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Interpretation by J. Hicks of the theory of J. Keynes

In 1937, an article by J. Hicks (1904-1989) Mr. Keynes and the Classics appeared. An attempt at interpretation where Hicks proposed mathematical expression and a graphic illustration of Keynes's concept. Hicks presented Keynes's model as follows:

M – mass of money, L – liquidity function or money demand function, I – investment function, S – savings function, Y – income, i – interest rate.

Equation (1) determines the geometric location of points (Y, i) for which this equation is true for a certain given value of the mass of money (M); this locus of points can be graphically represented as an LM curve. Its form is determined by the fact that an increase in income leads to an increase in the demand for money, and an increase in interest leads to its decrease, but at the same time there is a certain value below which the interest rate cannot fall at any level of M. This is a situation of complete liquidity traps. Equation (2) specifies the IS curve - the locus of the points (Y, i) at which the corresponding equality of the volumes of investment and savings is satisfied, and the marginal efficiency of capital and the value of the multiplier are given in this case. These two curves IS and LM, forming the famous Hicks cross, intersecting determine the equilibrium values of i and Y, and therefore the level of employment. If there is an increase in the supply of money (the LM curve moves to the right), the interest rate will decrease and income will increase. Income growth can also occur as a result of an increase in the marginal efficiency of capital, but in this case interest will rise. When the economy is in a situation close to a liquidity trap (i.e., the left side of the LM curve is parallel to OY), increasing the supply of money will not help significantly affect the percentage - the LM curve shifts to the right, but its left part remains practically unchanged. Monetary policy is ineffective. If in such a situation the marginal efficiency of capital increases, and the value of the multiplier does not decrease (the IS curve shifts to the right), there is an increase in income, and therefore employment, and not interest. If, on the contrary, marginal efficiency falls and there is no compensating increase in the multiplier (the IS curve shifts to the left), then income and, consequently, employment decreases. Thus, the equilibrium of regulatory instruments (i and Y) in the goods and money markets is formed interconnectedly and simultaneously . Hicks pays much attention to the investment multiplier, the preference for liquidity and inflation, and their place in the theory of economic dynamics and in the theory of cycles. His works are devoted, in particular, to these problems. Cost and capital(1939), Contributions to trade cycle theory(1950). In Contributions to Trade Cycle Theory, Hicks distinguishes between free and forced cycles. The free cycle fades on its own due to the low level of autonomous investment and a weak multiplier. The above cycle, driven by powerful forces of expansion, is limited to the full use of production capacity and entails a delay in the growth of output, and this gives rise to a downward movement of the economy as a whole. Thus, he examines how the transition from one state of equilibrium to another occurs. Hicks identifies three stages in the movement of the economy: 1) increased demand without new capital investments due to the depletion of working capital; 2) making new investments to meet new demand; 3) the resulting series of oscillations. He considered the highest point of recovery to be the state of complete use of resources. Hicks's ideas became widespread and made it possible to talk about Hicksian Keynesianism.

HICKS, JOHN RICHARD(Hicks, John Richard) (1904–1989), English economist. Born in 1904 in Leamington, he studied at Oxford University and was a student of one of the leaders of the Fabian movement, J. Cole. From 1926 he taught at the London School of Economics. In 1972, together with K. Arrow, he was awarded the Nobel Prize in economic science for his contribution to the development of the theory of general equilibrium and welfare economics.

Hicks's range of scientific interests was quite wide, but his main attention was paid to the study of the fundamental problems of modern economic science - issues of cost, supply and demand, price, wages, capital and profit, economic growth, cyclical development, inflation. Among his most famous works are Wage theory (The Theory of Wages, 1932); Cost and capital (Value and Capital. An Inquiry into Some Fundamental Principles of Economic Theory, 1939); Contributions to trade cycle theory (A Contribution to the Theory of the Trade Cycle, 1950); Essays on the World Economy (Essays in World Economics, 1959); Critical Essays on Monetary Theory (Critical Essays on Monetary Theory, 1967); Theory of economic history (A Theory of Economic History, 1969); Crisis in the development of Keynesian economic theory (The Crisis in Keynesian Economics, 1975); Economic prospects. New essays on money and economic growth (Economic Perspectives. Further Essays on Money and Growth, 1977); Causality in economics (Causality in Economics, 1979). Job Cost and capital soon after its publication it was recognized as a classic by leading Western economists.

Hicks's first major work Wage theory– is devoted to the study of the functioning of the labor market and the mechanism for setting wages in conditions of imperfect competition. Here the scientist outlined his theory of industrial conflict, according to which the theory of wage setting is a special case of the general theory of value, and the main factor that disrupts the free interaction of market forces in the labor market are trade unions. Within the framework of this theory, Hicks tried to prove that wage rates are determined by the intersection of the “concession curve” of entrepreneurs and the “resistance curve” of trade unions, put forward the idea of the possibility of substituting labor with capital and the elasticity of such substitution, and defined the neutrality of technical progress, in which innovation does not lead to changing the proportions of product distribution between factors of production. Hicks's work had a significant influence on the subsequent development of production function theory and neoclassical theories of unemployment, in particular the theory of the natural rate of unemployment.

In Hicks's main work, the book Cost and capital– for the first time since A. Marshall, an attempt was made to consistently analyze the foundations of neoclassical theory. The book stands out for the breadth of problems considered and lays the foundations of modern microeconomic theory. The work outlines the foundations of the ordinalist theory of prices and develops the fundamental principles of the general theory of equilibrium. Hicks was the first to raise the question of the stability of competitive equilibrium in large economic systems and proved that many of the most important concepts of the Austrian subjective theory of value, such as the law of diminishing utility, the measurability of the absolute value of utility, etc., are in fact not related to fluctuations in demand and offers on the market.

Hicks made a significant contribution to the theory of cyclic development. The scientist abandoned the psychological concepts of the cycle of A. Pigou and other representatives of the Cambridge school and proposed a theoretical scheme of the cycle, in which he identified 4 main phases. In his interpretation, the cycle is a set of deviations from the equilibrium trajectory of economic development.

Hicks's concept of inflation is most fully expounded in Essays on the World Economy and comes down to the introduction of the concept of “labor standard” and the thesis of the “wages-prices” spiral.

In the 1970s, Hicks devoted much attention to the development of methodological problems in the development of economic theory and the revision of Keynesian economic theory. In several later works, most notably The crisis in the development of Keynesian theory, he clarified and supplemented Keynes’s constructions and statements, abandoned a number of important provisions of his theory and tried to adapt Keynes’ theory to modern conditions, becoming the founder of “Hicksian Keynesianism.”

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MINISTRY OF EDUCATION AND SCIENCE OF THE RUSSIAN FEDERATION

FEDERAL STATE BUDGET EDUCATIONAL INSTITUTION OF HIGHER PROFESSIONAL EDUCATION

"STATE UNIVERSITY-EDUCATIONAL-RESEARCH-PRODUCTION COMPLEX"

Department: “Public Administration and Finance”

Topic: “Nobel laureate in economics John Richard Hicks”

student: Zlotkin E. A.

