Joan Robinson’s Economics: A Centennial Celebration

Published by EH.NET (November 2006)

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Bill Gibson, editor, Joan Robinson’s Economics: A Centennial Celebration. Cheltenham, UK: Edward Elgar, 2005. 395 pp. $130.50 (hardcover), ISBN: 1-84376-932-8.

Reviewed for EH.Net by Michael S. Lawlor, Department of Economics, Wake Forest University.

This seems an appropriate time to reassess the work of Joan Robinson and examine just what it was that she was up to and why it is important for economists to recognize her contributions. Younger scholars most likely have not read her and know little of her importance (except perhaps as the author of the 1933 book The Economics of Imperfect Competition, later much discounted by her.) Nevertheless, Robinson’s work was for a long time a staple of some of the profession’s most important theoretical debates, especially during the so called “capital controversies” of the 1960s. Along with other giants of the post-WWII era, like Paul Samuelson and Robert Solow, she became a symbol for many economists of a particular point of view (not always viewed favorably by the mainstream of American economists). The argument she symbolized was the Cambridge (U. K.) critique of the use of an aggregate concept of “capital” and the attendant “well behaved” properties of production functions (which economists still use on a regular basis). Moreover, she traversed in her own career an arc describing the development of much of modern economics, including many familiar ideas that we value enough to include in our textbooks. By this I refer to the following facts: that she was early on a major contributor to the reformulation of the Marshallian theory of the firm that is often covered in the monopolistic competition sections of microeconomics texts; that she actively participated in the advent and rise, as well as witnessed the eventual decline, of the economics of Keynes and the associated “Keynesianism” which is still taught in modern macroeconomics texts; in addition to this, she played a pivotal role in the re-thinking of capital and growth theory that occupied many of the profession’s great theoretical lights in the 1960s and 1970s, although this is much less discussed today. That record alone — and there is more to her career than even such a list suggests — is enough to warrant a reassessment. In fact, is it not too much to ask why there is yet no full-scale intellectual biography of her? The volume under review, edited by Bill Gibson, and originating at a conference in 2003 at the University of Vermont celebrating the centenary of her birth, serves as a valuable aid to such a reassessment.

First, a truth in reviewing note: Both Robinson’s work, and the contributions to this volume, range over such a vast expanse that no review can adequately cover the whole field. So, for example, I will pass over without comment her contributions to international trade theory, to Marxist economics, to the notion of class conflict in the distribution of income, and to monetary and financial economics, as well as her (often controversial) views on underdeveloped economies. There are many able discussions of these topics in the text under review, to which the interested reader is enthusiastically directed.

One more short comment is in order on an aspect of the volume that strikes this historian of economics as new, daring and so noteworthy. Prue Kerr’s chapter, titled “Knowledge without Pain,” presents a picture of Robinson, not as the arch insider, the consummate player of the economic theory game that she was, but as the popularizer of economic ideas to a wider audience than to economists alone. In doing so, Kerr compares her Economic Philosophy (1964), Economics: An Awkward Corner (1966) and Freedom and Necessity (1970) to the popular economic works of Harriet Martineau and Jane Marcet in the nineteenth century. One of Kerr’s conclusions is that Robinson did not similarly try to “dumb down” economic discussion so that her readers could flatter themselves that they were conversant with difficult topics. Thus she opted, in Kerr’s words, for “knowledge with pain,” as her subject required. More of this type of analysis of the content and quality of popular economics and of economic journalism would be welcome, and following from Kerr’s example, seems ripe for exploitation by historians. (Vincent Barnett’s recent review on this list of Economists in Parliament in the Liberal Age (1848-1920), edited by Massimo Augello and Marco Guidi, makes this point more broadly in the context of a large study of the political expression of economic ideas across countries and historical time periods. See http://eh.net/bookreviews/library/1121.shtml.)

