ABSTRACT
Post Keynesian economics did not emerge in a vacuum; rather there existed organizations and social networks, such as URPE, Association for Evolutionary Economics (AFEE), and the Association of Social Economics (ASE) that helped its birth and development. Although each of the associations and their journals represented a different orientation towards economic theory and policy, they had more in common with each other than they had with neoclassical economics. In particular, their critiques of neoclassical economic theory were broadly similar and their topics for economic inquiry were clearly overlapping. Moreover, while their particular methodologies, theories, and style were different, they were in many ways compatible. Finally, many economists in each association were open to dialogue and social interaction with other heterodox economists. These three factors together meant that an open and friendly environment existed in which Post Keynesian economics could develop. It also meant that by the late 1980s many heterodox economists borrowed inspiration and theory freely from all four approaches-a point that will be further discussed below and in Chapter 10. Apart from URPE, AFEE, and ASE, there were also five individuals-Paul Davidson, Alfred Eichner, Jan Kregel, Edward Nell, and Sidney Weintraub-who were the key players that brought Post Keynesian economics to life in America.1
Eichner began thinking of himself as a Post Keynesian as early as April 1969, just two months after he had started correspondence with Joan Robinson. This identification grew over the next two years along with his mastery of and confidence in the emerging Post Keynesian paradigm as a result of his continual correspondence and debate with Robinson. By April 1971 Eichner began wondering whether the time was ripe for a Post Keynesian revolution in the United States. Starting in 1958, Sidney Weintraub began discarding many of the accou-
trements which made up neoclassical economics. In their places he substituted his aggregate supply and demand analysis, mark-up pricing, and endogenous money supply. By the mid-1960s he saw himself as unorthodox; and by 1972 he realized his view of economic theory was quite different from that entertained by neoclassical economists and his view of good economic theory was not incompatible with the theories and arguments coming out of
Cambridge, England. As an unreconstructed Keynesian, he was open to a Post Keynesian revolution. Paul Davidson took his graduate education at the University of Pennsylvania where he came under the influence of Weintraub just as the latter began breaking with neoclassical macroeconomics and going back to Keynes. Thus, he also became interested in Keynes’s approach to macroeconomics and money. In the early 1960s Davidson began work on Keynes’s finance motive through which he obtained, in his view, an insight of the true role of money in the Keynesian revolution. This eventually led to an article on the topic published in 1965 that, in turn, boosted his confidence to integrate monetary analysis into Keynes’s general theory. His first attempt along this line was an article on money and growth in 1968 in which he presented his alternative approach. The response Davidson expected from his neoclassical brethren never materialized; thus he decided to write a book that would systematically present his views on money and employment so that they could not be overlooked. During this same period, Davidson began corresponding with Robinson, first over the topic of the demand for finance and then expanding to include expectations, uncertainty, equilibrium, and capital accumulation. The frank discussion prompted him to take study leave in Cambridge in 1970-71 where he intended to write his book on money and employment. The year was an intense learning experience as Davidson argued and discussed with Robinson and other Cambridge economists virtually every point in the book he was writing. By the end of the year, he had completed the manuscript which was published in 1972 as Money and the Real World; the book marked the beginning of Post Keynesian monetary theory. The year at Cambridge also convinced Davidson that whatever differences he had with Robinson and the economic theorizing at Cambridge, his work was much more compatible with that than what passed as neoclassical macroeconomics. Edward Nell was introduced to the capital controversy and the Cambridge
criticisms of neoclassical economics while at Oxford in the late 1950s. This background combined with his fundamental interest in economic growth and social change propelled him to both examine the inadequacy of neoclassical economic theory while at the same time fashion a replacement theory synthesized from Marx, Robinson, and other heterodox economists. The first fruits of this life-long project came in 1967 with the publication of “Theories of Growth and Theories of Value.” In 1969 he became a professor at New School for Social Research (now The New School) where he promptly initiated steps to revitalize the economics department by making it a center for heterodox economic theorizing. Jan Kregel took his first two years of graduate education at Rutgers University (1966-68) where he came under the influence of Davidson. Wanting to do his Ph.D. dissertation on the developments in economic theory at Cambridge, he went to England for the 1968-69 academic year. Armed with an introduction from Davidson, Kregel took tutorials from Robinson as well as engaged in extensive discussion with other Cambridge economists. The outcome of his year in Cambridge was the
first draft of his dissertation which was revised and accepted by Rutgers, at the insistence of both Davidson and Robinson, for his Ph.D. in 1970; it was published the following year as Rate if Profit, Distribution and Growth: two views. However, Kregel was interested in more than comparing and contrasting Cambridge economics with neoclassical economics; he wanted to reconstruct economic theory, combining Keynes’s short-period theory of effective demand with Kalecki’s sectorial modeling of the economy and the Cambridge extensions of the theory to the long-period. Thus he was open to a Post Keynesian revolution and his contribution to it was The Reconstruction of Political Economy: an introduction to Post-Keynesian economics (1973), the first textbook on Post Keynesian economic theory (Lee 2000a; King 2002, 2005b; Davidson 1965, 1968, 1972b; Davidson in Arestis and Sawyer 2000; Turner 1989; Nell in Arestis and Sawyer 2000; Nell 1967b; Colander 2001; Kregel 1971, 1973).
