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Chapter 6: French Circuit Theory
Claude Gnos Introduction The concept of the circuit was ﬁrst used in economics by the Physiocrats of eighteenthcentury France. They viewed production as a cycle beginning with advances, that is, capital expenditure, and ending when the goods that had been produced were sold. To that extent, the late twentieth-century revival of the circuit concept, notably by Bernard Schmitt (1960; 1966; 1984), Jacques Le Bourva (1962), Alain Barrère (1979; 1990a; 1990b) and Alain Parguez (1975), was a salute to a French tradition. This is not the whole story, though. Circuitist thinking, although usually unsung, has underpinned many approaches to economics from Marx to Keynes by way of Wicksell,1 Schumpeter, Kalecki and J. Robinson.2 Indeed, today’s French circuit school owes much to Keynes, to whom Schmitt, Barrère and Parguez all referred extensively. And it is Keynes’s heterodoxy, as opposed to the conventional neoclassical view of Keynes’s economics, that was their source of inspiration. Hence the aﬃnities of French circuitists with postKeynesians (for a detailed review of common ground and diﬀerences, see Deleplace and Nell, 1996; Arena, 1996; Rochon, 1999a). Circuit theory also counts an Italian branch which emerged in the 1980s on Graziani’s (1989; 2003) initiative and which explicitly focuses on Keynes’s monetary theory of production (cf. Fontana and Realfonzo, 2005). French and Italian circuitist approaches have also inspired post-Keynesians outside Europe, especially in Canada (Lavoie, 1984; Rochon, 1999a; 1999b and Seccareccia, 1996). This aﬃnity between circuit theory and Keynes’s heterodoxy and now postKeynesian theory will...
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