The Relevance and Irrelevance of Marxian Economics

During the last century, Marxian thought was often presented as an all comprehensive ideology, a Weltanschauung called ‘Marxism’ or ‘Marxism-Leninism’. The process of producing this ideology started with the popular writings of the late Engels, who not only tried to present a popular version of Marxian theory, but also attempted to satisfy the desire of growing parts of the working class to have their own view of the world, which was distinguished from the dominating views of bourgeois society. The transformation of Marxian theory in Weltanschauung was enforced by the social democratic parties of the late 19th century, which needed short formulas and brief descriptions as weapons of propaganda. This process continued in the writings of Lenin and culminated after his death in ‘Marxism-Leninism’: a deterministic picture of history, an economic picture of society and a mechanical understanding of dialectics as an eternal set of ‘laws of development’ – constructions which served above all as instruments of ideological justification for the policies of the communist parties.

Download full paper

“Heinrich, Michael. 2004. “Relevance and Irrelevance of Marxian Economics” New School Economic Review 1(1): 54-58

The Steady State Growth Rate in the Neoclassical Theory: A Brief Survey

The so-called ‘marginalist revolution’ took place around the decade of the 70s of the 19th century. It produced a theory of the level and distribution of output based on the endowments of production factors, technology and consumer preferences. In such a theory, economic growth had to be conceived as the result of the increase in the endowments of factors. Early marginalist analyses of economic growth were developed by Alfred Marshall, Gustav Cassel and Knut Wicksell. We, however, start our survey from Robert Solow’s (1956, 1957) formulation of the neoclassical growth model because it later became the basic point of reference for any discussion on neoclassical exogenous and endogenous growth.

Download full paper here

“Zamparelli, Luca. 2004. “The Steady State Growth Rate in the Neoclassical Theory: A Brief Survey.” New School Economic Review 1(1): 42-53

Financial Integration, Growth and Macroeconomic Volatility: Evidence and Interpretations

Has the increased access to capital increased investment? Is increased financial globalization associated with economic growth and macroeconomic stability? This paper reviews the theoretical benefits of financial integration, the ‘consensus’ evidence of its failure to deliver the expected growth and stability, and some alternative interpretations on what is missing to obtain the benefits and avoid the risks.

Download the full paper

“Marca, Massimiliano La. 2004. “Financial Integration, Growth and Macroeconomic Volatility: Evidence and Interpretations” New School Economic Review 1(1): 31-41

Fiscal Policy: A Potent Instrument

There has undoubtedly been a major shift within macroeconomic policy over the past two decades, from the pre-eminence of fiscal policy to that of monetary policy. The latter has gained considerably in importance as an instrument of macroeconomic policy, whereas the former is rarely mentioned in policy discussions anymore, except in the context of limiting its use. We argue in this short paper that fiscal policy remains a powerful instrument for regulating the level of aggregate demand. We discuss two broad aspects of fiscal policy: its status in the eyes of the ‘new consensus’ in macroeconomics, and its institutional aspects.

Download full paper here

“Arestis, Philip and Malcolm Sawyer. 2004. “Fiscal Policy: A Potent Instrument.” New School Economic Review 1(1): 15-21