Anwar Shaikh | |
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| Born | (1945-10-22)October 22, 1945 (age 79)[1] |
| Academic background | |
| Alma mater | Stuyvesant High School Princeton University Columbia University |
| Doctoral advisor | Ronald Findlay |
| Academic work | |
| Discipline | Heterodox economics,Macroeconomics,Marxian economics,crisis theory |
| School or tradition | Classical economics,Marxian economics, radical political economy |
| Institutions | New School for Social Research |
| Website | |
Anwar M. Shaikh (Sindhi: انور شيخ) is aPakistani Americanheterodox economist in the tradition ofclassical political economy andMarxian economics.
He is Professor ofEconomics in the Graduate Faculty ofSocial and Political Science atThe New School for Social Research inNew York City, where he has taught since 1972.[2]
Shaikh was born inKarachi into a LiberalSindhi family in 1945. He traveled extensively at an early age and attended schools and lived for various lengths of time inAnkara,Washington, D.C.,New York City,Lagos,Kuala Lumpur, andKuwait.
He graduated fromStuyvesant High School inNew York City in 1961, received a B.S.E fromPrinceton University in 1965, worked for two years in Kuwait, and then returned to the United States to study atColumbia University, from which he received hisPh.D. in Economics in 1973. In 1972 he joined the Economics Department at the Graduate Faculty of theNew School for Social Research.
He taughtmathematics,physics andsocial sciences at theKuwait-American School inKuwait City in 1966–67 and worked as a teacher of social science andmathematics atHarlem Prep inHarlem, NY, while in graduate school.
His major political influences stem from the New Left, including thecivil rights movement andfeminist movement in the US, and national liberation movements abroad. He always foundneoclassical economics unpersuasive, and the quest for more solid foundations led him to the works ofJohn Maynard Keynes,Roy Harrod,Wassily Leontief,Michał Kalecki,Joan Robinson,Piero Sraffa andLuigi Pasinetti, and subsequently toAdam Smith,David Ricardo andKarl Marx. The quest for a modernpolitical economy of developed capitalism became a central theme of his subsequent work.[3]
Carrying onteaching andresearch that originated in the context ofNew Leftsocial movements, Shaikh'spolitical economy has focused on the laws of motion and empirical patterns ofindustrializedcapitalism, based on a theory ofcompetition independent ofneoclassical economics.
In specific fields, he has written on thelabor theory of value,production functions,international trade,neoliberalism, thewelfare state,economic growth,inflation, thefalling rate of profit,long waves,inequality on the world scale, and past and currentglobal economic crises.
In 2016, Shaikh publishedCapitalism: Competition, Conflict, Crisis.
Shaikh has argued in various publications that neither neoclassical economics nor the great bulk ofheterodox economics provides an adequate foundation for the analysis of developedcapitalism. The former is based on a vision of a perfect capitalism which is claimed to optimally and efficiently serve the interests of all of its participants.
At the heart of this vision is the theory ofperfect competition. Much ofheterodox economics is in turn based on the theory ofimperfect competition, i.e., on departures from perfect competition. But the theory of imperfect competition is intrinsically dependent on the theory of perfect competition. Shaikh argues that evenneo-Ricardian economics, whose revival was sparked bySraffa's classic work, relies heavily on the neoclassical concepts of perfect competition and of equilibrium as an attained-and-held state.
In place of these notions, Shaikh proposes the theory of "real competition" and the theory of turbulent regulation.[4] Real competition is competition-as-war, with individual firms seeking to undermine each other by lowering costs and cutting prices. Turbulent regulation is the resulting process of perpetual overshooting and undershooting of actual economic variables (such as prices, wages and profit rates) around their ever-moving centers of gravity. Capitalist competition tends to form a "leading (regulating) producer-capital" which "establish the lowest unit cost-price of production at which other firms-prices will gravitate".[4]
Shaikh has utilized this framework to develop alternate theories of industrial, financial and international competition (the latter rejecting the standard theory of comparative costs). The key element in all cases is the turbulent equalization of profit rates in various spheres of investment. He uses his theoretical structures to explain the actual patterns of industrial prices,profit rates,stock market prices, andexchange rates in thedeveloped world.
The second strand of Shaikh's work concerns macrodynamics. Once again, the profit rate is the key variable. He argues that capitalist growth is driven by profitability, not by the requirements offull employment as in neoclassical theory, byexogenous demand as inKeynesian theory, or by the savings rate as inHarrodian theory. For Shaikh, profits regulates supply and demand and not the other way around; and "could even determine the degree ofstate intervention".[4]
In his earlier work, he used this notion to develop a theory oflong waves and crises based on theMarxian concept offalling rate of profit. Subsequently, he showed that the link between growth and the profit rate can also provide an alternate theory of inflation, which he showed to work very well for the US in the postwar period.
In more recent work, he has developed a formal classical profit-driven model of growth and contrasted its structure and its policy implications to those of the standard models in the other traditions.
A third strand of his work is the relation between theoretical categories and empirical measures. His 1994 bookMeasuring the Wealth of Nations: The Political Economy of National Accounts, co-authored with Ahmet Tonak, developed a mapping between thenational accounts corresponding to neoclassical and Keynesian concepts and those corresponding to classical and Marxian ones. It is now a classic reference on the subject.
More recently, he has argued that it is crucially important to distinguish between the average rate of profit on all capital invested, which includes old and new investments, and the rate of return on new investment alone. It is only the latter, he argues, which is turbulently equalized among alternative uses of capital. He showed that one can approximate the rate of return on new investment via the incremental rate of profit.
Using this, he demonstrated that, contrary to the "irrational exuberance" claim ofRobert Shiller, the rate of return in the stock market does indeed oscillate around the incremental rate of return in the corporate sector. In more recent work, he demonstrates that the same turbulent equalization holds for manufacturing sectors within the US and even acrossOECD countries.
The final strand of his work is a critique of the neoclassicalaggregate production function and its associated marginal-productivity theory of income distribution, dating back to his earliest work 'Laws of Production and Laws of Algebra: The Humbug Production Function' (1974).[5] This was a stinging critique ofRobert Solow's famous article on the measurement of technical change,[6] following up on a similar criticism of cross-section production functions bySimon andLevy (1963).[7]
To combat the notion that production functions, if not theoretically sound, are at least empirically well-supported, Shaikh fitted a function to a set of data points that spell out "HUMBUG" when plotted, then showed that the result was a proper production function.
The Simon-Shaikh critique of production functions was taken up by Jesus Felipe, J. S. L. McCombie and others in a series of articles over the years. Further articles by Shaikh in this vein appeared in 1980, 1986, and 2005, the last being in a special journal issue devoted to the subject that included contributions by Felipe, McCombie, andFranklin M. Fisher. Expressing the importance of Shaikh's result, J. E. King remarked that "[i]f there was any justice in the world of economics," Shaikh should have gotten theNobel Memorial Prize for the humbug production function.[8]
Shaikh's 2016 bookCapitalism: Competition, Conflict, Crisis[9][10] is a graduate-level textbook that attempts to revitalize classicalpolitical economy, by deriving theoretical and empirical results from classical assumptions. It synthesizes much of his earlier work into a comprehensive theory ofmicro- andmacroeconomics, while critiquing both mainstreamneoclassical economics andpost-Keynesian alternatives.
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