JAN TOPOROWSKI. CURRICULUM VITAE. 1 Mall Studios. Tasker Road. London NW3 2YS. Telephone: Facsimile: e-mail. Publications on Jan Toporowski. There is 1 publication for Jan Toporowski. by Hyman P. Minsky and the theory of capital market inflation by Jan Toporowski. Jan Toporowski WP 6 Leader. SCHOOL OF ORIENTAL ANDAFRICAN STUDIES, SOAS, LONDON, UK. [email protected] is Professor of Economics and.
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Jan Toporowski has recently published Volume 1 of a biography of Michal Kalecki. He agreed to this interview with the WEA Newsletter. It was not a matter of choice. I discovered Kalecki when I was studying economics at Birkbeck College in the late s.
Michal Kalecki’s legacy, an interview with Jan Toporowski | World Economics Association
The macroeconomics taught at the time and still today was all about the general equilibrium that is supposed to be immanent in the economy. This was a revelation to me, in explaining all the phenomena that I was witnessing in my work, toporowdki that seemed strangely absent from the curriculum that I was studying.
After that I read everything that I could find by him. One afternoon he and Peter Kriesler invaded my hotel room and invited me to join Peter Kriesler and Bruce McFarlane in writing an intellectual biography of Kalecki.
This joint effort did not come to anything, although we had some interesting discussions, did some basic research, toporowwski pulled together some interesting material.
Although I was aware that I had unique advantages in writing this biography, because of my familiarity with Polish, I felt that I did not adequately understand his economics of capitalism, and I kept being distracted by my work in monetary and financial economics. Kalecki returned dramatically to my agenda in when I lost my job at South Bank University.
With few other prospects I applied for and was awarded a Leverhulme Fellowship to write an intellectual biography of Kalecki. The Fellowship was for one year. But it allowed me to get visiting positions at the University of Cambridge and at the School of Oriental and African Studies, University of London, and to do some of the archival research necessary for this. After this it was a matter of writing up my material. So, in the end it was not so much a choice, as a way of saving my career and paying tribute to economists, like Kalecki, who have illuminated economics for me and those, like Geoff Harcourt, Victoria Chick, Charles Goodhart and my family who have supported me through a troubled career.
Undoubtedly his theory of the business cycle, the most serious challenge to general equilibrium macroeconomics. This is an approach to economics wholly different to the standard general equilibrium theory that has prevailed since the end of the nineteenth century.
It is dynamic, accounts for economic change, and incorporates the most commonly observed phenomena about contemporary capitalism: All this is expounded in a carefully reasoned analysis rather than accusations of injustice and bad faith. He applied similar reasoning to the economic problems of developing countries and the centrally planned economies of the communist bloc. The Revolution in Lodz and the turbulence in that city right up into the s brought home to him that capitalism is not just about the distribution of income and the allocation of resources.
It also involves daily struggles to limit the power of capitalists in society, because their social and economic circumstances force them to make decisions that are irrational from the point of view of the efficient management of social resources, and lead to misery and waste.
This inefficiency and waste is epitomised in the business cycle, in which full employment is only obtained, if at all, at the peak of the boom, and then only temporarily. Unemployment and excess capacity is the natural state of capitalist economies, along with poverty and the more or less blatant autocracy of business interests.
Keynes and Kalecki had one fundamental idea in common. This is that a free market capitalist economy cannot be brought into an efficient, full employment, equilibrium by price and wage flexibility. What determines the equilibrium in such an economy is the level of investment. If investment is too low, then there will be involuntary unemployment. If investment is too high then there will be inflation and foreign trade difficulties.
However, Keynes and Kalecki differed over the scope and significance of money and monetary policy. For Kalecki, money and monetary policy were endogenous to the business cycle.
The circulation of money is determined by business investment, and not by credit policy. In their interest rate and credit policies, central bankers delude themselves that they control the business cycle, when it is the business cycle that controls central bankers.
Inflation targeting or the Taylor Rule reveal the conditions that adapt central bank operations to the business cycle, rather than showing the mastery of central bankers over the business cycle.
