Commemorating 40th Death Anniversary

Harsh Thakor

2023 commemorates the fortieth year since the passing of Joan Robinson and her one-hundred-and-twentieth birth anniversary. Without doubt she was one of the most illustrative, logical and creative Marxist economists of her time, whose role path was breaking. Joan Robinson manifested Marxism to deliver a knockout punch to the conventional bourgeois economists and with unflinching resilience withstood all winds of capitalist ideas.

Since her death in 1983, modern economics has been taken to another dimension. Despite a completely new perspective at mark ups and imperfect competition and lack of competition, the assumption of perfect competition (‘potential’ if not actual) was restored and is well entrenched in economic analysis; Marxism has revived an interest in questions of value, the rate of profit, and inequality; and Keynesianism has crystallised into New Keynesianism and Post-Keynesianism. With political economy facing unparalleled challenges, the fortieth anniversary of Joan Robinson’s death and the one-hundred-and-twentieth anniversary of her birth in 2023 are most timely periods to analyse review her work and critical observations on twenty-first-century economics.

The outstanding endeavours of Robinson’s career awaken or enliven economics profession and policy makers to address our problems of inadequate demand, rising margins with falling competition, and widespread and seemingly intransigent inequality and its consequences. For Robinson the goal or objective of our discipline is in understanding the real world to pave path for all global citizens to enjoy life to the fullest.

Despite establishing her international reputation in the Marshallian tradition of economics, she came to regard her generalisation of John Maynard Keynes’s theories and their integration with Kaleckian and Marxian insights as her more progressive contribution, along with a resilient evident -based thought rebuking inductive mathematical modelling. Among an impressive body of work, three books by Robinson mark key moments in the evolution of her ideas: The Economics of Imperfect Competition (1933), An Essay on Marxian Economics (1942), and The Accumulation of Capital (1956) (Marcuzzo, 2003).

By the end of the 1930s, Robinson wanted to integrate academic and Marxian economics together in a quest for a more realist theory of the rate of profit and income distribution, along with clarifications on Keynes's concept of full employment and the nature of technical progress and a long-period theory within the Keynesian framework. The product, An Essay on Marxian Economics (1942), was her most important work in terms of laying the foundations of her sustained challenge to the orthodox economics. Here she adopted Marxian insights to evade Marshallian orthodoxy. It is the story of how the originator of imperfect competition made further inroads into a theory of exploitation.

In 1933, she made her international reputation with brilliant work within the orthodoxy on imperfect competition, offering an internal critique of the marginalist theory of distribution. Only a decade later, her reflections on reading Karl Marx persuaded Robinson to question the Marshallian methodology, in particular its polite theory of income distribution which became so incongruous during and after the depression (Marcuzzo, 2003).1 Finally, in 1956, she had the courage to follow the logic of her argument to examine the whole neoclassical theory of income distribution and its predominant method, facing the might of the now dominant American economics profession in the [in]famous capital controversy. She had to accept the pyrrhic victory of her interlocutors accepting she was right, yet the profession moving on regardless.

The Economics of Imperfect Competition is certainly Robinson’s most popular, evergreen, long lasting or sacred work. It is often seen as a radical evaluation of Marshallian analysis. However, the book improvises methods more than breaking away from Alfred Marshall. It undertook the whole method of market analysis, re-fabricating and perfecting it, further constructed a technical apparatus to tackle markets in general, and eliminated some of Marshall’s ambiguities. After Robinson’s re-evaluation it is perfect competition that became a special case of what in general is a monopolistic situation (Pasinetti, 1987).

Robinson became one of the members of a group of young economists known as the ‘Cambridge Circus’, whose members included Richard Kahn, Piero Sraffa, James Meade and Austin Robinson. These economists met regularly to discuss the evolving drafts of Keynes’s future General Theory of Employment, Interest, and Money. Keynes, having been a part-time in Cambridge and part-time in London, teaching more orthodox monetary theory and policies during Robinson’s time as a student at the beginning of 1920s, was now a more interesting figure to her. His ideas and the discussion taking place at the ‘Cambridge Circus’ were a rupture with the economic legacy at the time and a major penetration into the social problems associated with unemployment.

A positive outcome of the Cambridge Circus was Robinson’s Essays in the Theory of Employment (1937a) and Introduction to the Theory of Employment (1937b). Written as guides to follow Keynes’s General Theory, these two works ascertain, that effective demand and how investments determine savings. In the orthodox theory, the rate of interest remunerates one’s sacrifice for saving and, thus, for supplying capital. A clear demarcation or leap from this is the understanding of investment as an independent variable and saving as being determined by investment, which means that “the rate of interest cannot be remunerating anybody’s ‘sacrifice’” (Pasinetti, 1987).

During these years, one witnessed Robinson reverting to her life-long journey to confront the marginalist theory of distribution and re-formulate economic theory. For Pasinetti (1987), she was very cautious in her early years, trying to build a solid analytical foundation. Once sure of this ‘equipment’, she would become gradually fiercer and more impatient with dogmas, “fighting for new unorthodox ideas” (p. 4). Robinson was not satisfied with either economics, orthodoxy or what would become known as Keynesianism (or ‘bastard Keynesianism’ as she renamed its denuded theory later). She never forgave the disaster of having more than a million workers unemployed at the time when learning that it was logically impossible for unemployment to prevail because of Say’s Law. Keynes proved the Say’s Law wrong, but Robinson wanted more.

