1st Edition

Post-Keynesian Theories of the Firm Kalecki and Radical Uncertainty

By Nobantu Mbeki Copyright 2023
    426 Pages 7 B/W Illustrations
    by Routledge

    Within Post-Keynesian economics there is a spectrum of approaches to theories of the firm but what they have in common, to their great benefit, is a proper integration of the concept of radical uncertainty: data that cannot be known. This book revisits Kalecki’s theory of the firm is located to show that it constitutes fertile theoretical ground on which to systematically understand the resultant indeterminacy when firms operate under conditions of radical uncertainty. The author proposes a way of generalising radical uncertainty by integrating some of the separate approaches within Post-Keynesian economics centred around Kalecki’s work. Through this, it is shown that radical uncertainty does more than just change the ultimate motivation of firms (dropping short-run profit maximisation; more complex motivation; interconnectivity with the environment), it is central to the emergence, existence and motivation of firms, and critically also firm strategy. It is argued that firms do not simply respond to uncertainty: it is the systematic cause of their intentional behaviour. Through developing these arguments, the book also contributes to the methodology of Kalecki and Shackle, as well as Kaleckian price theory. This book will be important reading for anyone interested in theories of the firm, Post-Keynesian economics and heterodox approaches to economics more broadly.

    Part I: Uncertainty 1. Beyond the risk-uncertainty dichotomy 2. A reconsideration of Davidson’s taxonomy of uncertainty 3. Reclassifying theories of risk and uncertainty Part II: Pricing Theory 4. Post Keynesian pricing theory 5. Interdependence, dynamics and post Keynesian pricing 6. Radical uncertainty and the limits of mark-up pricing 7. Existing elements towards a theory of the firm Part III: Extending the Theory of the Firm 8. Mark-up pricing and radical uncertainty 9. From the outside in or inside out? Between firm and industry 10. The nature of competition 11. Pricing and accumulation Part IV: Further Themes in Microeconomic Theory 12. A proposed methodology for working with indeterminacy 13. Resituating the Kaleckian firm within the evolving post Keynesian theory of the firm 14. Old and new tensions and new directions


    Nobantu Mbeki, Lecturer in Economics, School of Economics and Finance, University of the Witwatersrand, South Africa