Since the earliest stages of capitalist development, economists have sought to construct theoretical systems that are capable of explaining how capitalism functions. In particular, the question of functional income distribution (between wages, profits/interest and rents) and its relationship to the process of capital accumulation are key issues at the heart of many of these theoretical systems, from David Ricardo to Thomas Piketty. ECOP2011 “Economic Theories of Modern Capitalism”, taught by Joseph Halevi over a forty-year-long career in the Department of Political Economy at the University of Sydney, introduced students to the major system-building attempts in the history of economic thought: the classical/Marxian, neoclassical and Cambridge Keynesian systems. Each attempt is historically contextualised in order to help students understand why different theorists focused on specific aspects of capitalism, as well as the ideological function that these economic theories provided during different periods in the history of modern capitalism.
The final component of the subject, and by far its most challenging aspect, was an introduction to a number of critiques that challenge the logical consistency of these theoretical systems. From these critiques, it is possible to identify a crucial limitation shared by all of the theoretical systems dealt with in this subject – namely an inability to explain income distribution and capital accumulation in an economic system where production of commodities takes place in many different sectors by means of commodities and labour. ECOP2011 concluded by imploring political economy students to focus their efforts on explaining actual capitalist economic processes in historical time so that the pitfalls of the system-builders can be avoided. Joseph suggests that a modern political economics must be built upon the contributions of post-Keynesians such as Michael Kalecki, Joan Robinson and Luigi Pasinetti, for whom capitalism is a complex and dynamic open system, constantly evolving and transforming in historical time.
There will be a dedicated feature on the notes of ECOP2011, to come. For now, we feature the farewell lecture given by Joseph Halevi at the University of Sydney given on 3 August 2015.