In his 2019 paper (Wright, 2019) Ian Wright shows that labour value theory is a positive theory that applies to the price structure of a capitalist economy. His demonstration is based on a generalization of Pasinetti’s vertically integrated approach (Pasinetti, 1988). The aim of this note is to prove that similar results can be obtained in the context of the simpler and more direct input-output analysis of the Leontief-Sraffa type. The analysis is not based on the Marxian categories but on the idea that the condition of reproducibility of an economic system requires, as a necessary condition, that the income generated in the production activity be completely spent on the purchase of produced com-modities. The relationship between the ‘new’ values, which are thus determined, and the ‘classical’ ones can be easily identified and examined.
This note focuses on two works by Luigi Pasinetti, published respectively in 1995 and 1998, concerning public deficit and debt. It highlights the Keynesian framework that characterizes the first essay, in which the implications of deficit-financed public spending are examined in relation to the role of the latter as a component of aggregate demand and the resulting effects on income levels. The 1998 article, which is devoted to a critique of the deficit and public debt limits set by the EMU rules, is discussed in terms of its underlying assumptions, with particular attention to those concerning the rate of GDP growth. Noting that in this work the author does not refer to any specific theoretical framework, the possibility is suggested of formulating a more radical critique within an approach that recognizes the contribution of public spending to aggregate demand, including its effects on growth.
The paper comments on the key role of structural interdependencies among productive sectors in Pasinetti’s economic theory, stressing how the variations in the composition of macro-aggregates, such as the income shares earned by different social groups, determine macroeconomic dynamics, growth, and development. Furthermore, it stresses how this stage of pure theory enables the identification of the conditions under which full employment and utilization of productive capacity can be guaranteed over time. The paper also highlights Pasinetti’s fundamental contribution to the characterization of the methodological features of the Classical-Keynesian School in contrast to the mainstream paradigm, providing a critical assessment of such features. Finally, it emphasizes the “strong, deeply felt social concern” that pervades Pasinetti’s economic analysis, which has been systematically imbued with a deep sense of the social implications of economic theory on civil society.
This paper celebrates the intellectual legacy of Pasinetti, firstly sharing some personal reflections of one of the authors of this paper and secondly presenting a bibliometric analysis that compares one of his most significant works – the 1981 volume “Structural Change and Economic Growth” with Nelson and Winter’s “An Evolutionary Theory of Economic Change”. Using both statistical indices and social network analysis methods, this study proposes an additional hypothesis to explain the substantial influence of Pasinetti’s work, which “failed to achieve wide acceptance”. By examining a selection of papers citing these two foundational volumes and analysing the resulting networks of scientific collaboration among their authors, this study suggests that Pasinetti’s limited diffusion in the economic literature – despite his many significant theoretical contributions – may be partially attributable to the limited presence of co-authored work in his body of research and a similar collaboration pattern among scholars citing his works.
All along his intellectual life, Luigi Pasinetti promoted a style of economic theorizing free of institutional content, at least at the stage of the “pure” theory, possibly incorporating some institutional content at a second stage of the analysis. In 2007 this conviction took the definitive form of a “separation theorem” (about the necessity of keeping rigorously separated the two steps of economic analysis) which raised a number of criticisms. In this short note I argue that this separation encounters some difficulties due to the nature of economic models, consisting of a pure mathematical structure accompanied by a set of interpretative assumptions through which some institutional content an creep into, implicitly and sometimes even inadvertently, more often than not. However, these difficulties notwithstanding, Pasinetti firmly maintained his position because he regarded the role of economic theory as that of discovering fundamental relations produced by immutable forces which human beings cannot escape.
Building on Keynes, Pasinetti develops a dynamic economic theory grounded in normative goals such as full employment, universal access to goods, and distributive justice. His approach recognizes the importance of institutions that go beyond market self-regulation, seeking creative ways to balance efficiency with solidarity. Influenced by a personalist philosophy, Pasinetti argues that labor should not be treated as a mere commodity but rewarded according to each individual’s contribution to the national product – conceived as a common good. His paradigm integrates ethical insights, particularly from the Social Doctrine of the Catholic Church, to reinforce community-oriented economic relations. Pasinetti thus combines moral vision with scientific rigor, highlighting capitalism’s structural failure to generate equality and sustainable development on its own.
The paper illustrates and discusses two specific fundamental contributions of Pasinetti’s scientific endeavour. The first one deals with his thourough critique of the ontological and epistemological foundations of the neoclassical economic paradigm. The second one refers to Pasinetti’s refusal of the NOMA principle and the ensuing “great separation thesis” between economics and ethics. Whence the demonstration that the distinction between positive and normative analysis is self-contradictory. The paper ends up with some recollections of the generative scientific dialogue between the Master and the present Author.
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