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A Revolution in Economic TheoryEpilogue

A Revolution in Economic Theory: Epilogue [Had Samuelson not played tennis on the morning that Jacob Viner and Joseph Schumpeter lectured on Irving Fisher’s critique of Böhm-Bawerk’s theory of interest (see Samuelson 2000), he would have not made the mistake of asking his student David Levhari (1965) to disprove Sraffa’s proposition regarding the ‘re-switching’ of techniques, and the future of Sraffian economics would have been very different. This counterfactual speculation notwithstanding, the fact remains that Samuelson did set his student the task to prove Sraffa wrong and the history is now well-known. Samuelson and Levhari had to accept their mistake and acknowledge the robustness of Sraffa’s ‘re-switching’ proposition (see ‘Symposium’ in QJE 1966). The long and at times acrimonious debate over this proposition between the neoclassicists and the Sraffians is most ably documented in Harcourt (1969, 1972) and Bliss et al. (2005) and there is no need to rehearse it here. As I have mentioned in the Preface, although this success was hailed as the crowning glory of Sraffa’s great work, it, however, came at a very high price. The orthodoxy interpreted Sraffa’s re-switching proposition as his main contribution to economic theory; they accepted its truthfulness and argued that the modern general equilibrium orthodox economics need not aggregate capital independently of prices. Hence Sraffa’s critique of the orthodox theory was not fatal but rather ‘minor’ and therefore, the book on Sraffa could be closed.] http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png

A Revolution in Economic TheoryEpilogue

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Publisher
Springer International Publishing
Copyright
© The Editor(s) (if applicable) and The Author(s) 2016
ISBN
978-3-319-30615-5
Pages
227 –230
DOI
10.1007/978-3-319-30616-2_8
Publisher site
See Chapter on Publisher Site

Abstract

[Had Samuelson not played tennis on the morning that Jacob Viner and Joseph Schumpeter lectured on Irving Fisher’s critique of Böhm-Bawerk’s theory of interest (see Samuelson 2000), he would have not made the mistake of asking his student David Levhari (1965) to disprove Sraffa’s proposition regarding the ‘re-switching’ of techniques, and the future of Sraffian economics would have been very different. This counterfactual speculation notwithstanding, the fact remains that Samuelson did set his student the task to prove Sraffa wrong and the history is now well-known. Samuelson and Levhari had to accept their mistake and acknowledge the robustness of Sraffa’s ‘re-switching’ proposition (see ‘Symposium’ in QJE 1966). The long and at times acrimonious debate over this proposition between the neoclassicists and the Sraffians is most ably documented in Harcourt (1969, 1972) and Bliss et al. (2005) and there is no need to rehearse it here. As I have mentioned in the Preface, although this success was hailed as the crowning glory of Sraffa’s great work, it, however, came at a very high price. The orthodoxy interpreted Sraffa’s re-switching proposition as his main contribution to economic theory; they accepted its truthfulness and argued that the modern general equilibrium orthodox economics need not aggregate capital independently of prices. Hence Sraffa’s critique of the orthodox theory was not fatal but rather ‘minor’ and therefore, the book on Sraffa could be closed.]

Published: Aug 19, 2016

Keywords: Sraffian Economics; Levhari; Orthodox Theory; Fixed Input Coefficients; Falsifiable Entailment

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