PhD Lecture Series in Selected Topics
Post-Keynesian, institutionalist, feminist and Marxian political economy
2016 Session
6 April: Kingston University
1. Probabilistic political economy: Marx, econophysics and complexity
Dr Julian Wells, Kingston University:
Current mainstream economics has two core ontological commitments and two methodological ones.
The ontological commitments are general equilibrium and the efficacy of market economies, and the
methodological ones are that agents are rational maximisers and a single representative agent suffices
for building useful models.
Econophysics, and the related field of complexity theory, subvert the first and last of these, and as a
result are associated with heterodoxy. However, heterodoxy has ambiguous connotations in relation
to economic theory. On the one hand it simply means that the ideas in question have not yet become
orthodox, not yet been absorbed into the mainstream. On the other, it suggests an aura of social and
political critique, with the insinuation that orthodox theory is part of an ideological defence of the
status quo.
While the first of these meanings is certainly the case for these two fields, this is not — as such — a
reason to suppose that they may not become so absorbed. Nor is there any evidence that their bestknown exponents have any particular agenda beyond amelioration of the current social and economic
system. Moreover, almost any idea can be vulgarised so as to be consistent with acceptance of
capitalist order.
Thus the extent to which econophysics and complexity are essentially heterodox in the second sense
is an open question, to which the final answer must be given by history. Pending that judgement, this
lecture will demonstrate that Marx, and marxists, are precursors and pioneers of econophysics and
complexity.
Core reading (in the order given here)
Wells, Julian (2013) ‘Of Fat Cats and Fat Tails: From the Financial Crisis to the “New” Probabilistic
Marxism’, Research in Political Economy, 28, pp. 197–228.
Wright, Ian (2005) ‘The Social Architecture of Capitalism’, Physica A: Statistical Mechanics and its
Applications, 346, pp. 589–620.
Farjoun, Emmanuel, and Moshé Machover (1983) Laws of Chaos: a Probabilistic Approach to Political
Economy, Verso: London.
Cottrell, Allin F., Paul Cockshott, Gregory J. Michaelson, Ian P. Wright, and Victor Yakovenko (2009)
Classical Econophysics, Routledge: Abingdon.
Beinhocker, Eric D. (2007) The Origin of Wealth: Evolution, Complexity, and the Radical Remaking of
Economics, Random House Business: London.
Optional reading
Axtell, Robert (2005) ‘The Complexity of Change’, The Economic Journal, 115, pp. F193–F210. June.
Gallegati, Mauro, Steve Keen, Thomas Lux, Paul Ormerod (2006) ‘Worrying Trends in Econophysics’,
Physica A: Statistical Mechanics and its Applications, 370 (2006), pp. 1–6.
McCauley, J. L. (2006) ‘Response to “worrying trends in econophysics”’, Physica A: Statistical
Mechanics and its Applications, 371 (2006), pp. 601 – 609.
Mantegna, R.N. & Stanley, H.E., 2000. An introduction to econophysics: correlations and complexity
in finance, Cambridge: Cambridge University Press.
Wells, Julian (2007) ‘The Rate of Profit as a Random Variable’, PhD thesis, The Open University.
2. The Early History of Circular Flow Models
Dr Richard van Den Berg, Kingston University
The conception of the economy as a single but complex set of repeated exchanges of
products, money and income payments is fundamental to most modern economic theories,
even if it is modelled differently in the context of, for example, IO theories, Keynesian
macroeconomics, or Marxian reproduction models. The earliest attempts at formal analysis
of the economic process as a single circular flow date from the 18 th century. In this session
we look at the contributions of three pioneers, Richard Cantillon (1680s-1734?), François
Quesnay (1694-1774) and Achilles Nicolas Isnard (1748-1803). A comparison of the content
and functions of their respective circular flow models shows the flexible character that this
fundamental construct had and continues to have.
Readings
Brewer, A. 2005. ‘Cantillon, Quesnay and the Tableau Economique’, Bristol University
Discussion Paper No. 05/577
Cantillon, R. [early 1730s] 2015. Richard Cantillon’s Essay on the Nature of Trade in General.
A Variorum edition. Edited by Richard van den Berg. London and New York: Routledge, pp.
238-251.
Isnard, A.N. [1781] 2006. At the Origins of Mathematical Economics. The Economics of A.N.
Isnard (1748-1803). Ed. Richard van den Berg. London and New York: Routledge, pp. 116-125.
Quesnay, F. [1766] 1993. ‘The Analysis’, in R.L. Meek The Economics of Physiocracy. Reprint
Fairfield N.J: A.M. Kelley publishers, pp. 150-167.
Steenge, A.E. and van den Berg, R. 2001.‘Generalising the Tableau Economique; Isnard’s
Systeme des richesses’, International Journal of Applied Economics and Econometrics, 9, 2,
121-146.