Great Thinkers in Economics Series Series Editor: A. P. Thirlwall is Professor of Applied Economics, University of Kent, UK. Joan Robinson Great Thinkers in Economics is designed to illuminate the economics of some of the great historical and con- temporary economists by exploring the interactions between their lives and work, and the events surround- ing them. The books are brief and written in a style that makes them not only of interest to professional economists, but also intelligible for students of economics and the interested layperson. Titles include: G. C. Harcourt Alessandro Roncaglia PIERO SRAFFA William J. Barber and GUNNAR MYRDAL Paul Davidson Prue Kerr JOHN MAYNARD KEYNES Peter D. Groenewegen ALFRED MARSHALL Michael Szenberg and Lall Ramrattan FRANCO MODIGLIANI Gavin Kennedy ADAM SMITH John E. King NICHOLAS KALDOR Gordon Fletcher DENNIS ROBERTSON G. C. Harcourt and Prue Kerr JOAN ROBINSON Forthcoming titles include: Esben Sloth Anderson JOSEPH A. SCHUMPETER Michael A. Lebowitz KARL MARX Julio Lopez and Michaël Samuel Assous MICHAL KALECKI Gerhard Michael Ambrosi ARTHUR C. PIGOU J. R. Stanfield JOHN KENNETH GALBRAITH Warren Young and Esteban Perez ROY HARROD Roger Middleton ROBERT SOLOW Paul Mosley and Barbara Ingham SIR ARTHUR LEWIS Robert Dimand JAMES TOBIN Great Thinkers in Economics Series Standing Order ISBN 978–14039–8555-2 (Hardback) 978–14039–8556–9 (Paperback) (outside North America only) You can receive future titles in this series as they are published by placing a standing order. Please contact your bookseller or, in case of diffi culty, write to us at the address below with your name and address, the title of the series and the ISBN quoted above. Customer Services Department, Macmillan Distribution Ltd, Houndmills, Basingstoke, Hampshire RG21 6XS, England © G. C. Harcourt and Prue Kerr 2009 All rights reserved. No reproduction, copy or transmission of this Contents publication may be made without written permission. No portion of this publication may be reproduced, copied or transmitted save with written permission or in accordance with the provisions of the Copyright, Designs and Patents Act 1988, or under the terms of any licence permitting limited copying issued by the Copyright Licensing Agency, Figures and Table vi Saffron House, 6-10 Kirby Street, London EC1N 8TS. Preface vii Any person who does any unauthorized act in relation to this publication may be liable to criminal prosecution and civil claims for damages. Acknowledgements viii The authors have asserted their rights to be identified as the authors of this work in accordance with the Copyright, Designs and Patents Act 1988. Abbreviations ix First published 2009 by 1 Introduction 1 PALGRAVE MACMILLAN 2 The Economics of Imperfect Competition 15 Palgrave Macmillan in the UK is an imprint of Macmillan Publishers Limited, registered in England, company number 785998, of Houndmills, 3 Joan Robinson and her Circle in the Run-up to Basingstoke, Hampshire RG21 6XS. and Aftermath of the Publication of The General Theory 23 Palgrave Macmillan in the US is a division of St Martin’s Press LLC, 175 Fifth Avenue, New York, NY 10010. 4 Marx in Joan Robinson’s Argument 33 Palgrave Macmillan is the global academic imprint of the above companies 5 Joan Robinson and Socialist Planning in the Years and has companies and representatives throughout the world. of High Theory 57 Palgrave® and Macmillan® are registered trademarks in the United States, 6 The Making of The Accumulation of Capital 76 the United Kingdom, Europe and other countries. 7 The Choice of Technique in the Economy as a Whole ISBN-13: 978-1-4039-9640-4 hardback and the Cambridge–Cambridge Debates in the This book is printed on paper suitable for recycling and made from fully managed and sustained forest sources. Logging, pulping and manufacturing Theory of Capital: Joan Robinson’s Role 101 processes are expected to conform to the environmental regulations of the 8 After The Accumulation of Capital: Defence and country of origin. Development 118 A catalogue record for this book is available from the British Library. 9 Joan Robinson’s Views on Development A catalog record for this book is available from the Library of Congress. Economics as Political Economy 141 10 9 8 7 6 5 4 3 2 1 18 17 16 15 14 13 12 11 10 09 10 An Introduction to Modern Economics: Printed and bound in Great Britain by A Light that Failed? 