by Philip Pilkington

Nothing gets heterodox economists quite so fussed as the long-run theory of the rate of profit. Yet, Keynes did without one altogether and when examined closely there is no way that such a theory can say anything tangible about the real world. In order to lay this out I am going to take my leave from Joan Robinson’s excellent book Economic Heresies: Some Old-Fashioned Questions in Economic Theory.

When Robinson discusses Keynes she says that he had no real interest in a long-run theory of profits and accumulation. In the long-run, Keynes famously said, we are all dead. All that matter is short-term analysis. Crucially Keynes thought that profits and accumulation could not be discussed without reference to expectations — that is, to his ‘animal spirits’ — and thus any discussion about profits and accumulation in the long-run is only building so many castles in the sky.

In her book Robinson takes Keynes to task for discussing financial markets rather than the actual sphere of production. The Marxian and Ricardian influences on Robinson are clear when she writes, for example,

Keynes rather lost his grip on the distinction between the rentier and the entrepreneur. His discussion of the ‘state of long-term expectations’ is devoted to the Stock Exchange rather than to the accumulation of means of production. (pp31-32)

I think in this instance Robinson is reading her own biases into Keynes’ work. I don’t think that Keynes was confused at all. I think that he had probably considered the question of accumulation in the long-run and dismissed it as something that could not be adequately or usefully theorised.

Throughout Robinson’s discussion of accumulation in the long-run in the book you can feel that this doubt is nagging away at her. She is at pains to justify the idea that such an analysis might produce useful results but she never quite manages to do so.

The book was first published in 1971 and I think that in the next few years Robinson would basically give up on trying to theorize accumulation and more so focus on the idea that, since non-homogenous historical time is what we really deal with in economics, most of these attempts at theorisation are only so many parlor games. I think you get a distinct impression of this in her 1974 Stanford lecture entitled What is Wrong With Neoclassical Economics?.