Introduction

3. Nobel Prize

Conclusion

Introduction

General equilibrium theory has a wide range of applications, in particular, it is used in determining the scientific basis of policies in the field of welfare economics. Welfare economics is a field of economic theory that studies the social acceptability of alternative states of the economy. Welfare economics studies the methods of such organization economic activity, which would ensure the maximization of economic well-being. The problem of the well-being of society has been and is the central problem of any economic system. For many years, many scientists have tried to develop criteria for assessing economic efficiency that could be used in assessing the actual state of resources.

The first economists to study this problem interpreted utility as a measurable level of consumer satisfaction. Therefore, when determining changes in the economic well-being of society, they relied on changes in the structure of economic activity. Modern social welfare theory cannot be imagined without John Richard Hicks.

1. Biography of John Richard Hicks

English economist John Richard Hicks was born in Warwick, near Birmingham. His father, Erward Hicks, was a journalist for a local newspaper. At school and during his first year at Clifton College, Oxford, where X. entered in 1917, he specialized in mathematics. From 1922 to 1926 he continued his studies at Balliol College. Also interested in literature and history, X. moved in 1923 to the newly opened School of Philosophy, Politics and Economics at Oxford, but his studies there were without much results. Hicks's academic success did not foretell his future achievements in the scientific field and, in his own opinion, frank confession, he graduated from the university "with a second-rate degree and without sufficient knowledge in any of the subjects studied."

Xix easily obtained a temporary lectureship at the London School of Economics (LSE). He began to specialize in labor economics and industrial relations analysis, but soon switched to economic theory, discovering that his mathematical training, by then fairly forgotten, could be useful. The greatest influence on the formation theoretical views Xix was influenced by the works of the creator mathematical method economic analysis and general equilibrium theory of L. Walras and his follower V. Pareto. While working on his first book, “The Theory of Wages” (1932), Xix, in his own words, had a vague idea of \u200b\u200bthe activities of J. M. Keynes and his group at Cambridge. It was only thanks to the discussion around F. von Hayek's book "Prices and Production", which took place at the LSE in 1931, that Xix turned to macroeconomic analysis.

In 1935, X. moved to the staff of Conville and Caius College, University of Cambridge. That same year he married Ursula Webb, an economist at the LSE; For many years, the Hicks spouses worked extensively and creatively together, mainly on economic policy issues. From 1939 to 1946, Xicks was professor of economics at the University of Manchester. There he did his main work in welfare economics. In 1946, X. returned to Oxford, first as a research fellow at Nuffield College. Since 1952 he has been Professor of Political Economy at Oxford University. He remained in this position until his retirement in 1965. During these years, X. carried out work in many areas of economic theory. He wrote on monetary theory, international trade, economic growth, cyclical fluctuations in the economy, and the problems of developing countries, some of which he visited with his wife, who specializes in this field.

Hicks's Theory of Wages (1932) was an attempt to apply the theory of marginal productivity to the analysis of wages. In addition, he brought into the study of this issue the so-called bargaining theory - a softened version of the theory of free competition. Using the "employer's concession" curve and the "union's demands" curve, X. determined the maximum wage that a union could achieve through skillful negotiation between the bargaining parties, arguing that the gain in any case would be negated, since in the end the principle would prevail ultimate performance. The central place in X.'s analysis is occupied by the thesis about the possibility of interchangeability of capital and labor.

He introduced into economic analysis the concept of “coefficient of interchangeability” (or “elasticity of substitution”) - an indicator that determines the relative ease of replacing one factor of production with another. To show the impact of technological change on wages, a rigorous analysis of the role of invention was undertaken. X. showed that if the coefficient of interchangeability (elasticity factor) is equal to zero, then this indicates the neutrality of inventions that do not change the shares of labor and capital. Labor-saving inventions reduce workers' share of income, which may increase in absolute terms. X. showed. that inventions that make it possible to reduce labor costs particularly sharply and are from this point of view the most profitable, can have a detrimental effect, since in this case there will be both a relative and an absolute reduction in the share of workers. X. was primarily interested in the influence of the relative change in the size of remuneration for each of the factors of production on the quantitative relationships between them in production. Thus, according to X., substitutability becomes significant as soon as a small drop in wages leads to a wider use of labor compared to capital. In this case, the share of the working class in national income increases. At the same time, X. implied conditions of free competition and a fairly quick reaction to changes in the market situation both on the part of labor and on the part of capital, which in itself is very problematic.

Between 1935 and 1938 X. wrote his most significant work, “Value and Capital”. Published in 1939, it was, in a sense, an attempt to develop the theory of general equilibrium of L. Walras and V. Pareto. The book is considered an early British version of Samuelson's Foundations of Economic Analysis. The starting point of X.'s theory was the idea of the subjective nature of value and needs. The initial chapters of the book substantiate what in modern economic theory is called the orthodox theory of behavior of consumers and producers. X. created a logical system rooted in the ideas of free competition in the 18th century. The theory of general equilibrium he created was generally static in nature, since it considered economic dynamics as a successive series of states of static equilibrium. In X.'s theory, the time factor was also absent, so economic dynamics in his analysis essentially remained unexplored.

2. Contribution to economic science

Xix researched various options equilibrium, reflecting the relationship between income levels and consumption structure. The “income-consumption” curve he constructed corresponded to real price relationships and made it possible to identify patterns of consumer reaction to changes in prices and income, as well as to analyze the behavior of the factor of interchangeability when the consumption structure changes.

Xicks proposed a graph on which, having drawn a utility surface, he plotted curves reflecting the consumer's reaction to two different goods. The graph was a system of indifference curves that reflected the polarity of various combinations of two goods. Each curve decreased as it moved to the right and was convex relative to the origin. Movement along the curve showed mutually compensating changes in the combination of goods. At the same time, it reflected the dynamics of the marginal utility of goods: a larger amount of a good corresponded to a lower marginal utility. By superimposing the price line on the graph, X. obtained the point of its contact with the indifference curve, reflecting the maximum utility under given conditions; movement from this point along the price line will lead the consumer to a lower indifference curve. An important place in the theory of X. was occupied by the position that an increasing quantity of one good compensates for the losses incurred by the consumer due to a decrease in the quantity of another good, and the marginal rate of interchangeability of two goods should be equal to the ratio of their prices, if we mean the establishment of equilibrium with consumer point of view.

Hicks's analysis laid the foundation for subsequent studies of the principle of interchangeability of goods in the study of the relationship between costs and benefits, although he was criticized by P. Samuelson and other economists for the purely formal nature of his calculations, which did not take into account problems of distribution, historical and cultural development of society, as well as various kind of irrational factors influencing the buyer's choice. However, X. remained true to himself and in his work “A Revision of Demand Theory” (1956) outlined an even more abstract version of the doctrine of consumer behavior.

Another contribution to economic science recorded in the book "Cost and Capital" was the analysis of the problem of economic sustainability within the framework of general equilibrium theory. He proceeded from the fact that the study of static equilibrium is the starting point for the study of imbalances generated by factors of economic dynamics. The instability of the economy, according to X., stems mainly from disturbances in the distribution of income and extreme complementarity of goods. X.'s theory of production covered four markets: goods, factors of production, services and semi-finished products. A market is considered stable if a decrease in price causes demand to exceed supply, even if the prices of all other goods adjust to this new price; market stability will be imperfect if excess demand for a given good is discovered only after the price of all other goods has changed.