Joan Robinson’s biography and the role in it of her circle of teachers, colleagues and students at Cambridge, are interestingly described by the contributions of Bill Gibson, G. C. Harcourt and Christina Marcuzzo. One aspect of particular significance to Robinson’s thought was the lasting influence of her early education in economics, which was dominated by the teachings of Alfred Marshall. But it is important to note that when she came to Cambridge in the 1920s, Marshall was no longer a sacrosanct figure. Though still a towering influence on Cambridge, Marshall’s economics was thought to be lacking in crucial ways that undermined its effectiveness in dealing with then modern developments such as the credit cycle, the public corporation, and unemployment. Consequently much intellectual activity in the 1920s and 1930s by such figures as A. C. Pigou and Dennis Robertson went into updating Marshallian economics to meet these challenges.

In fact, almost from the beginning of her education in the subject, Robinson mainly learned Marshall’s economics in order to understand the criticisms of it that were then being offered. Two of these in particular were to be of lasting influence on her. The critique of the Marshallian theory of the firm that she got directly from the lectures of the enigmatic, but piercingly brilliant, Piero Sraffa were one influence (as to a lesser extent was her discussion of these issues with Richard Kahn). The other, eventually more long lasting for Robinson’s work, was the more outwardly transparent and worldly, but equally brilliant, ideas of John Maynard Keynes. It is not explicitly stated by Harcourt or Marcuzzo, but it can be inferred from their excellent narratives, that Robinson’s theoretical soul could be seen as forming an intellectual battleground between the alternative visions of Sraffa’s and Keynes’s critiques of Marshall, and through those critiques much of then received economic theory.

From Sraffa, Robinson took her life-long penchant for clever questioning of fundamental and unexamined assumptions of analysis. In the early work of both, this revolved around what conception of the firm is most appropriate to capture the facts of modern competition and is able to be expressed in the form of a logically watertight system. Later, after the publication of Sraffa’s insightful introduction to Ricardo’s Works (Sraffa, 1951) and the related, and much delayed, release of his alternative (to any resort to an aggregated capital notion) picture of the intricacies of the relationship between output prices, production by (disaggregated) capital goods and the returns to “capital” and labor (Sraffa, 1960), Robinson could at last see Sraffa’s complete vision of the production process. I think one way to interpret the evidence presented in this volume (particularly in Marcuzzo’s contribution) is that this marked Robinson’s parting of the ways with Sraffa. I mean that although she had accepted, and arguably did much to publicly advance, Sraffa’s long-held view of the circularity of the definition of capital that economists (then and now) often use in positing an inverse relationship between “the quantity of capital” and “the return to capital,” she nevertheless came to see Sraffa’s positive alternative vision of the production process as a sterile starting point for the kinds of questions she really wanted to answer. These were especially how to model growth and accumulation in a competitive private system that was moving through time.

In was in this endeavor that she might be said to have chosen the Keynesian-Marshallian path to doing economics over the Sraffian-Classical one. A number of things that contributed to this (maybe unconscious) choice on her part are highlighted in the contributions noted above, but also, more technically, by the contributions of Donald Harris, Amitava Dutt and Peter Skott. Only a bare sketch can be offered here, but the interested reader is urged to consult these excellent discussions.

As noted above, Robinson cut her teeth on a project that set out to make the Marshallian theory of the firm capable of explaining modern conditions of competition, particularly large-scale production units (see especially Robinson 1933 and the very revealing introduction to that work she added in 1969). She was then almost immediately cast into the role of technical advisor and general sounding board (with others) for Keynes, as a member of the famous “Cambridge Circus” — the small group of young faculty and graduate students that searched Keynes’s Treatise on Money for basic flaws in its argument. From here she went on to become one of an even smaller group of trusted critics that vetted the drafts of the General Theory (and here Robinson appears to have risen to prominence in Keynes’s eyes, according to the evidence in his Collected Works). This much is well known to historians of economics, but what is not so well appreciated, and that these authors make us more aware of, is that Robinson bore the mark of this baptism in doing economic theory in a Marshallian-Keynesian mode for all of her later life.

