Beyond Keynes, Volume One
Edited by Shelia C. Dow and John Hillard
Chapter 5: Some elements of a Post Keynesian labour economics
John E. King1 I INTRODUCTION When, some years ago, I tried (unsuccessfully) to articulate a Post Keynesian labour economics, I attributed my failure to the neglect of this branch of economics by Post Keynesian theorists, who had for the most part left criticism of neoclassical labour theory to radical political economists and institutionalists (King, 1990: 2–4, 236; cf. Sawyer, in King, 1995: 147–8). This is certainly an important part of the story, but I should have realized then (what is obvious now) that there are two further serious diﬃculties. The ﬁrst is posed by the existence of a major division within the Post Keynesian ranks on the question of marginal productivity. This is associated with, but by no means identical to, the cleavage between ‘Fundamentalist Keynesians’ and Kaleckians, which in this context reduces to acceptance or rejection of Marshallian ‘microfoundations’.2 The correspondence is not complete, as, while many Kaleckians will have no truck with marginalism, others are prepared to allow the marginal product of labour some limited role in wage and employment determination in the short period (Rothschild, 1954; Riach, in King, 1995: 117–18; Riach, 1995). The consensus on basic principles which characterizes neoclassical labour economics is simply lacking among Post Keynesians. If anything, the second problem is even more serious. The raw material of labour economics is predominantly ‘micro’, while Post Keynesian theory is essentially macroeconomic. There are whole areas of applied microeconomics (the environment; transport; welfare economics more generally) about which Post Keynesians have...
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