ABSTRACT
Introduction I met Professor Frederic S. Lee at the University of Missouri-Kansas City (UMKC), while attending the Seventh Post Keynesian Summer School as a PhD candidate in June 2002. After dinners, he would come to the dormitory’s lobby where I and other students were staying and chat with us about Post Keynesian micro-and macro-economic issues for hours. He was so passionate and still highly energetic after long days of lectures that he would scream occasionally to keep us awake! He would lament that many Post Keynesian economists privilege macroeconomic issues such as monetary, fiscal, and trade policies over microeconomic themes of business enterprise, competition, and market governance. For him, studying macroeconomic issues is not fully complete without understanding their microeconomic roots. Professor Lee situates macro and micro issues within a broader theoretical framework of what he calls the theory of the social provisioning process. This is the approach he was about to develop after more than 30 years of researching market prices and business competition. His goal was to put forward a scheme that would make possible a relational way of studying microeconomic topics such as markets, instability, business competition, and market governance with macroeconomic themes like fiscal and monetary policy. He completed the groundwork for this task in his recent publications over the past several years. However, his untimely death prevented him from putting his scattered ideas together and presenting them as a unified framework. This chapter primarily focuses on Lee’s writings to accomplish this task of describing his theory of the social provisioning process and locating business competition within it as a way of creating a springboard that future studies may use different components of his theory to understand the real world. The underlying hypothesis in this chapter is that not only does Lee provide a vision of the economy as a whole with his theory of the social provisioning process within the Post Keynesian economic tradition, but also he characterizes business competition as a dynamic process of rivalry that carries the elements of instability and stability simultaneously. The innovative aspect of Lee’s contribution is in how
he explains business competition and resulting market (in)stability and how they are connected to the social provisioning process in an empirically and historically grounded manner. This chapter is structured as follows. The next section reviews the literature on business competition in Post Keynesian economics. The third section analyzes Lee’s theory of the social provisioning process, followed by his contribution to business competition, market instability, and how business enterprises work together to manage competition in the fourth section. The fifth section discusses Lee’s originality in the Post Keynesian tradition before summarizing the findings as a way of conclusion.
