Three essays on the role of history and the theory of long-run growth
Creators: name: McColloch, William
Publisher: name: University of Utah
Year: 2012
Subjects: German historical school
Growth theory
Kaldor
Roscher
Steuart

description: The dissertation is comprised of three essays exploring topics in the history of economic thought and macroeconomics. The first essay contends that despite a growing body of scholarly literature on Sir James Steuart, his theory of history and influence on Marxian political economy have been largely ignored. It is argued that Steuart's importance to students of the history of political economy is three-fold: First, Steuart appears to have been the first thinker in political economy to both recognize the historical specificity of capitalism, and to conspicuously incorporate that realization into his system. Secondly, in Steuart's approach to the question of value and profit, we find conceptions that defy easy classification. Steuart is seen to plainly abandon the mercantilist understanding of profit as determined in the sphere of exchange alone, and to treat what he calls the real value of a commodity as intimately related to its necessary labor time. Finally, we argue that Steuart's contemporary notoriety made him far more influential than is commonly recognized. In particular, we contend that Steuart, via Hegel, may have exercised an indirect influence on Marx's own theory of history in ways that Marx could not have recognized. The second essay offers a reinterpretation of the central figure of the ‘older' German Historical School, Wilhelm Rosher. The essay contends that the heterodox aspects of Roscher's thought have been greatly overstated, and that much of his proposed historical narrative should be seen as protoneoclassical. Having outlined Roscher's approach to historical economics, the paper surveys the alternative approach of one of Roscher's contemporaries: Richard Jones. In Jones' system, we find a much richer approach to historical economics, one that has been overshadowed by the School of Roscher and Schmoller. The third essay presents a critical survey of two distinct families of post-Keynesian growth models, drawing their basic inspiration from either Nicholas Kaldor or Michael Kalecki and Joan Robinson. A fundamental distinction between these families of models lies in their treatment of investment. In Kaldor's ‘mature' work, which adopts John Hick's concept of the supermultiplier, investment is derived demand attuned to the growth autonomous demand. In contrast, with Kaleckian-Robinsonian models, investment takes a life of its own in the form of an independent investment function dependent on the rate of profit. The result of this modeling choice is that changes in distribution can have ambiguous effects on the rate of accumulation, effects which depend on the specification of the investment function. Modern Kaleckian-Robinsonian models, following Steven Marglin and Amit Bhaduri, draw the distinction between profit- and wage-led growth regimes. In the wage-led case, a rising wage-share bolsters demand and increases the rate of capacity utilization which, in turn, induces firms to invest. In the profit-led case, however, a rise in the profit share serves as the stimulus to investment, and ultimately growth. Against an empirical literature that seeks to understand the neoliberal era in these terms, it is argued that recent US growth may be better understood in the context of a simple Kaldorian supermultiplier framework. While the profit share has risen significantly over the past 30 years, the conjecture that the US growth regime has been profit-led is largely based upon spurious correlations. Instead, investment has remained demand-led, as consumer spending was (unsustainably) bolstered by rising debt-income levels.