post-autistic economics review
Issue no. 25, 21 March 2005
article 3



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A Defence Of King’s Argument(s) For Pluralism

J. E. King   (La Trobe University, Australia)

© Copyright 2004 J. E. King

Paul Davidson’s critique of my ‘Three Arguments for Pluralism in Economics’1 raises a host of important questions. To reply to them all would require a very long article. In the interest of conciseness, I shall restrict myself to twelve points of disagreement between us2.

1. ‘Keynes’s “General Theory” is the sole correct alternative to neoclassical economics’ (Davidson 2004, p. 1). This prompts three questions. Is it unambiguous? Is it correct in all essential details? Is it complete? I would answer ‘No’ to all three. There are Old, New and Post Keynesian interpretations of the ‘General Theory’, and those who call themselves Post Keynesians themselves disagree on many issues concerning it (see King 2002; Davidson 2003-4, King 2004b). ‘Paul Davidson’s interpretation of Keynes’s “General Theory” is the sole correct alternative to neoclassical economics’ is a less ambiguous, but also less acceptable, statement. One reason for rejecting it is that the “General Theory” itself contains elements that many Post Keynesians find unacceptable (Marshallian microeconomics, marginal productivity theory, neoclassical capital theory, to name the three most prominent examples; Paul would dispute the presence of the third). Finally, the “General Theory” is demonstrably not complete, since it neglects long-period issues and open economy problems, not to mention any systematic discussion of macroeconomic policy dilemmas. ‘An extremely valuable source for alternatives to neoclassical economics’, to be sure, but ‘the sole correct alternative’? I think not.

2. ‘All reality is complicated. But that is not a sufficient defense for pluralism’ (Davidson 2004, p. 2). Paul follows this statement with a physical example: gravitation affects the tides in a complicated way, but this does not require plural explanations for the observed tidal phenomena. This is a most unexpected assertion of the unity of the natural and social sciences – an entirely legitimate (if controversial) position, but one which is surprising when it comes from someone like Paul who has spent the last quarter-century arguing that economic phenomena are non-ergodic. As he explains in his latest book, ‘The ergodic axiom asserts that the future can always be statistically reliably calculated from past and present market data’ (Davidson 2002, p. 43). There are good reasons, which Paul himself has identified, for doubting that this is possible in the economic world, where human beings have to make decisions in circumstances of fundamental uncertainty. But the ergodic axiom is true where the data are geophysical in origin; thus Paul’s example misses the point. Metaphors aside, the problem of the completeness of the “General Theory” remains. Part of the complexity of the economic world is due to the multiplicity of problems that require solution, and another part is due to the fact that these problems often change – sometimes very rapidly – over time. On both counts it is improbable that a book published 68 years ago contains all the answers.

3. ‘If one wishes to analyze (explain, discuss) feudalism, or the economies of biblical times, one must add additional restrictive axioms to Keynes’s general theory to obtain a special case theory of feudalism, or of biblical economics [economies?], etc.’ (Davidson 2004, p. 2). This is an astonishing claim. One might wish that Keynes had been more consistently clear in stating it, but it is undeniably true that his “General Theory” is about a capitalist economy, and therefore necessarily about a monetary economy. Money has special properties, which entail that a monetary economy cannot be analysed in terms of a theoretical framework appropriate to the analysis of a barter economy. To cite Paul again: ‘Keynes denied that money was simply an “extra complication” on the operation of a barter economic system’. Like Davidson, he would therefore have been a strong critic of the neoclassical so-called ‘monetary approach’ to the balance of payments, since it ‘analyses the operation of a real or barter economy in which (a) money has no real role to play and (b) liquidity considerations are irrelevant’ (Davidson 2002, pp. 150, 153). Exactly. So what conceivable ‘additional restrictive axioms’ could extend a theory of ‘employment, interest and money’ to an economy in which there is no wage-labour and thus no employment, and also no money, and therefore no interest? Why would anyone wish to perform such an exercise? Is there a shred of evidence that Keynes did? It is clearly true that some form of ‘common general theory’ will ‘underlay [sic] all these specific cases of historical economies’ (Davidson 2004, p. 2). Neither I nor Geoff Hodgson, whom Paul also criticizes, would deny this. Such a ‘common general theory’ would have to say something about the conditions of reproduction (economic, social, ideological), and would probably draw on Marx and Weber to do so (see Hodgson 2001, part IV). It would have very little to do with Keynes. The ‘general’ in Keynes’s “General Theory” refers to its ability to account for involuntary unemployment, which ‘classical’ (pre-1936) macroeconomics could not do. Note that unemployment presupposes employment, which presupposes wage-labour, which presupposes capitalism. Keynes does make this (reasonably) clear. His book was, after all, about ‘the economic society in which we actually live’ (Keynes 1936, p. 3). It was not about the economic society in which some of his ancestors used to live, in past centuries or previous millennia.

