ABSTRACT
Although Geoff Harcourt once thought that Alfred Eichner “was not an absolutely top-line economist,” adding that “he did a lot of harm to Post Keynesianism” (Harcourt in King 1995, 85), I tend to think instead that Alfred Eichner’s contribution to post-Keynesian economics in general, and to post-Keynesian monetary theory in particular, was ahead of its time and of great relevance today. Now, this opinion runs somewhat against the standard assessment of Eichner’s contribution to monetary theory, which is usually perceived as being very minor, perhaps even nonexistent, Eichner being viewed somehow as the man of one idea, that of markup pricing being dependent on the amount of internal funds necessary to finance capital accumulation. The following quote partly illustrates this standard assessment:
Money didn’t have a crucial role to play, in the way that I think Minsky and others would see money and the financial system as having important implications for the way that the economy operated. . . . I think this is one of the unresolved issues in Post Keynesian economics. The paper that Paul Davidson wrote in the Festschrift for Alfred Eichner, for example, points out that Alfred had not incorporated any essential role for money in his analysis. Most, or maybe all, of Eichner’s analysis doesn’t really come to grips with the nature of money and the financial system. It essentially assumes that investment can be financed, and doesn’t analyse the financial system at all. So I think there is a continuing debate inside Post Keynesian economics on this, and a degree of tension among different Post Keynesian economists over the role of money. Much work within Post Keynesian theory, ranging from Amitava Dutt and Joseph Steindl to Kalecki and Eichner, whilst
making some mention of money, does not really incorporate money in any essential way. (Sawyer in King 1995, 145)
Malcolm Sawyer’s judgment would rely, at least partly, on Davidson’s (1992) reading of Eichner’s unfinished 1987 textbook, a paper that did appear in the Eichner Festschrift edited by William Milberg (1992). But Davidson’s own opinion seems to be based on an overly quick read of Eichner’s book. All but one of the references made to the book are taken from the first twelve pages of the fifty-eight-page Chapter 12, titled “Money and Credit.” In addition, while praising Eichner for his use of the flow of funds approach in that chapter, Davidson seems to be unaware that Eichner presents financial flows in great detail as early as Chapter 2, from pages 79 to 108; instead, Davidson claims that “monetary aspects of his book do not appear until chapter 12-800 pages into the volume” (Davidson 1992, 187-189).
