> But in mainstream history of economic
> thought, the 'neo-classical synthesis' is, well, a synthesis of some
> of
> Keynes with a pre-existing neo-classical tradition going back to
> Marshall,
> Walras, etc. - i.e. the marginalists. Which is exactly what Harvey
> means by
> 'neo-classical'.
Keynes ditched the Benthamite utilitarianism underpinning Marshall's "marginalism". This, like the role Keynes assigns to irrationality elaborated as psychopathology, is ignored by adherents, such as DeLong, of the "neo-classical synthesis". Ironically, it's also, like the role of irrationality, ignored by many Post Keynesians who interpret Keynes as a "rational choice" theorist.
Keynes did appropriate, however, another essential aspect of Marshall's economics, one inconsistent with "marginalism". This aspect derives from German idealism (Kant and Hegel), a connection pointed to by Keynes himself in his biographical essay on Marshall (Keynes, Collected Writings, vol. X, p.172). It constitutes what Keynes calls the "profundity" of Marshall's approach to economics.
That aspect is the social ontological form of the premise of “organic unity” ("man is largely a creature of circumstances and changes with them"). In his essay, Keynes points to this as the basis of the distinction Marshall drew "between the objects and methods of the mathematical sciences and those of the social sciences" (p. 197) and as constituting "the profundity of his [Marshall's] insight into the true character of his subject in its highest and most useful developments.” (p. 188) In support of the interpretive claim, he quotes Marshall making a criticism, on this basis, of "classical" political economy very similar to Marx's in the Grundrisse (<http://www.marxists.org/archive/marx/works/1857/grundrisse/ch01.htm
>).
"The change that has been made in the point of view of Economics by the present generation is due to the discovery that man himself is in a great measure a creature of circumstances and changes with them. The chief fault in English economists at the beginning of the century was not that they ignored history and statistics, but that they regarded man as so to speak a constant quantity, and gave themselves little trouble to study his variations. They therefore attributed to the forces of supply and demand a much more mechanical and regular action than they actually have." (Marshall, as quoted by Keynes, p. 196)
In his Principles, Marshall extends this claim to “social science” in general: "the influence of circumstances in fashioning character is generally recognized as the dominant fact in social science." (Marshall, Principles, Variorum Ed., Vol. 1, p. 48) Also like Marx, he points to "the prevalent methods of the production, distribution and consumption of wealth" as the most important of these circumstances. He explicitly points to the implications of this for "the laws of the science", implications severely limiting the applicability of axiomatic deductive reasoning to the "long run" (implications that Marx's deduction of the "absolute general law of capitalist accumulation" and Harvey's appropriation of it ignore).
"For the sake of simplicity of argument, Ricardo and his followers often spoke as though they regarded man as a constant quantity, and they never gave themselves enough trouble to study his variations. The people whom they knew most intimately were city men; and they sometimes expressed themselves so carelessly as almost to imply that other Englishmen were very much like those whom they knew in the city. ... As the [19th] century wore on ... people were getting clearer ideas as to the nature of organic growth. They were learning that if the subject-matter of a science passes through different stages of development, the laws which apply to one stage will seldom apply without modification to others; the laws of the science must have a development corresponding to that of the things of which they treat. The influence of this new notion gradually spread to the sciences which relate to man; and showed itself in the works of Goethe, Hegel, Comte and others. ... Economics has shared in the general movement; and is getting to pay every year a greater attention to the pliability of human nature, and to the way in which the character of man affects and is affected by the prevalent methods of the production, distribution and consumption of wealth." (pp. 762-4)
In his biographical essay on Edgeworth, Keynes points to the inconsistency of this idea of "organic unity" - of "internal relations" - with "marginalism", i.e. with "mathematical psychics" constructed on the foundation of Benthamite utilitarianism. This is one of the reasons he gives for rejecting the attempt to found economics on the latter. In the essay, he says of Edgeworth's Mathematical Psychics and other such attempts:
“Mathematical Psychics has not, as a science or a study, fulfilled its early promise. In the ‘seventies and ‘eighties of the last century it was reasonable, I think, to suppose that it held great prospects. When the young Edgeworth chose it, he may have looked to find secrets as wonderful as those which the physicists have found since those days. But, as I remarked in writing about Alfred Marshall’s gradual change of attitude towards mathmatico-economics (pp. 186-7 above), this has not happened, but quite the opposite. The atomic hypothesis which has worked so splendidly in physics breaks down in psychics. We are faced at every turn with the problems of organic unity, of discreteness, of discontinuity - the whole is not equal to the sum of the parts, comparisons of quantity fail us, small changes produce large effects, the assumptions of a uniform and homogeneous continuum are not satisfied.” (Collected Writings, vol. X, p. 262)
Ted