He combined neo-Ricardian and Marxist ideas with Keynesian aggregate demand and he thought marginalist neoclassical economics was incoherent, for reasons related to the Cambridge capital debates. Robert Vienneau offers one summary of his work. Matías Vernengo writes:
As early as 1961, while spending an academic year at MIT, he suggested during a presentation by Paul Samuelson that his results depended on the assumption that all sectors use the same capital-labor ratio. The final results of his critique were presented in Garegnani’s paper “Heterogeneous Capital, the Production Function and the Theory of Distribution.” His paper shows conclusively that the marginalist theory of value and distribution based on an aggregate production function is untenable. This of course builds on Sraffa’s work in the Production of Commodities (PC). By 1966, in the famous Quarterly Journal of Economics (QJE) Symposium, Samuelson had admitted that the neoclassical parable was not defensible.
Here are some of his articles on scholar.google.com. He always struck me as a very intelligent writer and capable of a good bracing critique, even though I don’t think his proposed alternatives have gone anywhere. Every profession needs smart and articulate dissenters and I am glad that we have had Garegnani.
For the pointer I thank Juan Carlos Esguerra.
Thank you for posting this.
“….even though I don’t think his proposed alternatives have gone anywhere”
is that because some inherent weakness or flaw in garegnani’s ideas? or is it because the profession largely chose to ignore them?
The former.
wouldn’t you agree that the cambridge debates invalidated neoclassical (macro)economics?
how should one interpret samuelson’s 1966 ‘summing up’ then?
The Sraffians did not prove that representative capital was impossible; they proved that it was not necessarily true. One still has to (1) demonstrate its empirical likelihood and (2) demonstrate how a model without it can lead to a conceptually tractable framework; these have proved more difficult.
What empirical likelihood demonstration is there in the literature? Besides, the CCC debates, you may be aware of Franklin Fisher’s arguments against representative capital?
I find his critique illuminating. I didn’t expect that from marxist.
Samuelson was a little more nuanced:
“Pathology illuminates healthy physiology. Pasinetti, Morishima,
Bruno-Burmeister-Sheshinski, Garegnani merit our gratitude
for demonstrating that reswitching is a logical possibility in any
technology, indecomposable or decomposable. Reswitching, whatever
its empirical likelihood, does alert us to several vital possibilities:
Lower interest rates may bring lower steady-state consumption
and lower capital/output ratios, and the transition to such
lower interest rate can involve denial of diminishing returns and
entail reverse capital deepening in which current consumption is
augmented rather than sacrificed.
There often turns out to be no unambiguous way of characterizing
different processes as more “capital-intensive,” more “mechanized,”
more “roundabout,” except in the ex post tautological sense
of being adopted at a lower interest rate and involving a higher real
wage. Such a tautological labeling is shown, in the case of reswitching,
to lead to inconsistent ranking between pairs of unchanged
technologies, depending upon which interest rate happens to prevail
in the market.
If all this causes headaches for those nostalgic for the old time
parables of neoclassical writing, we must remind ourselves that
scholars are not born to live an easy existence. We must respect,
and appraise, the facts of life.”
but could it be that perhaps garegnani (and others) correctly pointed out that ‘the emperor has no clothes’, but economists have just too much invested in the neoclassical tradition to see it and amdit it?
as daniel kahnemann put it: “The illusion of skill is not only an individual aberration; it is deeply ingrained in the culture of the industry. Facts that challenge such basic assumptions — and thereby threaten people’s livelihood and self-esteem — are simply not absorbed. The mind does not digest them.
If you think this stuff is important, you should probably go reread this.
Are you saying that a completely incoherent, ‘get out of reality free’ essay somehow refutes Sraffrian economics?
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