Market stability assumed in X.'s theory the isolation of price from all forces operating in the market, and the only reason for the disruption of stability is the dynamics of income. X. proceeded from the assumption of perfect competition, arguing that ignoring the monopoly of government activity and abstracting from the impact of the interest rate does not significantly affect his theory. The conditions for a balanced state of the economy that he developed, despite their isolation from economic realities, were of undoubted value, which was confirmed by subsequent studies by J. Debreu and K. Arrow. One of the key concepts of the dynamic concept of X. - “temporary equilibrium” - is currently widely used in theoretical macroeconomics. X.'s place in modern economic theory is largely due to the methods of analysis he developed, for example, the use of comparative statics and the application of dynamic analysis to the study of economic growth and the trade cycle.

Somewhat later, Xix tried to create a model of a growing economy. This concept is based on the article "A "Value and Capital" Growth Model", published in the Review of Economic Studies in 1959. g., the ideas of the main work of X were laid.

Under the direct influence of the work of J. M. Keynes, “Treatise on Money,” X. turned to the analysis of money. His views in this area were outlined in a very relevant article at the time, “A Suggestion for Simplifying the Theory of Money.” It was published in early 1935 in the magazine "Economica". The main idea was the assertion that money is one of the possible forms of financial assets, and (in conditions, however, of stable prices) the most preferable form. He examined various forms of “holding” assets, finding out the conditions for the preference for cash over various types valuable papers. The main takeaway was that despite the zero interest rate, money is held in the form of cash because it is the only form of asset that can be used without diminution or loss of value (absent inflation) to make unexpected purchases.

If this article by Hicks has already been almost forgotten, then another, outlining his ideas in the field of monetary theory, is "Mr. Keynes and the Classics" ("Mr. Keynes and the Classics") - in the journal "Econometrics" ("Econometriс") for 1937, left a significant mark. In it, X. presented his famous diagram "Savings for investment - money market (SK-DR)", subsequently included in all textbooks macroeconomics.

Hicks's theory of money and deviation from the DR curve anticipated modern portfolio theories, which were later developed by J. Tobin. X. also showed that an independent increase in government spending will move the UK curve to the right, which means an increase in national income. In this case, the interest rate also increases, except when the DR curve is flat (these cases are known as the Keynesian “liquidity trap”). Based on the fact that it was the “liquidity trap” that characterized the state of money markets during the Great Depression, many Keynesians justified the need to use fiscal policy to stimulate aggregate demand.

Hicks's ideas were actively varied in Keynesian macroeconomics in the 50s and 60s, but Hicks himself did not take part in the controversy surrounding his contribution to the general theory of equilibrium. The debates of these decades in the field of economic policy, contrasting the effectiveness of monetary and fiscal means, were often conducted within the framework of the SC-DR diagram. However, in the early 70s. X's diagram was the subject of attack by a number of Keynesians, including R. Klauer, one of X's former students. X's opponents argued that the SC-DR curves distorted the essentially dynamic and unbalanced nature of J. M. Keynes's theory with their static and balanced character. In fact, X. showed in his theory of the trade cycle in 1950 the dynamic nature of short-term development, especially in relation to determining the size of investment. The SC-DR diagram, if used correctly, remains a fairly reliable tool. Economic historian P. Temin, for example, used it to show that the monetarist explanation of the causes of the Great Depression in the United States (a sharp drop in the supply of money) was refuted by empirical evidence - data on interest rates and national income.

In the 50-60s. Xicks, in a creative union with his wife, focused on the problems of applied economics. Xix's work includes works on international trade, British tax system, problems of developing countries. Continuing the work begun during World War II, X. and his wife, a specialist in the problems of developing countries, served as advisers to the British government on tax policy. They also assisted the official circles of some former members of the British Commonwealth, such as India and Jamaica, in resolving economic problems that arose after the independence of these countries. X. continued to intensively study issues of economic theory, although much of what he did after the work “Cost and Capital” has not yet been sufficiently comprehended. The book "Capital and Growth" (1965) used the concept of comparative dynamics to study stable and optimal paths of development. In this book, X. introduced into the analysis the concept of markets with “fixed” and “flexible” prices, the distinction between which has proven productive in modern macroeconomics.

In his work “A Theory of Economic History” (1969), X. applied his theory to the analysis of economic history, thereby offering a new perspective on economic reality. He drew attention, for example, to the sequence of events through which the spread of new technology led to economic growth. This idea was developed in the book “Capital and Time” (1973). The work “Causality in Economics” (1979) examined the sequence of economic processes, the difference between economic stocks and flows, and the problem of identifying the causal relationship between changes in economic development.

3. Nobel Prize

In 1972, Xicks shared the Alfred Nobel Prize in Economics with C. Arrow "for his pioneering contributions to general equilibrium theory and welfare theory." In his speech at the presentation of the laureates, member of the Royal Swedish Academy of Sciences R. Bentzel emphasized that the work “Cost and Capital” “inspired new life into the theory of general equilibrium,” and X.’s equilibrium model “gave a more specific character to the equations included in the system and made it possible to study the effects that arise within the system under the influence of impulses coming from outside.”

After his retirement in 1965, X. remained until 1971 as a research fellow at All Souls College, Oxford. He responded eagerly to everything new that appeared in economic science. IN last years life X. published the works “The Crisis in Keynesian Economics” (1974), “Economic Perspectives: Further Essays on Money and Growth”, 1977), “Wealth and Welfare” (1981), “Money, Interest, and Wages” (1982), “Classics and Moderns” (1983) , "Methods of Dynamic Economics", 1985.

Conclusion

economic nobel hicks development

Hicks's contribution to economics is difficult to assess. It remains to add that in addition to the Nobel Prize, X. was awarded many honorary scientific titles and awards. He was a member of the British Academy of Sciences, the Royal Swedish Academy of Sciences, the Italian National Academy of Sciences, the American Academy of Arts and Sciences, and honorary doctorates from several British universities (Glasgow, Manchester, Leicester, Warwick, etc.), as well as the Technical University of Lisbon. From 1960 to 1962 he was president of the Royal Economic Society, and in 1964 he was elevated to the rank of nobility.

Bibliography

1. http://ru.wikipedia.org/wiki/Nobel_prize

2. http://ru.wikipedia.org/wiki/Nobel_Prize_in_Economics

3. www.referat.ru

4. http://ru.wikipedia.org/wiki/Alfred_Nobel

5. “Nobel laureates” Gladkov A.A.; DVPI named after. V.V. Kuibyshev, Vladivostok 2007

6. Nobel Prize laureates: Encyclopedia: Trans. from English - M.: Progress, 1992.

7. “Samuelson Paul” http://n-t.ru

10. informike.ru

13. ecfac.ru/nobel/person

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Scientific achievements

Hicks's first major work, “The Theory of Wages,” is devoted to the study of the functioning of the labor market and the mechanism for setting wages in conditions of imperfect competition. Here the scientist outlined his theory of industrial conflict, according to which the theory of wage setting is a special case of the general theory of value, and the main factor that disrupts the free interaction of market forces in the labor market are trade unions. Within the framework of this theory, Hicks tried to prove that wage rates are determined by the intersection of the “concession curve” of entrepreneurs and the “resistance curve” of trade unions, put forward the idea of the possibility of substituting labor with capital and the elasticity of such substitution, and defined the neutrality of technical progress, in which innovation does not lead to changing the proportions of product distribution between factors of production. Hicks's work had a significant influence on the subsequent development of production function theory and neoclassical theories of unemployment, in particular the theory of the natural rate of unemployment.