4. ‘Hodgson, as well as King and many others, have confused the concept of a general theory with that of Debreu’s concept of general equilibrium as the mother of all economic theory!’ (Davidson 2004, p. 2). I cannot see any justification for this charge, either in my short article or in Hodgson’s long book. I have many criticisms of Hodgson (King 2003), but on this point we agree: some statements can be made that apply to all economies, at all stages of human development. They have nothing to do with Debreu, or Keynes, but relate to the fundamental conditions for economic, social and ideological reproduction (see 3. above). They are important, but extremely limited in their range, and most definitely do not constitute a ‘sole correct alternative to neoclassical economics’.

5. ‘Keynes’s general theory analysis is an axiomatic based approach that required fewer restrictive axioms than any other economic theory’ (Davidson 2004, p. 2; stress removed). Again, this is an astonishing proposition. It may be true that the “General Theory” can be formulated (more precisely, reformulated) axiomatically. There might be some merit in doing so, though there would also be costs (most obviously, a dramatic decline in readability and rhetorical impact). But Keynes never did this, and nor, up to the present day, has Paul Davidson or anyone else. Once it had been done, it might then be possible to evaluate Paul’s claim that Keynes requires fewer axioms than anyone else. This itself, however, is not an unambiguous statement. Fewer axioms to do what, precisely? In reference to what sort of economy? In what sort of economic theory? On my reading, Keynes was a Marshallian in matters of microeconomics. The problems that he tried to solve were thus different from – and more interesting than – those of Walras, and to rejoice in his (supposed) ability to solve them with fewer axioms is a bit like praising a pear tree for having fewer branches per ton of fruit than an apple tree has.3

6. In addition to his view of ‘economics as a mathematical (axiom-oriented) logical analysis’, Keynes also ‘had a pragmatic vision of a physical real world process in mind’ (Davidson 2004, p. 2). True. I rather suspect that in 2004 Keynes would line up with the scientific realists (and perhaps even with their Critical Realist fraction) in opposing the postmodernists, who deny our ability to understand ‘physical real process(es)’, and sometimes appear to deny the existence of such processes in the first place. But it is difficult to comprehend the connection between this ‘pragmatic’ (practical? policy-oriented?) approach and the supposed axiomatic basis of the “General Theory”. Which axioms would be necessary, and sufficient, to justify each version of the ‘Keynes Plan’ that Skidelsky documents in such detail in volume 3 of his Keynes biography? What axioms would be necessary, and sufficient, to justify Keynes’s support for the across-the-board 10% money wage cut imposed in Australia by the Arbitration Commission during the Great Depression? (Keynes 1932). And so on, almost ad infinitum.

7. ‘Bourbaki did not accept Keynes’s search for the “maximum” general theory’ (Davidson 2004, p. 3). Quite possibly true.  I had not realised that this composite French mathematical genius4 had made any comment on Keynes’s “General Theory”, or any other economic issue, and would be very interested in pursuing the appropriate references. More generally, I find Paul’s discussion of Bourbakism very difficult to follow, and its relevance to pluralism in economics is not immediately apparent.

