Testimonials and Greetings

Geoff Dow, The University of Queensland

By his own criteria, Geoff Harcourt has set out some of the most pressing and long-standing issues in political economy – first, his elaboration of ‘Cambridge controversies’ in the theory of capital, and second, his enunciation of the need for ‘situation-specific’ analyses to guide policy. In both these clusters of unsettled – and presumably never-to-be-settled – debate in the discipline, Harcourt’s guidance and admonishments have had discipline-defining resonance. Both are indicators of his substantial contributions to ongoing scholarship, allowing the anticipation of unresolved conundrums in the post-Keynesian worldview, yet suggesting that definitive paths to resolution may be impossible.

In each case, Harcourt’s writing shows, the problems have been there, and in evidence, since the beginning. Classical controversies continue still over definitions of capital, over conceptions of what wealth is, of how achievements can be assessed and measured, and even of how our efforts can sometimes – often – cloud the understanding we are attempting to ensure. Though Harcourt’s published work has been generous and extensive, it has, like all major contributions to social science, implications beyond those explicitly reckoned. Much remains to be done by followers. Argument will persist. And methodological disputes that have been prominent over the past two centuries will continue to distinguish different sub-branches of scholarship and to divide them against each other.

A complete understanding of capital is necessarily inter-disciplinary. It requires input from political science, sociology, history, economic anthropology and philosophy. These ancillary disciplines help to elucidate the scope (possibilities as well as limits) of purposive human and institutional action, ‘those variables which can be deliberately controlled’ as Keynes put it. If the nature of the task renders the Cambridge understanding of capital incomplete, the incompleteness is indicative of real intractability, rather than deficiencies in the political economy corpus thus far. Because it’s pan-disciplinary, intellectual appreciation of capital is always unfinished, contested and self-consciously inexact. Capital has never been a self-evident ‘thing’. Neither a sum of money nor a list of equipment, appreciation of capital’s power and importance requires an elaboration of the conditions which allow it to be combined with labour in a productive labour process. These conditions are historically contingent, interminably contested and consequently variable.

Harcourt’s reflections on capital prompt us to acknowledge that deliberate obfuscation and mischief-making (such as the assertion that capital is ‘factor of production’ commensurate with land and labour, and uniquely deserving of its ‘return’) has always characterised our intellectual history, absorbing much effort and creating unnecessary (or necessary?) angst. Strong and recurrent suggestions persist that maverick forms of analysis may not have been as unhelpful as the orthodox tradition has pretended.

Seeking to avoid both reckless dogmatism and insipid caution, Harcourt has recommended a ‘horses for courses’ approach (to theoretical and policy-oriented political economy): if conclusions must be tailor-made for each country’s history, sociological structure and inherited institutions, as he has rightly insisted, we’re all obliged all to downplay grand ambitions while maintaining vision and alertness to material possibilities. We (all human societies) are inextricably caught in a contradiction that cannot be eliminated, or managed. Simultaneously, as structural constraints confront our deliberative efforts, efforts to circumvent them are unceasing and recurrently inevitable, but, as we’ve all been reminded in recent decades, these latter are frequently unsuccessful. In Geoff Harcourt’s rendering, observed variability, together with unsettled academic skirmishes between theorists, dictate a quest for ‘plausible’ instead of definitive or overly assertive judgements. Nonetheless, it now seems that even modest plausibility (in reasoning or in policymaking) is easily countered with derision, not just from politically recalcitrant voices, but increasingly from intellectuals too.

Post-Keynesian argument has long postulated that achieving full employment is less difficult than maintaining it once it is attained. This is because, as Harcourt (with his close collaborator Claudio Sardoni) has argued – and as Marx and Keynes similarly concurred – economic activity necessarily transforms industrial structure, not just quantitatively but also qualitatively. The investment which leads to increments in capacity may be misjudged and probably also depends on decisions made in other sectors, where, in turn, investment outcomes cannot be guaranteed. Regular growth of industrial capacity causes sectoral adjustment and will not normally lead to smooth processes of economic development.

Geoff Harcourt has also been well aware that political or national settlements can be caught in the underlying turbulence. Australian labour in the 1970s and 1980s attempted to develop ‘fixes’ roughly in accordance with the Cambridge-Keynesian tradition, though also informed by vibrant research drawing from comparative political economy, and to a discernible if limited extent, from Marxism. All the components – indexation of wages for price increases, struggles to extend incomes control to all (non-wage) incomes, challenges to private prerogative in industrial restructuring during the ascendancy of globalisation – were resisted by those interested in narrowing the scope of domestic economic policy.

Unfortunately, the successes of arbitration over its 100-year history (with its effective institution-building) could not be built-on to convert the proposals of the Accord period into ongoing mechanisms for control of inflation and income distribution and levels of employment. National wellbeing was sacrificed. Australia’s political class and associated advocates (labour, social justice activists, expansive thinkers) were sidelined and Cambridge economics ‘down under’ was thwarted, in the 1980s, precisely when it promised significant accommodation between empirical opportunities and unreasonable limits.

This discrepancy between technical possibilities of the economy and actual achievements for the populace remains the most serious disappointment in contemporary polities. The post-Keynesian imagination, with Geoff Harcourt as its most noteworthy contemporary envoy, has reminded us that opposites coexist. Crises and responses to crises, structural constraints and voluntaristic attempts to resist them, the intractability of economic forces and deliberate actions of the polity, seemingly eternal resistance to good policy from within the polity and the responsibilities of politics itself, a public sphere insisting on its integrity together with what has been called the ‘dialectic of hope and fear’ all coincide. Together these constitute the confusing open-endedness of present trends. Without Geoff Harcourt and post-Keynesianism, we would not be able to recognise any favourable collaboration between Marx and Keynes.