165 CPI Antony Rowe, Chippenham and Eastbourne 11 A Concerned Intellectual’s Task: Joan Robinson’s Three Popular Books 187 12 Conclusion: Joan Robinson’s Legacy 203 Notes 228 References 245 Index 261 Figures and Table Preface Figures Both authors had the privilege and pleasure of knowing Joan Robinson personally, GCH from 1955 on, PK from 1978 on. As we mention in the 3.1 Full employment and involuntary unemployment concluding chapter, Chapter 12, we have written over 100 essays on in The General Theory 31 the themes pursued in the book. In GCH’s case, the major intellectual reason for his return to Cambridge from Adelaide in 1982 was to write 7.1 Joan Robinson’s pseudo production function 109 the intellectual history of Joan Robinson and her circle. The aim of this 8.1 The banana diagram 130 book is to bring our collective findings together in one volume, to set 8.2 The ‘inflation barrier’, distribution and growth 132 out in one place what we believe to be the substantial legacy of Joan 9.1 The choice of techniques in China 149 Robinson. It is our tribute to a much-admired and loved teacher, col- league and friend. In writing the volume, we have been greatly helped by the comments Table of Robert Dixon, Cristina Marcuzzo and the very detailed and careful reading of the manuscript by Tony Thirlwall, the General Editor of the 9.1 Limits on the rate of accumulation 147 Series, ‘Great Thinkers in Economics’. We have not always followed his advice but we are extremely grateful to him for his support and encouragement. We would also like to thank Debra Armstrong, Janet Nurse, Jane Starnes and Hazel Yorke for their great help in preparing the many drafts of the manuscript, and the librarians of the Marshall Library at Cambridge and at the University of New South Wales for their courteous help in chasing up elusive bibliographical entries. Finally, col- leagues and friends too numerous to name have greatly aided us in the task of evaluating the contributions of Joan Robinson to our ‘miserable subject’ (Keynes, 1971–9, C.W., vol. XIV, 190). As always, GCH thanks Joan Harcourt for her great love and for her sustained support of a task which has taken more than a quarter of a century to come to an end! PK thanks Stephanie Blankenburg for her boundless generosity and Wesley Rigg for his patient faith throughout the writing of this intellectual biography. vi vii Acknowledgements Abbreviations Cambridge Political Economy Society Trust GCH Geoffrey Colin Harcourt Archives of Marshall Library, Faculty of Economics, Cambridge JVR Joan Violet Robinson Modern Archive Centre, King’s College Cambridge EAGR Edward Austin Gossage Robinson Archives of Wren Library, Trinity College Cambridge Archives of London School of Economics JMK John Maynard Keynes BBC Written Archives RFK Richard Ferdinand Kahn Institute of Advanced Study, University of Bologna NK Nicholas Kaldor Discipline of English, Communication and Cultural Study, University of Western Australia C.E.P. Collected Economic Papers of Joan Robinson (five volumes plus Index) C.W. Collected Writings of John Maynard Keynes EIC The Economics of Imperfect Competition EME An Essay on Marxian Economics viii ix 1 Introduction This volume is an intellectual biography of Joan Robinson (1903–83) Joan Robinson, (1903–1983), is widely considered to be amongst the great- who was undoubtedly one of the greatest economists of the twentieth est economists of the twentieth century. After the success of her first book, century and the greatest woman economist.1 In its pages we recount The Economics of Imperfect Competition, Joan Robinson shifted her attention to Keynes’s work. She was one of Keynes’s circle of trusted colleagues, studying the her intellectual development and her major contributions from her first theoretical possibilities offered by his General Theory. publication in the early 1930s to her last, which was published post- This comprehensive study of Joan Robinson recounts her intellectual develop- humously in 1985. Her story is intricately entwined with the story of ment and her major contributions, examining; her role in the making of The Cambridge economics in the twentieth century, taking in major changes General Theory, her sympathetically critical interest in Marxian economics, her in the way economics was thought about, done and taught, changes to contributions to Labour Party policy in the 1930s and 1940s, her writings on development in China and India and her critique of the conceptual foundations which Joan Robinson and her circle, the first generation of what may of mainstream economics. Joan Robinson’s story is intricately entwined with the loosely be called Keynes’s pupils, made major contributions, from the story of Cambridge economics in the twentieth century, taking in major changes 1920s until well into the post-war years. Most of the major players in the way economics was thought about, done and taught. remained active until their deaths, most of which (apart from Keynes’s, This book is not only indispensable reading for all interested in the history of course, who died in 1946) occurred in the 1980s and 1990s.2 of Joan Robinson’s life and work, but also to those studying Keynesian, Post- Keynesianism and economic development With the intertwining of reason and identity, it seems pertinent to offer some glimpses into Joan Robinson’s life.