8. ‘It is this Bourbakian view that, I believe, the proponents of “pluralism” are protesting against – even though they do not know it’ (Davidson 2004, p. 3). Not true. Speaking for myself, I’m protesting against the pretensions of any school of economics, mainstream or heterodox, to have discovered the truth, the whole truth and nothing but the truth, since I do not believe that such claims are correct. That is to say, I’m protesting against unsystematic and non-axiomatic neoclassicals like Milton Friedman, in addition to the few remaining unreconstructed Walrasians, if the latter really are/were Bourbakian. I am also protesting against heterodox economists who make similar bold claims. In olden times many Sraffians seemed to me to fall into this category, which is why I was so pleased to see Heinz Kurz and Neri Salvadori coming out in support of pluralism. Today, the culprits are usually sectarian Marxists – and now also, alas, Paul Davidson.

9. ‘Formalism can be consistent with “open models”’ (Davidson 2004, p. 3). True. Babylonian thinkers would probably agree with this. After all, Richard Feynman, whose work on scientific methodology inspired Sheila Dow to promote the Babylonian mode of thought among Post Keynesians, was a theoretical physicist by trade. But formalism can also be consistent with closed models, used dogmatically5. This is what I, and other pluralists, object to.

10. ‘I believe that Hodgson’s view of what is good economics is a matter [of] style, politics and taste on Hodgson’s part’ (Davidson 2004, p. 4). Hodgson can answer for himself, as can Chick and Dow, against whom this accusation is also made. Unlike Roy Weintraub (and Paul Davidson?) I am not at all sympathetic to postmodernism, and I deny that ‘style, politics and taste’ should play the dominant role in economic theory or economic methodology6. Judgement is certainly involved, as Keynes himself recognised in a famous passage: ‘…. the master-economist must possess a rare combination of gifts. He must reach a high standard in several different directions and must combine talents7 not often found together. He must be mathematician, historian, statesman, philosopher – in some degree. He must understand symbols and speak in words.  He must contemplate the particular in terms of the general, and touch abstract and concrete in the same flight of thought. No part of man’s nature or his institutions must lie entirely outside his regard. He must be purposeful and disinterested in a simultaneous mood, as aloof and incorruptible as an artist, yet sometimes as near the earth as a politician’ (Keynes 1933, p. 141). ‘Style’ and ‘taste’ may be part of this, but only part.

11. ‘But how can we assure [ensure?] that different models are not logically inconsistent unless we have a benchmark “general” model with a minimum number of well-specified axioms that acts as the foundation of all other models?’ (Davidson 2004, p. 4). Fine, at some level(s) of generality. (Aristotelian logic might constitute such a model, at a very high level of generality indeed). But such a ‘general’ model is almost inevitably going to be highly abstract, perhaps to the extent of being almost empty of implications when it comes to specific questions concerning the macroeconomics of advanced capitalism, for example. (Again, see 3. above).

12. ‘I believe that encouraging pluralism in economics without a common general theory foundation merely encourages heterodox economists to erect a modern Tower of Babel, thereby making it easier for Mainstream economists to ignore the resulting incomprehensible babel coming from this heterodox structure’ (Davidson 2004, p. 5). This proposition seems to imply that we should permit the mainstream to set the agenda for heterodox economics, and thus to define its structure and content8. Suppose that we were, nevertheless, to accept it. What would our ‘common general theory’ be? At one extreme it might be Paul Davidson’s interpretation of Keynes’s “General Theory”, line by line. At the other extreme, we could settle for something very much weaker, and therefore very much more capable of attracting support: rejection of Say’s Law, as understood by Keynes, and therefore a recognition that aggregate output and employment are more likely to be demand-constrained than supply-constrained. Perhaps we should take as our ‘common general theory’ something in between, like Tony Thirlwall’s ‘six central messages of Keynes’s vision’. Output and employment are determined in the product market, not the labour market; involuntary unemployment exists; an increase in savings does not generate an equivalent increase in investment; a monetary economy is fundamentally different from a barter economy; the Quantity Theory holds only under full employment, with a constant velocity of circulation, while cost-push forces cause inflation well before this point is reached; capitalist economies are driven by the animal spirits of entrepreneurs, which determine investment decisions (Thirlwall 1993, pp. 335-7, cited in King 2002, pp. 5-6). Presumably we can then continue to disagree on everything else. Should we embrace Marshallian microfoundations, or some other sort? Is the quest for microfoundations itself a methodological mistake? Are we to endorse fixed exchange rates, like Paul Davidson, or floating rates, like Thomas Palley and Randall Wray? What is the correct position on the Wray-Mosler-Mitchell-Watts ‘employer of last resort’ proposal to combat unemployment?  At what point, precisely, does vigorous debate on questions like these degenerate into Babel? Keynes’s “General Theory” was surely  ‘never intended to be a theory of everything’, to cite Terry Eagleton only slightly out of context9. It is not ‘some form of cosmic philosophy along the lines of Rosicrucianism’ (Eagleton 1996, p. 111), and it does not offer an answer – still less the guaranteed-correct-only-possibly-answer – for all the world’s problems, 58 years after the death of its author.



