Joan Robinson at Stanford, May 1974.
At what point did classical economics become neoclassical economics?To your knowledge, was there any major classical idea that neoclassicals rejected?A question that confounds me.
Thanks for Joan Robison upload,i always liked here.
Prateek,The 'marginal revolution' was at the end of the 19th century. Neoclassicals didn't explicitly reject classical economics - in fact, they purported to have built upon it.The main difference between classical and neoclassical is the lumping of capital and land together, and the lack of a focus on rent. And the fact that neoclassical economics was actively funded by rich people to maintain their wealth.
"To your knowledge, was there any major classical idea that neoclassicals rejected?"Of course - the labour theory of value. Isn't this obvious??Also, neoclassical eocnomics was much more optimistic than Classical economics (at least in form it reached under Ricardo). There is a reason why Classical Polical Economy was called the "Dismal science": Ricardo assumed that workers were doomed to a subsistence wage and that there was inevitable class struggle between landowners and capitalists.Marxism was almost a natural development from Classical economics - Marx shifted the "class struggle" idea to one between capitalists and workers.
"and the lack of a focus on rent. And the fact that neoclassical economics was actively funded by rich people to maintain their wealth."Both facts off course, are well related!
On a purely factual basis, I really don't know how "rich" the neoclassical founders like Jevons, Walras, Pareto, and Menger were.In fact, I think Alfred Marshall - the founder of the British neoclassical tradition (called Marshallian economics) - came from a poor family.I don't think it makes sense to just dismiss them as "rich" people who only wrote self-serving propaganda to protect themselves and their class. I think they sincerely believed their flawed theories - they weren't just dishonest apologists for the rich.
LK,I do not believe in some sort of New World Order but it has become undeniable that many economics movements have been funded by the rich, in particular the neoclassical school and Austrian schools, as well as the general libertarian movement (the MP society was funded by Swiss banks & insurance companies).I'm not saying many individual economists are corrupt, but the ones who sing the virtues of neoclassical economics - which just so happens to coincide with the interests of the rich - are given the microphone.http://www.masongaffney.org/publications/K1Neo-classical_Stratagem.CV.pdfAs a side note I've always wondered why Keynes never (?) mentions LVT or George, since he wanted the euthanasia of the rentier.
(Something here reeks of pseudo-dialectics talk. It's not about actual arguments, but always about class interests? Let's hope we don't reject James Hutton's contribution to geology because he came from an extremely wealthy family.)---------------Cahal, it still depends which subset of the Austrian School you refer.von Mises was funded by the Rockefellers, and he does thank the Rockefeller Foundation for helping publish his book Omnipotent Government. It may have helped that his fellow von Hayek was David Rockefeller's professor at LSE.But the other strains and traditions of the Austrian School? The one that started from Menger but didn't necessarilly continue toward von Mises? Or the current Lachmann wing? I am not sure.
Re: "classical" versus "neoclassical."LK puts it a bit broadly about the labor theory of value. I'd say, rather, that the classical economists held "objective" theories of value, while the neoclassicals hold a "subjective" theory of value. (While most of the big classicals start out saying that labor is the source and measure of value, they generally go on to present products' value as composed of their constituent costs including capital maintenance and non-differential rent -- this is true even of Marx). Cahal is correct that classical economics also differs heavily in its emphasis on the theory of rent, and its adherence to a three-factor model, while neoclassicals use the old rent theory as a generalized theory of profit in a two-factor economy. The one quality that the two schools broadly share is that both tend to recommend a policy of laissez-faire. I believe this is the only significant continuity between Smith and Ricardo and, say, Pareto and Edgeworth.
Cahal, and Keynesian economics is not funded by some rich? So i am guessing you dont like INET, since it was founded by George Soros or other rich people that fund INET (there are plenty)...