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The Revival of Classical Political Economy and the Cambridge Tradition: From Scarcity Theory to Surplus Theory


  • Nuno Martins


Hilary Putnam and Vivian Walsh argue that Amartya Sen's contribution can, like the writings of Piero Sraffa, be best interpreted as a revival of classical political economy, in which Sen brings back into economics a richer conception of the human agent, and a moral dimension. Sen criticises the conception of rationality that underpins mainstream microeconomic theory, and suggests an alternative framework that can accommodate a variety of motivations, including moral motivations, as will be argued here. Furthermore, the work of Sen, and other authors of the Cambridge tradition who also devoted much time to the revival of classical political economy, are complementary in many respects, and provide the basic tools for an alternative economic theory, which is centred on the economic, social and ethical analysis of the production and distribution of the economic surplus, and not on the modelling of the activity of optimising agents in a context of scarcity. While the notion of scarcity is very important for the analysis of poverty and deprivation that Sen undertakes, the central issue to address, in order to explain the causal mechanisms behind scarcity, poverty and deprivation, concerns the study of the production and distribution of the economic surplus.

Suggested Citation

  • Nuno Martins, 2011. "The Revival of Classical Political Economy and the Cambridge Tradition: From Scarcity Theory to Surplus Theory," Review of Political Economy, Taylor & Francis Journals, vol. 23(1), pages 111-131.
  • Handle: RePEc:taf:revpoe:v:23:y:2011:i:1:p:111-131 DOI: 10.1080/09538259.2010.510319

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    References listed on IDEAS

    1. Carl Chiarella & Roberto Dieci & Xue-Zhong He, 2008. "Heterogeneity, Market Mechanisms, and Asset Price Dynamics," Research Paper Series 231, Quantitative Finance Research Centre, University of Technology, Sydney.
    2. Thomas I. Palley, 1994. "Debt, Aggregate Demand, and The Business Cycle: an Analysis in the Spirit of Kaldor and Minsky," Journal of Post Keynesian Economics, Taylor & Francis Journals, vol. 16(3), pages 371-390, March.
    3. Charles Whalen, 2008. "Understanding the Credit Crunch as a Minsky Moment," Challenge, Taylor & Francis Journals, vol. 51(1), pages 91-109.
    4. Philip Arestis, 2002. "Financial crisis in Southeast Asia: dispelling illusion the Minskyan way," Cambridge Journal of Economics, Oxford University Press, vol. 26(2), pages 237-260, March.
    5. Jan Kregel, 2008. "Minsky’s Cushions of Safety: Systemic Risk and the Crisis in the U.S. Subprime Mortgage Market," Economics Public Policy Brief Archive ppb_93, Levy Economics Institute.
    6. Claude Gnos & Louis-Philippe Rochon, 2011. "Credit, Money and Macroeconomic Policy. A Post Keynesian Approach," Post-Print halshs-01231787, HAL.
    7. Vercelli,Allessandro, 1991. "Methodological Foundations of Macroeconomics," Cambridge Books, Cambridge University Press, number 9780521392945, March.
    8. Jan Toporowski, 2008. "Minsky's 'induced investment and business cycles'," Cambridge Journal of Economics, Oxford University Press, vol. 32(5), pages 725-737, September.
    9. Sordi, Serena & Vercelli, Alessandro, 2006. "Financial fragility and economic fluctuations," Journal of Economic Behavior & Organization, Elsevier, vol. 61(4), pages 543-561, December.
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    Cited by:

    1. Ben Fine, 2013. "Economics - Unfit for purpose: The Director's Cut," Working Papers 176, Department of Economics, SOAS, University of London, UK.
    2. Timothy C. Johnson, 2013. "Reciprocity as the foundation of Financial Economics," Papers 1310.2798,
    3. Maria Tyshchenko, 2014. "Methodological Problems Of Modern Political Economy Subject," Equilibrium. Quarterly Journal of Economics and Economic Policy, Institute of Economic Research, vol. 9(4), pages 103-110, December.

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