ABSTRACT
Nina Shapiro argues that Post-Keynesians significantly diverge from Neoclassical economists in both content and method. Although the object of Neoclassical economics is the allocation of scarce goods reduced to the expression of individual's "rational economic behavior," Shapiro claims that Post-Keynesians' understanding of the capitalist system represents a sharp break from the thinking that begins with Keynes's treatment of investment.
Keynes believed that investment is determined by expected profitability rather than the marginal product of capital, making it a completely self-sustaining process. Likewise, savings (especially in Kalecki's model) is a function of profitability rather than individual's decisions to consume now or later. Once the motives and independence of investment are established, the object of Post-Keynesian economics becomes understanding the expansion of investment or the process of accumulation.
The distribution of income is a focal point in Post-Keynesian analysis because it determines the relative shares of wages and profits and hence money available for investment and growth. Prices are important not in their role as the allocator of scarce resources but because they are the way in which firms ensure the availability of money required for the expansion of production. Shapiro argues that the task at hand for Post-Keynesians is to model the process of accumulation in capitalist economies in the face of uncertainty.
