End of the Tram Line Running for 40 years

On June 3rd 2015 at 15:00 hour, I have finished the last ever class in Ecop 2011 Economic Theories of Modern Capitalism, a second year course in the Political Economy Department of the University of Sydney. This is a course I have founded in 2004 and it runs from the Physiocrats to present day austerity policies.

The course should have been called Economic Theories since it deals only with theory, the addition Modern Capitalism was introduced in order to differentiate it from the standard micro-macro courses offered in the standard economics department at the University of Sydney. In fact the course might as well be called the Luigi Pasinetti-Piero Sraffa-Paolo Sylos Labini-Michal Kalecki-Paul Sweezy-Peter Kriesler course as it is heavily based on their writings. This for the fundamental parts. For the more mundane parts such as General Equilibrium and how Rational Expectations connect to it, the course owes a lot to Frank Hahn and to Alan Kirman who destroyed the absurd claims of that, supposedly policy oriented, school (rational expectations). In this context an important role is played by the SMD theorem, known also as the “anything goes theorem” after which every standard microeconomic text is not worth the paper is written on.

In the last few years we added to the course the crucial book by Geoffrey Harcourt on The Structure of Post Keynesian Economics. On the whole the course ran as a Pasinetti course since the Great Luigi opens the course with his fundamental first chapter of his book Lectures in the Theory of Production, he gets us out of the mess of the Marxian Transformation Problem with his Appendix to chapter 5, he performs (in the course), with Amit Bhaduri and Geoff Harcourt on the issues of neoclassical capital theory, he then comes in again with Keynes and with post WW2 growth and distribution theory, and reemerges at the end of the course with his exquisite 2012 Cambridge Journal of Economics paper on why the classical notion of savings and profit is superior to the standard Modigliani-Miller approach (and a fortiori to the Efficient Market Hypothesis). I have never assigned any textbook to this course.

Along with my experience in France at Grenoble and at the ISMEA in Paris, I consider the building and teaching of this specific course at the University of Sydney, the most comprehensive and stimulating experience in my 40 year long university life which began in 1975 as a semi — unemployed lecturer at the Graduate Faculty of the New School for Social Research in New York.

A set of test runs of the course occurred in the mid 1990s in France at the Université Pierre Mendès France of Grenoble when I was visiting professor there for a number of years. I then picked up a third year course called modélisation and transformed it into a course on modélisation et croissance (modelisation and growth). My super-exceptional friend Rédouane Taouil, professor at the same university, told me “through growth theory you can capture all the essential issues and problems in economic theorising”. I thought it was an excellent idea and created, with the help of Rédouane, a course in two sectors and two goods that did exactly that. I therefore am extremely thankful to Rédouane for his suggestions and help and to the people who, for two decades, invited me every year to spend a Semester and often more than that at the Université de Grenoble Pierre Mendès France.

My stay in Grenoble turned out to be extremely important for fixing the epistemological basis of what later would become Ecop 2011. Indeed my proposal on how to reconstruct the second year economic course at the Political Economy Department in Sydney was written (e-mailed) while I was in France at Grenoble for the first three months of 2004. The first draft of the proposal for the new course was written in consultation with Rédouane often dining at Michel Damian’s place. Indeed the first Session of the Ecop 2011 course began in the second Sydney Semester of 2004. The use of a growth theoretic approach to evince the most important limitations in economics was further made possible by my collaboration with Peter Kriesler and by our participation in activities set up by Riccardo Bellofiore, professor at the University of Bergamo in Italy (near Milan).

The material-practical success of the Ecop 2011 program has been due to the fundamental contributions of my Sydney colleagues, where by colleagues I only and exclusively mean the people involved in teaching the tutorial programme, as well as to the responsiveness of a good part of the students who participated in it. Indeed, upon the completion of the degree several of them became the course’s Tutors as it will be shown below.

I should start from Dr Roni Demirbag. Roni has tutored from the very beginning back in 2004 and coordinated the entire tutorial programme. He worked in and on it in 9 out of the 12 sessions of the course, the remaining three having withdrawn to complete his Doctoral Thesis and for an extended stay abroad. Afterwards he returned to teaching in Ecop 2011. Roni Demirbag has been a pillar in the programme, and his suggestions for new material and on how to focus on crucial concepts that provided the vertically integrated links for the whole course, have been invaluable. The 500 page reading pack of the course, which includes also the journal articles and book chapters that students ought to use for essay and tutorial preparations, is to an important extent the product of his efforts in updating it. The constant dialogue with Roni in relation to the course has benefited our views on research and on where to take it from here and how, at least theoretically.

Ms Ioulia Petrova, now Ms Ioulia Swain, has been among the very best students the course has ever had. After obtaining her degree she became a Tutor three years ago. During this period of time, Ioulia has been absolutely crucial for keeping up, and further raising, the academic standards of the course. In the last session (2015) her contribution has been absolutely vital.

Ms Emma To also has contributed over a number of years to tutoring in Ecop 2011. Emma too started as an excellent student in the course and, upon completion of her degree, she became a tutor in it. She was highly regarded by students for her capacity to make things very understandable and for suggesting which of the readings were more relevant than others.

Matthew Skellern was a real champion. He tutored in the second year of the course’s life (2005, I seem to remember) leaving a crucial mark in the form of a didactically seminal tutorial paper on the neoclassical keynesian synthesis. We all used his paper ever since because it brings out very clearly the difference between the Hicks-Modigliani view of Keynes and the Pasinetti non neoclassical conception of effective demand and how it reflects much more Keynes’s own vision, although not necessarily Keynes’s form of expression. Matthew then left for London where he obtained a Ph.D at LSE being now Dr Matthew Skellern. Congratulations!

Zach Alexopoulos tutored for one Semester few years after Matthew Skellern did. I should thank him for his contribution in suggesting some changes to the tutorial programme. In particular as in the case of Matthew he left a very valuable tutorial paper on the Ramsey exercise which explains very clearly to students the meaning of the “state of bliss”.

Ms Amanda McCormack began as a successful student in one of the very early years, I think in the year Ecop 2011 was founded. Since then she remained steadfastly an enthusiastic supporter of the course and kept , through her suggestions, following after its evolution. More recently Amanda tutored it within the framework of the groups organised by St John’s College on the University of Sydney campus. I am most thankful to Amanda for her more than a decade long support.

I should thank also Ms Nadia Yetto-Lim. I do not remember with certainty whether she tutored in the course, I have the impression that she did. At any rate Nadia was a student in it as well as a strong supporter and being an extremely bright student she came forward with several suggestions. I remember distinctively that I wished she became a tutor, but she left to work for a law firm.

It has all ended now. Thank you all 1000 times. Do not throw away the reading pack if you still have it. And do not forget what we learned from it. Keep in touch.