Pasinetti’s critique to post-war neoclassical growth theories

FLORENCIA SEMBER

Palermo

Congreso; II Conference AISPE-SISE; 2023

Associazione Italiana di Storia del Pensiero Economico e Università di Palermo

Luigi Pasinetti's works cover a wide range of topics, such as economic growth, income distribution, structural change and international economic relations1. In particular, he was a great critic of neoclassical economics, which led him to build an alternative system to understand the main problems of industrial economies. This process of criticism of neoclassical economics, simultaneously with his own alternative theoretical construction, led him to his proposal of a dynamic model for an industrial economic system in his StructuralChange and Economic Growth of 1981 (Pasinetti 1981). Pasinetti's explanation allows him to explain some statistical regularities regarding growth and technological change that neoclassical economics could not account for.The aim of this work is to explore Pasinetti’s critiques of neoclassical theories of growth and technical change in the second half of the XIXth century. In this period, growth theories take two different paths. One the one side, the theories of classical or Keynesian inspiration and on the other side the theories inspired in the marginal principle.In the first place, we present the Solow-Pasinetti debate on the measurement of productivity, since in this discussion we find a first outline of what will later be his greatest criticisms of the neoclassical theories of growth and technological change. These will then be expanded and reformulated over the years, but in large part, the determinants of what would be a completely different vision, not only of the particular question of growth, but of the objectives of political economy in general, are already largely present.Then, we present the main points of disagreement of Luigi Pasinetti with neoclassical economics and their implications. We focus on the questions of the asymmetry of the factors of production, the debate over the importance or not of distinguishing, when discussing technical change, between movements along the production function and shifts in the production function and finally the difference between capital intensity and degree of mechanisation.