In Hicks's main work, the book “Cost and Capital,” for the first time since A. Marshall, an attempt was made to consistently analyze the foundations of neoclassical theory. The book stands out for the breadth of problems considered and lays the foundations of modern microeconomic theory. The work outlines the foundations of the ordinalist theory of prices and develops the fundamental principles of the general theory of equilibrium. Hicks was the first to raise the question of the stability of competitive equilibrium in large economic systems and proved that many of the most important concepts of the Austrian subjective theory of value, such as the law of diminishing utility, the measurability of the absolute value of utility, etc., are in fact not related to fluctuations in demand and offers on the market.

Hicks's concept of inflation is most fully outlined in Essays on the World Economy and comes down to the introduction of the concept of “labor standard” and the thesis of the “wages-prices” spiral.

In the 1970s, Hicks devoted much attention to the development of methodological problems in the development of economic theory and the revision of Keynesian economic theory. In several later works, primarily in “The Crisis in the Development of Keynesian Theory,” he clarified and supplemented the constructions and statements of Keynes, abandoned a number of important provisions of his theory and tried to adapt Keynes’s theory to modern conditions, becoming the founder of “Hicksian Keynesianism.”

Scientific works

"Theory of wages" ( The Theory of Wages, 1932);

"Cost and Capital" ( Value and Capital. An Inquiry into Some Fundamental Principles of Economic Theory, 1939);

"Value and Capital: A Study of Some Fundamental Principles of Economic Theory" ( Value and Capital: An Inquiry into some Fundamental Principles of Economic Theory, 1939);

"Contributions to the Theory of the Trade Cycle" ( A Contribution to the Theory of the Trade Cycle, 1950);

"Essay on the World Economy" ( Essays in World Economics, 1959);

"Critical Essays on Monetary Theory" ( Critical Essays on Monetary Theory, 1967);

"The crisis in the development of Keynesian economic theory" ( The Crisis in Keynesian Economics, 1975);

“Economic prospects. New essays on money and economic growth" ( Economic Perspectives. Further Essays on Money and Growth, 1977);

"Causality in Economics" ( Causality in Economics, 1979);

“Collected essays on economic theory” in 3 volumes. ( Collected Essays in Economic Theory, 1981-83).

John R. Hicks was born in the small English town of Leamington in 1904. He was educated at Oxford University; his “mentor” was the famous figure of the Fabian movement J. Cole (1889-1959), who had recently graduated from the same university. From 1926 Hicks taught at the London School of Economics. In 1928-1931 he published a number of articles in the journal Economics on the conditions for the formation of wages in construction (materials of the prepared dissertation), theoretical concepts in which the existence of capitalist profit is derived from the uncertainty characterizing the operations of the entrepreneur, etc.

"The Theory of Wages". In 1932, Hicks's first book, The Theory of Wages, was published. Already in this work, the 28-year-old English economist demonstrated his interest in the most general theoretical problems, and above all in the theory of value. The book opens with the phrase: “The theory of wage determination in a free market is simply a special case of the general theory of value.” . The concept linking wages to the marginal product of a worker’s labor had already been around for almost half a century by the time Hicks’s book was published (the author directly refers to “The Distribution of Wealth” by J. B. Clark and “Principles of Political Economy” by A. Marshall [A critical analysis of the theory of marginal productivity is contained in the book: V. Afanasyev. Stages of development of bourgeois political economy (essay on theory). M., 1985. ]). However, by this time, a number of issues related to the peculiarities of the functioning of markets undermining the conditions of so-called perfect competition had come to the center of the discussion.

What are the manifestations of violations of the competitive mechanism in the labor market? As is known, by the beginning of this century, the dominance of monopolies had established itself in key sectors of the economy of developed capitalist countries. However, Hicks - in full accordance with the traditions of bourgeois political economy - essentially avoids considering the role of capitalist monopoly and, in particular, monopolistic agreements between entrepreneurs, agreements found in the labor market [Trying to somehow justify the obvious one-sidedness of his analysis, Hicks refers, in particular, to the fact that most of the information about associations of entrepreneurs is kept secret, while the actions of trade unions are always “in plain sight” (see: J. Hicks. The Theory of Wages, pp. 166-167). Such a consideration, of course, cannot in any way be used as a serious argument to exclude the combined actions of entrepreneurs from the theoretical analysis, and the author himself in one or two cases refers to well-known cases of lockouts. Nevertheless, in the course of subsequent discussions it is invariably assumed that capitalist entrepreneurs, by their actions, cannot have any influence on the market level of wages (in the words of Hicks, when purchasing factors of production, the firm always acts as a pricetaker - see: J. Hiks. The Theory of Wages, p. 332 ).

After the Second World War, in the article “The Economic Basis of Wage Policy,” Hicks mentions the need to take into account the monopolistic role of the employers' association in the labor market; however, the theoretical model of monopoly lacks a stable equilibrium. And the author again rejects this idea, this time citing the limited possibilities of the monopoly theory. “The pure theory of monopoly,” he argues, “can only be used to a very limited extent to explain the behavior of entrepreneurs in the markets in which they sell their products; it is even less likely that such a theory will be of any relevance in analyzing the behavior of participants acting - on one side or the other - in the labor market" (J. Hicks. Economic Foundations of Wage Policy. - Economic Journal, September 1955).]. The only factor that disrupts the free interaction of market forces in the book “The Theory of Wages” is the activity of trade unions of workers and employees. The unification of workers and the development of the trade union movement brought to life, according to Hicks, forces that effectively resist attempts by employers to reduce wages; Moreover, these forces can ensure an increase in workers' incomes above the "equilibrium" level.

Considering the usual marginalist income distribution schemes insufficient, Hicks complements them with the “industrial conflict theory”. The only non-market force influencing the movement of wages in these theoretical models is the actions of trade unions. The formulation of the problem is characteristic: “To what extent can pressure from trade unions force employers to pay higher wages or provide their workers and employees with other, more favorable working conditions than those that would have occurred in the absence of trade unions?” [J. Hicks. The Theory of Wages, p. 352.]

The main weapon of pressure on entrepreneurs, which, according to the English economist, is used by trade unions, is the threat of a strike. When considering the possibility of raising wages, the entrepreneur compares the additional costs associated with raising wages and the losses that a strike would bring if he refuses to meet the demands of the workers. Among the parameters that play a particularly important role in the development of “industrial conflict” is the likely duration of the strike [The Hicksian model of wage determination, in which pay rates are determined by the intersection of the “concession curve” of employers and the “resistance curve” of trade unions, is still widely used in Western textbooks (see, for example: R. Byrns, G. Stone. Economics. 2nd ed. Glenview (111.), 1984, pp. 703-704.].

The contents of the book “The Theory of Wages” can testify (sometimes directly, and more often indirectly) to the deep impression that the general strike of English workers of 1926 made on its author. Many judgments about the strike struggle that are expressed in this book are dictated by a keen consciousness danger threatening the entire capitalist system of economic relations. Projects for mitigating class conflict clearly demonstrate the connection between established monopoly capitalism and opportunism - a connection that, as V.I. Lenin showed, “was felt before anyone else and most clearly in England due to the fact that some imperialist features of development were observed here much earlier than in other countries" [IN. I. Lenin. Full collection cit., vol. 27, p. 423-424. ].