Her baptism with Marx’s ideas in 1936 through her review of John Strachey’s The Nature of Capitalist Crisis (1935) in 1936 and her friendship with Michal Kalecki2 paved the way to her journey. Approaching Marx with a mere fascination , she wanted to examine “what his economic theory had to teach orthodox economists and Keynesians” (Harcourt and Kerr, 2009, p. 10), while also expecting Marx to “make her economics more ‘real’, to address the inequities of the capitalist world” (Harcourt and Kerr, 2009, p. 34). As a result, she derived a critique of the orthodox theory of the rate of profits and tackled Marx’s insights on the long-run behaviour of capitalist economies. She also concluded that “Marx’s analysis of accumulation and the development of crises lay the foundation for the basis for understanding the history of capitalism” (Robinson, 1980c, p. 297). The importance of time and the large forces of capital were replacing a stabilising equilibrium system as her frame of reference.

If in 1933 Robinson offered an internal critique of Marshallian value theory, by 1942 she relied on Marx’s insights to escape Marshallian orthodoxy. Her personal endeavour from her teenage years to understand the causes of poverty and unemployment were a dichotomy with an order based on equilibrium or the harmony of interests. Marxian economics gave Robinson an avenue to redress the system. The concept of transition from one mode of organising production to other and the understanding of economic life with regard to a conflict between workers and capitalists would complement the discussions in the ‘Cambridge Circus’. Among many criticisms, it was Robinson’s rejection of the labour theory of value (see also Robinson, 1950) which she considered gave her the status of “enemy by the professed Marxists” (Robinson 1978, p. 276).

By 1956, with her The Accumulation of Capital, Robinson embarked a clear mission to construct “a new framework for economic theory” (Pasinetti, 1987). She tried to extricate herself from the limitations of the short run and centred her attention on the problem of capital accumulation, which was for her the principal road in the development of a capitalist economy. She was convinced that orthodoxy economic theory gave insufficient attention to how wealth is accumulated over time, which for her was a very important part of economic analysis. She also asked an uncomfortable question: what is the marginal product of capital? She had tried to find the answer for it only to realise that no economist really knew. Investigating or penetrating fundamental categories, such as of labour supply, technical progress, and natural resources, she criticised the concept of ‘production function’ and re-evaluated it.

These three defining moments in the evolution of her ideas were substantiated by Robinson’s keenness to refute the dogmas and the orthodox ideas in economics (Pasinetti, 1987). As seen in her 1962 Economic Philosophy, Robinson was among the strongest advocates, second perhaps only to Gunnar Myrdal, in rebuking the non-neutrality of economic science and of the necessity of stating explicitly one’s convictions and beliefs. In Economic Philosophy, she challenged detaching ‘science’ from ‘ideology’ ,which was a form of mathematical modelling that had poisoned Keynes and was rapidly doing the same to Harrod’s growth theory, by demonstrating the extent to which metaphysical beliefs still penetrated the so called value-free orthodox structures.

The limitations of the modern orthodox theory of her time are further formulated in her Economic Heresies. Some Old-fashioned Questions in Economic Theory (1971), where the narrowness of the discipline in its scope and relevance is associated to Walras’s excessive influence. For Robinson (1971), the issue of time and uncertainty would never permit the Walrasian model to be relevant to long-run growth in the capitalist economy (p. 27). Robinson also felt it was imperative to reach out to students with an alternative method to facing economic reality, which resulted in a textbook co-authored with John Eatwell in 1973 called An introduction to modern economics.

It is impossible to read Robinson’s critique to the established orthodoxy at her time and not question whether on has done justice to her challenges with respect to incorporating time into our macroeconomic theory. She relentlessly emphasised the need to distinguish ‘logical’ from ‘historical’ time in the economic analysis, challenging the falsehood that we can go forwards and backwards in time and the implication that uncertainty, by definition, would become a regular venture of risk

Finally, rediscovering Robinson’s endeavours would not be complete if her exceptional analytical ability is overlooked. She had original ideas projecting a strong social message from her writings. Her logical set of arguments combined with her apparatus aimed at practical actions ranging from unemployment before the war and underdevelopment to the struggle of ex-colonial nations after the war, with a special attention paid to Asia and initial enthusiasm for Communist China (Pasinetti, 1987).

Joan Robinson championed the spirit of the nation during the Cultural Revolution. Robinson also made several trips to China, reporting her observations and analyses in China: An Economic Perspective (1958), The Cultural Revolution in China (1969), and Economic Management in China (1975; 3rd edn, 1976), in which she praised the Cultural Revolution. Most illustratively she projected the essence of Chinese socialism, touching issues at the very grassroots to logically convey how workers power scaled an untouched height. She left no stone unturned in whitewashing the lies of the bourgeois media projecting Red China as a regressive society.

Joan Robinson’s writings have to be re-modelled or methods re-invented in accordance to the modern times, when globalisation and imperialism have engulfed every corner of the globe on a scale unparalleled and the working class has been alienated as never before.

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Vol 56, No. 7, Aug 13 - 19, 2023