in every period of production.
In regard to the financial capital, Keynes and Stiglitz’s approaches are complimentary: Keynes shows why such value is self-referential and based on information asymmetries. Grossman and Stiglitz (1976, 1980) design models based on such asymmetries.
- 4.Theses essays will be structured in the following manner: in Part I, I will define, from an epistemological perspective, the various dimensions of Historicity. In the second chapter, I will study the nature of the scientific laws, in regard to the universalist/historicist epistemological dichotomy. Then, I will demonstrate how this opposition expresses within the methodological determinism versus indeterminism debate. At this respect, I will study what conception of Time sustains each position, from entropy laws and from Prigogine’s works.
In Chapter 3, I will define the Lakatosian epistemological perspective, and I will justify this choice in regard to the Historicity; I will use such methodological tools to make a rational reconstruction of the internal History of Economics. Then I will define, from a Lakatosian approach, the Neoclassical Scientific Research Program (SRP): I will emphasize its internal coherency problems, more specifically in regard to the use of marginalist approach and differential calculus applied to Economics and, within a larger perspective, I will demonstrate how and why the (neo) Ricardian, the Keynesian and the Stiglitzian schools allow refuting this neoclassical SRP.
In Chapter 4, I will justify the epistemological convergences between Ricardo, Keynes and Stiglitz. I will show how each author studies the capital heterogeneity, and its implications, in the micro, the meso and the macro levels.5 I will try to define the nature and the function of the labor value theory used by Ricardo and Keynes, and finally, I will dedicate a special attention to Keynes and Stiglitz’s interpretations of the financial speculation; these authors refute the fundamental value concept used by the neoclassical economists: at the contrary, the value is self-referential, and determined by inter-individual relationships.
In Part II, I will apply such epistemological choices to study how the three authors (Ricardo, Keynes and Stiglitz) explain and incorporate in their theoretical frameworks the heterogeneity of capital. I will follow a chronological order: I will begin with Ricardo’s theory of differential rent, in Chapter 5. Such theory highlights the problem related to the heterogeneity of factors of production, and its results are not limited to the land, but linked to all types of heterogeneous capital. I will demonstrate why the neoclassical interpretation of Marshall is erroneous and in which way Historicity is a fundamental component of the Ricardian (and the Sraffian) Economics.
In Chapter 6, I will focus my anal...