In accordance with the ideas of “guild socialism,” Hicks believes that trade unions can perform important social functions in cases where they manage to maintain “industrial peace,” and the concept of industrial conflict he develops can contribute to the theoretical understanding of such a “peacekeeping” role. After all, if it is possible to roughly estimate in advance the losses that the upcoming strike should bring to entrepreneurs and workers, the author argues, both sides can end the matter peacefully by agreeing with each other. The decisive role in this, of course, must be played by the subordination of the reformist line of the trade union leadership to the interests of the capitalists. “The closer the contacts between trade union leaders and employers,” writes Hicks, “the more the trade union leaders turn from agitators into commercial intermediaries.” . Well, you couldn’t say it any clearer!

The methods of deliberate exaggeration, all kinds of protruding the role of trade unions for apologetic purposes are not new; they were often found in bourgeois and reformist literature of the last century. In his work “Brentano contra Marx,” F. Engels noted that the gap between wage workers and capitalists is becoming deeper and wider as modern large-scale industry takes over all branches of production. “But since Mr. Brentano wants to make the wage slave a satisfied wage slave, he has to colossally exaggerate the beneficial effects of labor protection, trade union resistance, petty social legislation, etc.; and since we have the opportunity to counter these exaggerations with simple facts, he gets angry.” [TO. Marx and F. Engels. Soch., vol. 22, p. 100. ].

By the time the publication of “The Theory of Wages” was published, the “simple facts” of reality were most clearly in conflict with apologetic schemes. Suffice it to remember that as a result of the unfolding of the deepest economic crisis in the history of capitalism, unemployment reached unprecedented proportions; Taking advantage of this, capitalist entrepreneurs everywhere resorted to lowering wage rates and increasing the exploitation of those workers who managed to keep their jobs. In such a situation, the author, of course, could not ignore the question of the reasons for the existence of unemployment and the influence it has on the movement of wages.

Subsequently, Hicks noted with satisfaction that the analysis of the problem of unemployment in the first edition of his Theory of Wages was much more meaningful than in Keynes’s General Theory of Employment, Interest and Money, published four years later. [See: J. N i s k s. The Theory of Wages, p. 318.]. Indeed, in the first of these books one can find a more detailed description of the reasons for the existence of various groups of unemployed. Both in methodology and in general focus, this analysis differs little from the theoretical characteristics of unemployment contained in the works of economists of the Cambridge school (F. Edgeworth, A. Pigou, etc.) and Keynes. Bourgeois economists of this trend were united - and continue to be united to this day - by the thesis that the most important factor in the existence of permanent unemployment invariably turns out to be the reluctance of the workers themselves to work (or their inability, lack of energy, etc.). In “The Theory of Wages” there are separate “sketches from life”, indicating, for example, sharp fluctuations in employment in a number of industries [Thus, in the third chapter of the book it is noted that in the capitalist economy there are quite large sectors that have extremely irregular demand for labor; workers and employees employed in such industries especially often find themselves outside the gates of enterprises. In cases where more secure work can be found in other sectors of the economy, these people are forced to accept the most unfavorable payment terms for them.], and yet the main line of theoretical analysis essentially ignores the development trends of capitalist production, the laws of capitalist accumulation.

The bulk of the persistent army of unemployed, according to Hicks, are those workers whose labor results are insufficient to qualify for a “standard” wage. Some people find it "extremely difficult to adapt to the demands of the industrial system" , others are too inert and do not show readiness to move when the location of industry changes, etc. And although in the “Theory of Wages” one can find brief mentions of possible changes in the demand for labor - primarily seasonal fluctuations (!), - his theoretical structure turns out to be completely unsuitable for explaining the abrupt increase in the number of workers and employees who lost their earnings, and the existence of mass stagnant unemployment throughout the 30s. Based on the above argumentation, it seemed that all that remained was to assume the sudden spread of some mysterious epidemic associated with a massive reluctance to work, the disappearance of industrial qualifications, work skills, etc. The monstrous hardships experienced at that time by millions of unemployed people in various capitalist countries, revealed even more clearly the absurdity of such subjectivist concepts, the authors of which tried to blame the workers for unemployment [In the second edition of The Theory of Wages, Hicks had to admit that it had emerged towards the end of the crisis of 1929-1933. the striking contrast between the constructions contained in the book and reality; however, he associated this conflict only with the unfortunate timing of publication. Throughout the twentieth century, Hicks wrote, it was impossible to choose a worse year for publication, “a year in which the theory I developed in my work would have been more irrelevant” (J. Hicks, The Theory of Wages, p. 305) .].

In the first edition of The Theory of Wages one can find a number of analytical techniques that, in the subsequent period, essentially became generally accepted in Western economic literature. Thus, considering changes in the distribution of income, Hicks connects them with the processes of substitution between labor and capital and expresses considerations regarding the possible elasticity of such substitution. The characteristics of the elasticity of substitution between labor and capital are today used in the theory of production functions; they play a significant role in modern bourgeois theories of income distribution. The Hicksian definition of “neutrality” has become widespread technical innovations(characteristics of such innovations, the implementation of which does not change the proportions of distribution of the product between factors of production).

In reality, however, according to the author of “The Theory of Wages,” technical progress most often is not neutral in nature. Facts of capitalist reality may indicate that when choosing new equipment, entrepreneurs in many cases prefer precisely those types of equipment that can most significantly reduce the demand for labor and thereby not only reduce some of the hired personnel, but also put serious pressure on the salaries of those workers who still managed to keep their jobs. Since the advent of the factory system, the machine, as K. Marx showed, has been deliberately used by capital as a force hostile to labor. The transition to a wider use of machinery and the transformation of part of the working population into relatively redundant - this is the method by which capital responds more quickly or more slowly to increases in wages [See: K. Marx and F. Engels. Soch., vol. 16, p. 152-153.].

This trend was reflected - in a completely distorted form - in the concept of “induced innovation”. Increasing wages (the starting point of most of Hicks's theoretical arguments!) should, in his words, set in motion “induced innovations” - innovations that ensure a more active replacement of labor with capital. In the subsequent development of bourgeois theory, however, the question of economic and social consequences labor-saving technical progress, in essence, “sank” in endless debates about how legitimate it is to consider the results of such innovations as replacement within the same aggregate production function(or there is a shift in the curve, a transition to other parameters of the production function).

Hicks' theoretical constructs had a significant influence on the subsequent development of neoclassical concepts of unemployment. In his first articles and in the book “The Theory of Wages,” he tried to identify various components in the total mass of the unemployed: that part of it that is included in the active supply of labor and has a direct impact on the movement of market wage rates, and that part that although and is deprived of work, but, according to him, plays a “passive” role in labor markets. Reasoning of this kind was subsequently further developed in the theory of the so-called natural rate of unemployment [A critical analysis of modern bourgeois theories of unemployment is contained in the books: “Social disease “number one”. How to deal with it? M., 1985; “Criticism of bourgeois theories of the mining and metallurgical complex. Problems of the "mixed economy"". M., 1984, ch. 12.].

