The Asimakopulos View of Keynes’s General Theory

Tom Asimakopulos was a great Kaleckian scholar. His knowledge of the nuances and innuendoes of Kalecki’s approach to macroeconomics was impressive and usually definitive. In his last book, Keynes’s General Theory and Accumulation (1991), completed only months before his untimely and tragic death, Asimakopulos records his lectures to final-year honours economics students and to graduate students’ (p. xv). The first six chapters of this volume present Asimakopulos’s interpretation of Keynes’s General Theory. For this reader, these pages displayed a masterful Kaleckian interpretation of what should be the theory of employment equilibrium analysis. Chapters 7 and 8 discuss the theories of accumulation developed by Roy Harrod and Joan Robinson. Chapter 9 provides a 4½ page summary of the conclusions of this work. I shall limit my discussion to the short-period analysis of the first six chapters. In these chapters Asimakopulos makes the following points: 1.Keynes’s General Theory was a ‘significant departure from his earlier theoretical writings’ (p. 11);2.The concept of money is linked with the ubiquitous uncertainty of future economic events (p. 8);3.Involuntary unemployment can be discussed via a five-equation model where the net marginal product of labour curve is the ‘demand curve for labour’ (pp. 32–5) and Keynes’ aggregate supply function can be derived from these relations (pp. 53–7);4.Keynes’s aggregate supply and demand analysis is ‘less soundly based than Kalecki’s’ (p. 79) and Keynes relied on Richard Kahn to correct the many analytical errors committed by Keynes (p. 12);5.Keynes’s analysis of investment is found wanting for it ‘involves more monetary and financial elements than are found in the formal model’ (p. 79);6.Keynes’s formal model ‘is displayed’ in a set of equations that depict a situation of short-period equilibrium’ (p. 101). This equation-set combines the labour market equations with a traditional consumption function, an investment function, a demand for money function and an exogenous money supply function (p. 102). This ‘formal model’ bears an amazing resemblance to the neoclassical synthesis models of Hicks and Modigliani. What is so surprising in all this is that Asimakopulos did not explicitly indicate that the formalization that he presented is ‘Bastard Keynesianism’ to use Joan Robinson’s splendiferous phrase, rather than the economics of Keynes.7.Tn working out his [Keynes’s] model, the money wage rate was taken as exogenous’ (p. 29). Keynes had perceptive observations regarding the effects of money wage rate changes but these ‘observations were not part of his formal model … There is no suitable general functional form relating changes in money-wage rates to changes in the level of employment’ (p. 30).8.Keynes failed to understand the multiplier as a process over time. This leads to ‘inconsistencies’ in Keynes’s handling of the saving-investment relationship and the role of finance (p. 113).