The Nature of Macroeconomics

The Nature of Macroeconomics

Instability and Change in the Capitalist System

Athol Fitzgibbons

This book addresses the long absence of a satisfactory theory of macroeconomics. Keynesian theory is not consistent with rational self-interest, but neo-classical economics is unable to explain economic volatility and the trade cycle. Athol Fitzgibbons critiques the leading macroeconomic theories, which he believes are unduly mechanistic because they are incompatible with non-quantitative knowledge.

Keynes and Recantation

Athol Fitzgibbons

Subjects: economics and finance, post-keynesian economics

Extract

Appendix on Keynes’s Recantation My argument has been that Keynesian economics failed because it was formulated in mechanical terms and without a theory of knowledge. I have also argued that Keynes’s Treatise on Probability did formulate a theory of knowledge, although this theory was devalued or misunderstood. I have also rejected the proposition that Keynes recanted his Treatise on Probability; in the text I have responded to a composite recantation story, and now I will comment on the variations around its theme. 1. Although it is generally agreed that Keynes did originally propose a doctrine of practical reason, that term is understood in different ways. Bradley Bateman and John Davis seem to agree that Keynes wanted to develop a logic of practical reason in the traditional sense of that term, but Robert Skidelsky and Rod O’Donnell present ‘practical reason’ as a version of utility maximization. 2. It is generally accepted that Keynes’s system was refuted by a contemporary Cambridge philosopher, although the more telling refutation issued from Bertrand Russell (Davis), from both Frank Ramsey and Ludwig Wittgenstein (Skidelsky), or from Ramsey alone (Bateman and O’Donnell). Since there were close persona1 and doctrinal relationships between these three philosophers, the differences seem secondary. However Anna Carabelli deviates from the recantation story by arguing that Keynes anticipated Wittgenstein’s position. 147 148 Appendix on Keynes’s Recantation 3. It is widely agreed that Keynes did not explicitly recant, although Bateman argues that he did. 4. There are disagreements about the extent to which Keynes changed...

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