After the publication of The Theory of Wages, Hicks published a number of articles in leading theoretical journals; two of them - “Once again on the theory of value”, published in the journal Economics in February 1934, and “Keynes and the “classics””, published in the journal Econometrics in April 1937 - will be mentioned in In 1939, his main work on the theory of value, “Cost and Capital,” was published (Hicks’s book “The Mathematical Theory of Value,” published two years earlier in Paris, was included in a slightly revised form in the mathematical appendix to the work "Cost and Capital").

Cost and capital. The 1920s and 1930s are generally considered to be the “years of high theory” in English political economy, a period characterized by “an extraordinary concentration of intellectual effort and the emergence of many new theoretical concepts.” . It was at this time that the “Treatise on Money” (1930) and “The General Theory of Employment, Interest and Money” (1936) by J. M. Keynes, “The Economic Theory of Imperfect Competition” (1933) J. Robinson, “The Trade Cycle” were published "(1936) by W. Harrod, "Trade and Credit" (1928) by R. Hawtrey, "Money" (1922) and "Banking Policy and the Price Level" (1926) by D. Robertson, the later widely known works of J. Mead, L. Robbins and J. Shackle. But even among these works, Hicks’s book “Cost and Capital” stood out for the breadth and consistency of its theoretical analysis. P. Samuelson in his book “Foundations of Economic Analysis” wrote that Hicks’s work “Value and Capital” will take its place in the history of economic thought next to the classical works of Cournot, Walras, Pareto and Marshall [See: R. Samuelson. Foundations of Economic Analysis. New York, 1976, p. 141.].

In subsequent years, the book “Value and Capital” firmly established its reputation as a “classic work.” It was republished in England and translated into other languages. In 1972, Hicks was awarded (together with the famous American economist K. Arrow) the Nobel Prize in Economics “for the development of the theory of general equilibrium and welfare economics”; and this characteristic, according to Hicks himself, applies to the book “Value and Capital” (1939) and to the works written between 1939 and 1946 - works that outlined the main lines of the concept that later came to be called “the new welfare economics” . Highlighting Hicks's achievements in this area, A. Lindbeck, who currently heads the committee for the Nobel Prize in Economics, noted Hicks's most important scientific achievement was the development of the microeconomic foundations of general equilibrium theory [See: A. Lindbeck. The Prize in Economic Science in Memory of Alfred Nobel. - Journal of Economic Literature, March 1985,].

Theoretical problems, set out in the book "Cost and Capital", are discussed in more detail in subsequent sections. Here we will limit ourselves to only some of the most general characteristics.

In the book “Value and Capital”, for the first time since Marshall, an attempt was made systematic analysis foundations of neoclassical theory. The book contains numerous references to "Principles of Political Economy" [The contents of the book “Cost and Capital” indicate that its author constantly focused not only on the main provisions of Marshall’s “Principles of Political Economy”, but also on the logic of research proposed in this work. And yet, Hicks chooses a different sequence of analysis and presentation of the results obtained (in the preface, he explains this by the desire to focus on new theoretical problems). ], and yet Hicks saw his main task not simply in ordering and systematizing the positions expressed by Marshall himself and his followers. The author of the book "Value and Capital" seeks to go beyond traditional schemes [One of the commentators, D. Helm, noted a paradoxical situation at first glance when it turns out that Keynes, who acted as a “heretic,” was in fact more oriented towards Marshall’s theory than Hicks, who claimed to be the undisputed successor of the neoclassical traditions (See: D Helm Introduction. - The Economics of John Hicks. Oxford, 1984, p. 4).], while offering a slightly different interpretation of a number of initial postulates of neoclassical theory. The formulation of some new problems in this book was also determined by the fact that Hicks’ analysis, to a much greater extent than that of Marshall and his followers, is aimed at considering economic relations in a general equilibrium system.

The main place in the book “Cost and Capital” is occupied by issues of microeconomic theory. The analysis is emphatically individualistic. Hicks carefully avoids any generalizations that are not based on an analysis of the operations of individual participants in the economic process (such as the thesis proclaimed by Keynes about the decreasing marginal propensity to consume) [It is characteristic that in recent years Hicks has repeatedly noted the deep gulf between studies different levels in modern academic theory, the absence of any solid microeconomic foundations on which macroeconomic analysis could rest (see, for example: J. Hicks. Causality in Economics. Oxford, 1979).]. In all theoretical models, it is assumed that 1) the consumer acts in such a way as to ensure the highest values of his objective function (ordinary utility function), 2) the entrepreneur maximizes the amount of profit received. “Cost and Capital” is one of the first works in which the maximization principles underlying modern neoclassical theory were consistently embodied [P. Samuelson dedicated his speech on the occasion of receiving the Nobel Prize in Economics to these principles and their “universal” role (see P. Samuelson. Maximum Principles in Analytical Economics. - P. Samuelson. Collected Scientific Papers, vol. III. Cambridge ( Mass.), 1972).].

At the same time, it would, apparently, be wrong to overestimate Hicks’s innovation, to attribute to him any decisive revision of the fundamental judgments of orthodox neoclassical theory. First of all, we note that many of Hicks’s provisions simply serve as a development and concretization of the ideas of Pareto, Edgeworth and Wicksell. In the introduction to the first edition of the book, the author noted that a number of the ideas expressed in it were prepared by discussions at the London School of Economics in the first half of the 30s; at this time, Hicks participated in the seminar (“circle”) of L. Robbins, which also included N. Kaldor, J. Shackle, R. Allen, A. Lerner and other famous economists. It is especially important to emphasize the following point: the “cleansing” undertaken by Hicks in the field of the theory of subjective utility was, as will be shown below, very limited, in many cases purely superficial and inconsistent.

During the Second World War, J. Hicks, co-authored with his wife Ursula Hicks and the English economist L. Rostes, published the book “Taxation of War Wealth” (1941), and then, again co-authored with W. Hicks, the work “Criteria for Local Government Expenditures” " (1943) and "The Burden of Taxes levied in Great Britain by local authorities" (1945). They considered the most thorny issues functioning of local budgets in England in a war economy.

In 1942, J. Hicks published the book Social Order: An Introduction to Economic Theory. This work can hardly be considered a serious monographic study. The book “The Social System...” was an attempt to systematically present in a popular form the basic ideas of “orthodox” economics. The book's structure was not so familiar: the author opposed the traditional division of introductory courses into purely theoretical and applied ones. Presentation of themselves general concepts(division of labor, theory of value, concept of “national capital”, etc.) alternated with consideration of a number of specific economic and statistical issues (characteristics of the most important demographic indicators, methods for measuring fixed capital, elements of index theory, etc.).

After the publication of the book “Cost and Capital,” the name of Hicks became widely known, and the new work of the English economist soon became one of the most popular teaching aids in English and American universities. By the end of the 60s and the beginning of the 70s (when it was replaced by more modern elementary courses), the book “The Social System...” went through four editions. In 1945, A. Hart published Hicks’s book in the USA, “adapted” in relation to the characteristics of the American economy.

"Contributions to the Theory of the Trade Cycle". Crisis of 1948-1949 refuted the assertions of a number of bourgeois authors that the capitalist economy, which set out on the path of “managed development” during the Second World War, will be able to get rid of crises in the post-war years [In a brief chapter on the trade cycle contained in Value and Capital, Hicks also wrote that a uniform movement of technical innovations could save the capitalist economy from noticeable fluctuations, but he stipulated that such an assumption is of a very general nature and is based on on very shaky assumptions.]. In his monograph, A Contribution to the Theory of the Trade Cycle, published in 1950, Hicks starts from the outset with the proposition that the development of the capitalist economy over the past century and a half has been, and is likely to continue to be, characterized by cyclical fluctuations.