By contrast, Keynes never properly put aside the idea, inherent in his earlier work, that the business cycle man be managed somehow by monetary policy. In part this was because Keynes needed to find a place in his macroeconomics for his highly original monetary analysis whereas Kalecki, having determined that money plays a largely passive role in the toporrowski cycle, was less interested in the financial circulation of money.
Style also came into it: Behind these discrepancies too were wholly different approaches to economic dynamics. For Kalecki economic dynamics meant the business cycle, in which the circular flow of income generates cumulative changes from one time period to the next.
He had a practical knowledge of statistics, rather than the firm grasp of statistical theory that would have been necessary for this. For many years Kalecki had a huge following in Cambridge and Oxford, thanks to the efforts of his friend Joan Robinson. But he was unsuccessful in America, in large part because of the anti-Communist fervour of late s and early s: He was denounced in the US Senate as a Communist sympathiser.
Kalecki was not a Communist. But he hated capitalism for the misery that it created and he thought that socialism would avoid this. Politically, therefore, he has not been in tune with the rightward drift of political economy since the s. Moreover, unlike Keynes, and even his own friend the Polish Marxist Oskar Lange, Kalecki was not interested in any aspect of economics that did not have a bearing on the problem of how explain and model the business cycle.
So he did not really engage with the ideas of other economists, or the history of economic thought, beyond what he could use for his own analysis. There are two ways in which his work addresses our current situation and concerns.
Jan Toporowski | Levy Economics Institute
First of all he stands out for his insistence that, in a capitalist economy, it is capitalist firms that determine the character and dynamics of the system, toporwoski lesser possibilities available to governments and households than is attributed to them by most current economic theory. Most contemporary economic theory tells us that the key economic decisions are made by households rather than firms and this is quite patently untrue. The kind of analysis of the firm that he gave us can give much improved insights into our current predicaments: Secondly, Kalecki understood that business investment is the only effective way in which debt problems can be overcome in an indebted capitalist economy.
The difficulty is that there is no mechanism in a capitalist economy to ensure that sufficient business investment is forthcoming to topotowski all the debts in an economy to be serviced Minsky came to much the same conclusion in his analysisjust as there is no mechanism to ensure that there is sufficient business investment to generate full employment.
The notion that price or wage flexibility can secure full employment is even less relevant in an indebted capitalist economy.
First of all we are supposed to train economists who will work in business and government, where their supervisors have expectations that their new staff will be familiar with certain ideas and not challenge them with new ones.
Secondly, most core teaching in economics is from textbooks that trivialise economics and serve up tiporowski our students stews into which bleeding chunks, hacked from the serious theoretical constructions of our great economists, have been thrown with little regard for consistency or significance.
Academic economics is further rendered insubstantial by the undue pressure on academics to publish in particular journals favouring trivial technical solutions to puzzles of dubious significance.
I wonder if Kalecki would have been such a great economist if he had been at university. It was only during the last thirteen years of his life that he worked in a university and even then this was on sufferance on the part of the university, since he had no university degree. So much of his most original ideas came from thinking toporowwski the practical knowledge that he acquired as an engineer, as a business journalist, credit investigator, and an avid follower of business practices.
Very few academics have that kind of background or experience. Moreover he knew toporoowski he was unusual among academics in this regard, and this gave him an unusually critical, even contemptuous, attitude towards academic research that dealt with abstract theory rather than practical problems.
Following the crisis ofacademic economics is not short of critical, even contemptuous, attitudes among economists for those who do not adhere to their particular school of thought whether heterodox or mainstream. But too little of these attitudes are informed by the kind of hard practical knowledge that Kalecki had.
An Intellectual Biography, Volume 1: Rendezvous in CambridgePalgrave Macmillan, July You may use these HTML tags and attributes: Leave this field empty. What made you choose to write topkrowski biography of Michal Kalecki? Toporowdki do you see as his main contributions to economics? Did his background influence the development of these toporowskj How did his work fit with that of Keynes?
Why has he been largely unrecognised for so long? How might he be relevant today? Recent comments on articles.