Question & Answer.

A few days ago Nigel O. left the following comment:

"Okay, you say Post-Keynesians don't have a theory of price.

Why should anyone care about a theory of prices? Or a theory of value, for that matter?"

Before going into the substance of your question, Nigel, one detail: it's not I who says post Keynesians have no price theory, it's Prof. Lee. Neither Shapiro, nor Sawyer disputed that. Now, one could reasonably object that I am prejudiced against post Keynesianism (I am, indeed, opposed); that objection, however, seems less reasonable after post Keynesians admit the fact.

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I'll try to answer your questions with three examples. Hopefully they will be as close to your experience as they are to mine. Soon enough -- I trust -- you'll see where I'm heading with this.

Scenario one. You are paid hourly wages and this week you worked X hours. Suppose you received your payslip. Wouldn't you compare the figures the payslip reports and the figures you yourself have?

Second scenario. Imagine that one of your duties is to receive the goods delivered to your employer. The list you have in your hands says you are expecting Y boxes of Blue Super Duper WidgetsV2.0. Wouldn't you make sure that item was actually delivered?

Third scenario. You and Big Bob are partners in a small business. Come the end of the financial year and BB hands you a cheque for your share in the business' profits: Z dollars. Wouldn't you want to see the accounting books?

In all those cases, it's reasonable to be interested in the outcome. It's not idle curiosity, it's not even academic or scientific curiosity; it's a matter of your livelihood. Those three quantities (X, Y, Z) matter. People don't just accept what they are being handed: they need to know why they get what they get. In fact, you would expect equal interest from the other party, should your positions be reversed: it stands to reason.

What's unreasonable -- in a capitalist society, with its self-interest ethos! -- is to pretend that kind of interest is not justified: "Of the tendencies that are harmful to sound economics, the most seductive, and in my opinion the most poisonous, is to focus on questions of distribution." (Robert Lucas)

Things start to smell fishy when the other side tries to convince you that checking your outcomes is silly ("Nonsense. That's peanuts, and I have no time for it. I'm concerned with more important things"). This, at a larger scale, is what post Keynesians do: just replace "peanuts" for "metaphysical", or "ideology". On this you see post Keynesians holding hands with their alleged arch-opponents, the nefarious neoclassicals: "One of the great metaphysical ideas in economics is expressed by the word 'value'." (Joan Robinson).

Their lacking a theory of prices is a symptom of their visceral hostility to a theory of value.

Things don't improve any when the other party -- after acknowledging your interest -- makes up magical explanations ("The wage is equal to the marginal product of labour"). This, also at a larger scale, is what neoclassical economists -- including Keynes -- have: a theory of value based on unmeasurable, invisible, immaterial things and whose main beneficiaries -- by sheer coincidence, obviously -- are themselves and their rich mates.

And if the other side, on top, ridicules or demonises you or those who insist you better take your outcomes seriously, then you can bet your sweet ass you are being taken for a fool or for a ride.

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Hope this answers your questions. :-)