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Economics 293
in economics against the real needs in economic practice. The results can be
summed up in a few sentences.
Thereundoubtedly seems to be a progressive decrease in the number of schools
and trends in contemporary economics1o - although this may often mean eclec-
ticism rather than synthesis. Even before the second world war, historicism and
institutionalism had ceased to exist in the United States, although a bias to-
wards eclecticism remains as a hangover from their original literature (Ameri-
can and German). The Austrian psychological school also belongs to the past.
The growth of mathematical economics rendered the separate mathematical
school (of Lausanne) practically superfluous ; the theory of market equilibrium,
its main theoretical conception, was put in the shade by the importance given to
dynamic problems (mainly the theory of economic growth), especially when it
was found that the market equilibrium theory was founded on false assumptions
and led, at best, to trivial results.”
The rational elements in Keynes and the political implications have been
absorbed into contemporary Western economics and also, partly, into Marxian.
The Keynesian doctrine constituted of course the major obstacle for the neo-
classical school, centred in Cambridge; once it had been absorbed into Western
economics and Pigou, last great representative of the Cambridge school founded
by Marshall, had died, the term neo-classical lost its former significance. Even if
still used (cf. A Neo-Classical Theory of Economic Growth, the well-known book
by J. E. Meade published in 1960), its main purpose is to bridge the gap between
classical economic analysis and modern theories of economic growth (the ‘grand
neo-classical synthesis’ which wil be dealt with later).
There were vital changes in Marxism also. The more praxiological approach,
especially in socialist economics, was referred to above. In addition, the former
separation into schools (Austro-Marxist, Russian, and so on) disappeared.
The appearance of Keynes’ doctrine coincided with Kalecki’s theory of the
business cycle. Starting from the Marx schemes of reproduction, and referring
back to Rosa Luxemburg’s theory of under-consumption, Kalecki reasoned
from insufficient aggregate demand as an obstruction to the dynamics of capi-
talist production.12
The Keynesian revolution itself indirectly helped to strengthen the position
of Marxism in the Western literature. Marxist theory aroused vivid interest even
in Anglo-Saxon literature, hitherto the most hermetic to outside influences. The
interest grew especially when Keynesians realized that Marx and his followers
had long been using certain analytical tools and categories for which they thern-
selves were still only groping.
On the other hand, Marxists, despite their not unfounded disdain for tradi-
tional academic economics, discovered they had to take the Keynes’ doctrine
into account in devising a modern programme of reform.
But this rapprochement between the heirs of the subjective (and especially neo-
classic) school and Marxists did not mean a decline of the schools themselves,
or the disappearance of the two different trends in contemporary economics.
The similarity of certain common preoccupations and tools of analysis only serves
to underline how different Marxism is in its objectives and social conceptions.