The author refers to the development of elements of the cycle theory by a number of Western economists (J.M. Keynes, R. Frisch, etc.), but none of them, according to Hicks, was able to develop a “synthesizing” general theoretical concept. The author sees an important advantage of the concept developed in the book “Contribution to the Theory of the Trade Cycle” primarily in the fact that it is based on clearly formulated principles of economic dynamics: the book uses the theoretical model of economic growth proposed by R. Harrod. The features of cyclical movement in this concept essentially come down to deviations from the trend trajectory of production expansion.

Considering the standard model of interaction between the multiplier and the accelerator, proposed by P. Samuelson in 1939, Hicks notes the need for its significant modification. Some of his considerations are rather “technical” in nature. [Thus, Hicks notes that the standard model of interaction between the multiplier and the accelerator did not take into account the asymmetry of the relationship between changes in production and capital investment: expansion of production contributes to increased investment, while reduction in production does not mean disinvestment. This circumstance can increase the duration (and, under certain conditions, the depth) of the cyclical decline in production, a consideration clearly inspired by the experience of the crisis of 1929-1933. ] However, it seems fundamentally important to him to introduce into theoretical schemes objective restrictions that the process of expanding production inevitably encounters. In a dynamic economy, of course, the restrictions themselves undergo significant changes(following the author’s terminology, the height of the “ceiling” itself is growing), and yet the demand for the corresponding factors of production during the cyclical recovery expands much faster than their supply. It is easy to see that such an interpretation of the processes of economic growth in an irrational form reflects some acute problems in the development of the English economy in the conditions of the Second World War, as well as in the first post-war years [In the book “Cost and Capital” Hicks identified two possible “paths” to completing the cyclical rise: the transition to monetary restrictions and the exhaustion of conditions for further expansion of production (the latter option was not simply limited to a lack of production resources, but was associated primarily with the completion of the main part previously planned investment projects). In the new work, the credit and financial aspects of cyclical development seemed to be relegated to the background; all the energy of the rise was attributed to the “explosive nature” of investments, and the subsequent cyclical decline in production was attributed to the physical limitations of production resources. A sharp reduction in credit could only contribute to a cyclical decline in economic activity.

In the 70s, however, the growing influence of the monetarist concept was reflected, in particular, in the fact that some economists began to modify the Hicks model, which would take into account the impact of monetary policy (see, for example: D. Laidler. Simultaneous Fluctuations in Prices and Output: a Business Cycle Approach. - Economica, February 1973). And Hicks himself, returning two and a half decades later to the same problem, noted the need to more fully take into account the role of monetary factors when studying the mechanism of the economic cycle (see: J. Hicks. Real and Monetary Factors in Economic Fluctuations. - Scottish Journal of Political Economy, November, 1974).].

Within the framework of these assumptions, Hicks constructs a theoretical scheme of the cycle, highlighting the following four phases: 1) rise, during which production expands from the lowest equilibrium point (reached in the depression phase) to a collision with the “ceiling” of restrictions; 2) marginal boom (Full Boom), when production moves along a limiting trajectory; 3) a decline in production (the author carefully avoids the concept of “cyclical crisis”, using the term “crisis” only to characterize strong shocks in the monetary sphere); 4) after a long decline in production has reached its lowest point, a depression phase begins when a balance of economic forces is finally established. Thus, already in the very characteristics of the phases of the cycle, the theoretical narrowness of the concept is manifested, the interpretation of the cycle as a certain set of deviations from the equilibrium trajectory: only staying in the depression phase could provide the economy with sufficient stability [“From the moment the depression phase begins, the system comes to an equilibrium state; such an equilibrium is stable, and simple changes in the psychological atmosphere cannot cause a deviation from this equilibrium. To move the economy upward from the equilibrium point, something more significant is required; otherwise the revival may have to wait until its appointed hour” (J. Hicks. A Contribution to the Theory of the Trade Cycle. Oxford, 1950, p. 120). ].

The spread of the Samuelson-Hicks concept marked a deepening crisis in the psychological theory of the cycle, which occupied an important place in the works of representatives of the Cambridge school (primarily in the work “Industrial Fluctuations” by A. Pigou). In an effort to somehow limit the semi-mystical role of moods, elusive shades of entrepreneurial psychology, these authors put at the center of the analysis some quite “tangible” technical changes (innovations) lying on the surface and emerging technical and economic relationships [In the book “Cost and Capital” it was still possible to trace the well-known influence of the psychological theory of the Pigou cycle. Looking at the boundaries of the cyclical rise, Hicks saw one of possible reasons The unfolding of the crisis is that the very duration of the period during which production expanded determines the replacement of the optimistic moods of entrepreneurs with pessimistic ones. In the author’s opinion, the following circumstance plays a particularly important role in changing expectations: in a number of important sectors of the economy, market demand usually expands much more slowly than expected, which causes “disappointment” on the part of entrepreneurs (see Chapter XXIV).

In the book devoted to the theory of the cycle, the author's desire to dissociate himself from such arbitrary constructions and purely subjective interpretations is more clearly formulated. “We show,” writes Hicks 11 years after the publication of the book “Cost and Capital,” “that the cycle itself, which in our interpretation represents periodic fluctuations in production, can be explained in the simple reactions of entrepreneurs and consumers; these reactions are not of a purely psychological nature in any way mystical sense, they are based on the technically necessary relationships that develop in an economy using capital” (J. Hicks. A Contribution of Trade Cycle, p. 117).].

Such a turn in the development of the theory of the cycle should have been evidenced, according to the plans of the supporters of the new concepts. about the greater realism of their approach. In practice, however, internal limitations emerged from the very beginning. similar method. And the point is not so much in Hicks’s notorious references to the exhaustion of labor resources towards the end of the rise as the most important factor determining the subsequent cyclical decline in production, although given the existence of an army of unemployed that does not dissolve under any circumstances - an army that has gradually expanded over the past decades, - such references look no less mysterious than an appeal to some inherent alternation of waves of optimism and pessimism in human psychology. The point is primarily in the methodology of analysis itself, which reflects the fetishization of capitalist relations. At one time, K. Marx noted that under the conditions of the bourgeois system, capital more and more acquires a material appearance, more and more from a relation it turns into a thing - “into a thing that has a fictitious life and independence, entering into a relationship with itself... This is the form of his reality, or, more precisely, the form of his actual existence. And in this very form it lives in the consciousness of its bearers, capitalists, and is reflected in their ideas.” [TO. Marx and F. Engels. Works, vol. 26, part III, p. 507. ]. The focus of attention of modern bourgeois economists is not on those fundamental features of the capitalist system, with which the very existence of cyclical fluctuations in economic activity is organically connected [In some cases, Hicks tries to detect symptoms of a cycle in the Dutch economy of the 16th century (see: J. Hicks. Economic "Perspectives. Further Essays on Money and Growth. Oxford, 1977. p. 56).], and some - sometimes arbitrarily taken out of the general context - technical and economic relationships, for example, a highly simplified in its analytical form, the relationship between the size of capital in commodity and productive forms (the accelerator model) - a relationship in which, in the words of K. Marx, capital - a thing has a fictitious life and enters into a relationship with itself. An analysis of certain specific proportions can be fruitful only if it is accompanied by an identification of the role of these relations in the entire system of reproduction of social capital, in the mechanism of exacerbation of its internal contradictions.