1. Davidson 2004; King 2004a. (My article was first published in Journal of Australian Political Economy, an excellent eclectic journal which will interest many northern hemisphere readers of Post-Autistic Economics Review (details from Frank Stilwell at the University of Sydney:


2. I do not attempt to answer the accusation that I have misrepresented Paul’s views in this matter (Davidson 2004, p. 1), as I do not understand the grounds for his complaint. I shall of course be happy to make amends if I have done so.


3. This assumes that Marshallian economics can be formulated axiomatically, without contradiction, which Sraffians – and Walrasians – might deny.


4. The Bourbaki project was begun in the 1930s by a group of seven mathematicians who as ‘an elaborate joke….gave themselves the name of an obscure nineteenth-century French general, Nicolas Bourbaki, and agreed to operate as a secret club or society’ (Weintraub 2002, pp. 104-5).


5. Incidentally, I can’t make any sense of the sentence that straddles pp. 3-4 of Paul’s article (‘In my vie … predictable future’). Perhaps a word or words are missing?


6. Economic policy, of course, is another matter altogether, since this by definition does involve politics.


7. I am grateful to Frank Stilwell for his advice on this question; he is not implicated in the outcome.


8. I owe this important point to Therese Jefferson.


9. I have already stolen this phrase for the title of another paper, this time on Marxism (Jefferson and King 2001).



Davidson, P. 2002. Financial Markets, Money and the Real World, Cheltenham, UK and Northampton, MA, USA: Elgar.


Davidson, P. 2003-4. ‘Setting the record straight on A history of Post Keynesian economics’, Journal of Post Keynesian Economics 26(2), Winter, pp. 245-272.


Davidson, P. 2004. ‘A response to King’s argument for pluralism’, Post-Autistic Economics Review, issue No. 24, 15 March 2004, article 1,


Eagleton, T. 1996. The Illusions of Postmodernism. Oxford: Blackwell.


Hodgson, G. 2001. How Economics Forgot History: The Problem of Historical Specificity in Social Science. London: Routledge.


Jefferson, T. and King, J. E. 2001. ‘“Never intended to be a theory of everything”: domestic labor in neoclassical and Marxian economics’, Feminist Economics 7(3), November, pp. 71-101.


Keynes, J. M. 1932. ‘The report of the Australian experts’, in The Collected Writings of John Maynard Keynes, Volume 21, London: Macmillan and Cambridge University Press for the Royal Economic Society, pp. 94-100.


Keynes, J. M. 1933. Essays in Biography. London: Rupert Hart-Davis, 1951.


Keynes, J. M. 1936. The General Theory of Employment, Interest and Money. London: Macmillan.


King, J. E. 2002. A History of Post Keynesian Economics Since 1936. Cheltenham, UK and Northampton, MA, USA: Elgar.


King, J. E. 2003. Review of Hodgson (2001), Australian Economic History Review 43(1), March, pp. 103-5.


King, J. E. 2004a. ‘Three arguments for pluralism in economics’, Post-Autistic Economics Review, issue no. 23, 5 January 2004, article 2,


King, J. E. 2004b. ‘Unwarping the record: a reply to Paul Davidson’, La Trobe University, mimeo.


Thirlwall, A. P. 1993. ‘The renaissance of Keynesian economics’, Banca Nazionale del Lavoro Quarterly Review 186, September, pp. 327-37.


Weintraub, E, R. 2002. How Economics Became a Mathematical Science. Durham, NC: Duke University Press.



J. E. King, “
A Defence Of King’s Argument(s) For Pluralism , post-autistic economics review, issue no. 25, 18 May 2004, pp. 16-20,