Imperfectionism in Macroeconomics: New Light on an Old Controversy

Abstract

The issues at stake in recent debates about ‘imperfectionism’ in macroeconomic theory are strikingly similar to questions raised in the revisionist controversy in German Marxism in the later 1890s and beyond. Orthodox Marxists claimed that the law of value could operate effectively only under free competition, while their revisionist critics countered that the growth of monopoly would improve coordination between different sectors of the economy and reduce the severity of crises. Some strange and unwitting intellectual alliances can be identified. New Keynesian thinking shows clear affinities with orthodox Marxism, while Post Keynesian ideas on this question resemble closely those of the revisionists.