What exactly is a Marshallian-Keynesian is more than we can document here (see Lawlor, 2006), but it is enough to say two things. One is that however far Robinson rode the Keynesian horse into new fields — and her quite ambitious goal in this regard was to “generalize” the General Theory to a dynamic story of growth — she would not do so by abstracting from the fact emphasized by Keynes, that modern economies are sometimes prone to settle into states of inadequate aggregate demand to sufficiently employ their labor forces. Second, Robinson, like Keynes, continued to accept Marshall’s method of theorizing, while rejecting in many different ways the Victorian constructs of the Marshallian economic system. Thus her frequent comments on the good things to be found in Marshall, especially when compared to what she saw as the more abstract and unreal postwar tendency to elevate Walrasian theorizing to the apogee of economic theory (see Robinson, 1962a).

One thing she particularly saw as useful in Marshall was his awareness of the difficulty of treating time by equilibrium constructs. Thus, rather than the highly artificial dynamic equilibria of modern theories of growth (of any stripe), she wanted dynamic economics to be “open” to uncertain expectations, technological change, habits, and the possible irreversibility that came with the “choice of technique.” In other words, she insisted that a theory of economic growth should be alive to the kinds of issues that, economic history teaches, have been real aspects of capitalist economies of the past, making her work particularly relevant to this list’s readers. She did not want to construct models that would reach the same “equilibrium” from radically different starting points, but ones that depended crucially on where a system began to determine part of where it ends up. In short, she wished for a dynamic economics in which a particular set of institutions and a particular history ought to be given its due as a factor that could influence the time path of an economy.

But as Donald Harris particularly emphasizes, this is no easy task. In fact one could say that her long struggle with a variety of complex approaches to such questions in the theory of economic growth (her most mature statements on this topic are to be found in Robinson, 1956 and 1962b) ended in her rejecting “equilibrium” altogether as a way to capture the manifold influences of “history” (Robinson, 1985). But perhaps this nihilistic attitude, reached in old age, is not so important to the modern reader as is the fearlessness with which she faced the many obvious and not so obvious faults of much of economic theory, and the suggestions she made for making it better.

References:

M. S. Lawlor, 2006. The Economics of Keynes in Historical Context: An Intellectual History of the General Theory. London: Palgrave Macmillan.

J. V. Robinson, 1933. The Economics of Imperfect Competition. London: Macmillan. Second edition with a new preface, 1969.

J. V. Robinson, 1956. The Accumulation of Capital. London: Macmillan.

J. V. Robinson, 1962a. “The General Theory after 25 Years,” a review of H. G. Johnson, Money, Trade and Economic Growth, in the Economic Journal 71. Reprinted in Collected Papers of Joan Robinson, Oxford: Basil Blackwell, pp. 100-02.

J. V. Robinson, 1962b. Essays in the Theory of Economic Growth. London: Macmillan.

J. V. Robinson, 1964. Economic Philosophy. Harmondsworth, Middlesex: Penguin Books.

J. V. Robinson, 1966. Economics: An Awkward Corner. London: George Allen and Unwin.

J. V. Robinson, 1970. Freedom and Necessity: An Introduction to the Study of Society. London: George Allen and Unwin.

J.V. Robinson, 1985. “The Theory of Normal Prices and the Reconstruction of Economic Theory,” in G. Feiwel, editor, The Theory of Normal Prices and the Reconstruction of Economic Theory.

P. Sraffa, 1951. “Introduction to D. Ricardo, Principles of Political Economy and Taxation,” in P. Sraffa and M. Dobb, editors, Works and Correspondence of David Ricardo, Volume I. Cambridge: Cambridge University Press.

P. Sraffa, 1960. Production of Commodities by Means of Commodities: Prelude to a Critique of Economic Theory. Cambridge: Cambridge University Press.

Michael S. Lawlor is the author of The Economics of Keynes in Historical Context: An Intellectual History of the General Theory. London: Palgrave Macmillan (2006).