It is impossible not to notice, of course, the reservation found in the book, expressing the author’s own doubts about the fruitfulness of using such a concept as “the ceiling associated with achieving full employment.” However, this clause essentially does not change anything. “Yet,” Hicks further writes, “the assumption of a hard barrier is a convenient simplification that will serve our purposes until we are ready to replace it with something better.” , and in the subsequent presentation develops a very primitive concept of a “hard barrier”. Since such restrictions are set in physical form and have a direct impact on the physical volume of production, while the basic model of interaction is formulated in monetary form, this inevitably gives rise to additional problems, highlighting with particular clarity the insufficient certainty of the theoretical model, the absence in it of any characteristics of the cyclical price movements [A more detailed critical analysis of business cycle models developed by Hicks is contained in the book: S. Aukucionek. Modern bourgeois theories and models of the cycle: a critical analysis. M., 1984, p. 59-66.].

Moreover, the equations themselves given in the book are best case scenario characterized only individual - not always the most important, even from the author's point of view - elements of the cyclic mechanism. Returning to these schemes almost three decades later, Hicks noted that as a result of modifications to the premises of Harrod and Samuelson, the model “changes its character. It ceases to be a mathematical model that can be reasonably used to formulate hypotheses in econometric form." . Hicks's book - as well as the publications of E. Lundberg, J. Duesenberry, and R. A. Gordon published in the 50s - marked the completion of an important stage in the evolution of the bourgeois theory of the cycle. These authors recognized the inevitability of cyclical fluctuations in economic activity and associated these fluctuations with the interaction of a number of processes occurring in the “real sector of the economy” (changes in autonomous and induced investments, movement of supply and demand in factor markets, etc.). Since the 60s, concepts have been “reanimated” and revived on a new theoretical basis, deriving the economic cycle from an unevenly expanding supply of money and all kinds of miscalculations of monetary policy (monetarist interpretation of the cycle by M. Friedman, the theory of the “equilibrium cycle” by R. Lucas, etc. .). Hicks's concept seemed to be relegated to the background, and in modern Western literature devoted to the theory of the business cycle, it is much less common than before to find mention of the book “Contribution to the Theory of the Trade Cycle.” In the 50-60s, Hicks again returned to the central, in his opinion, questions of economic theory - questions of the theory of value and to characterize the nature of capital. In 1956, he published “The Theory of Demand Revisited” (second edition, 1959), and in 1965 he published the book “Capital and Economic Growth.”

"Essays on the World Economy". The “Essays on the World Economy,” published in 1959, collected a number of articles (essays) previously published in English journals. Considering the problems of the development of international economic relations in the 40-50s, the author puts forward a gradual abandonment of the accumulation of numerous protectionist barriers in trade as a long-term goal. Hicks strives to restore academic respectability to the once popular slogan of free trade among English economists. In the course of theoretical analysis, he must admit, however, that the traditional interpretation of this problem (in a free trade system, each participant maximizes the production of those goods whose production is associated with the lowest comparative costs) lacks convincingness. Representatives of the Cambridge school (A. Marshall, A. Pigou) have already noted the possibility of a discrepancy between “apparent” private costs and the total social costs of producing any product. Citing an example from the field of agricultural production, when the level of private costs does not reflect the processes of depletion of fertile soils, Hicks recognizes that in such conditions the intensive expansion of the export of agricultural goods should in fact entail an intensification of destructive processes. The author’s considerations regarding the inevitable increase in differences between “apparent” and true costs in conditions of “imperfect competition” and the development of monopolistic relations seem especially significant.

The author connects his hopes for maintaining free competition and limiting monopoly with maintaining a free trade regime and increasing the degree of “openness” of the national economy in relation to the world market. Meanwhile, by the beginning of our century, the complete illusory nature of such hopes was revealed. V.I. Lenin showed that the first steps towards the creation of monopolistic associations were taken earlier by countries with high protective tariffs (Germany, the USA), but “England with its free trade system showed only a little later the same basic fact: the birth of monopolies from concentration of production" [IN. I. Lenin. Full collection cit., vol. 27, p. 421.]. A wave of new protectionist restrictions, which expressed the undermining of free competition, in turn contributed to the further strengthening of the positions of monopolies established in key sectors of the capitalist economy. Indirect recognition of this can be found in Hicks’s book: he notes, in particular, that the growth of restrictions in the field of imports “in itself gives rise to certain trends that contribute to the spread of combination and cartelization of the protected industry, and thereby more strongly limits competitive relations.” .

Hicks spoke out in favor of free trade in his early publications dating back to the Great Depression. Two decades later, by the early 1960s, many of the earlier statements looked, in the words of an English economist, “as if they belonged to another world.” Serious upheavals in the system of international economic relations between capitalist countries gave rise, as indicated in the book, to a series of successive balance of payments crises. Dramatic changes in the balance of power caused by the Second World War and the difficulties of the first post-war years gave rise to a number of additional problems. Many capitalist countries sought to use the depreciation of their currencies as one of the main means of stimulating exports and limiting imports. Despite the restraint and academic nature of his presentation, Hicks cannot help but note that in such a situation, the measures provided for by the “Marshall Plan” also turned out to be an important means of pushing American goods into the markets of Western European countries. .

An important place in the book is devoted to the analysis of the problems of the steady rise in prices in the post-war capitalist economy. It is in this work that, perhaps, Hicks’s theoretical concept of modern inflation is most fully expounded. In one of the essays (“Wage Instability”), the author compares different approaches to determining economic sustainability. In an economy characterized by a constant increase in labor productivity, stability can be associated either with the unchanged monetary income and a parallel decrease in prices for goods and services (“old stability”, according to Hicks’s characterization), or with income growth [Let us immediately note that Hicks invariably reduces such an increase in cash income to an increase in wages.] and maintaining a constant price level (“new stability”). Comparing the characteristics of economic development in both cases, he shows that the equilibrium level of loan interest in the conditions of “new stability” turns out to be higher than with steadily declining prices. The author sees this as one of the reasons for the ineffectiveness of monetary policy - inefficiency that was especially clearly revealed in the 30s and 40s of our century. The most difficult problems, according to the author, are generated by the “new stability” in the area of wage movement and the purchasing power of money.

Under the “old stability”, both the level of wage plans and its structure react relatively sluggishly to small changes occurring in the labor market: “The existing relations between workers, as well as between workers and entrepreneurs, embodied in the wage structure, have become generally accepted that to a large extent can probably be explained by established habits.” . In an environment of “new stability”, such an institutional mechanism that keeps wages from excessive growth ceases to function. An increase in wages that goes “over the edge” becomes a source of continuous rise in prices.

As long as the gold standard existed, the stability of income (“old stability”) was ensured by the very laws of circulation of full-fledged money. In the new conditions, the gold standard, according to Hicks, is being replaced by the so-called “labor standard.” This should inevitably entail a change in the mechanism of international payments and an intensification of conflicts between capitalist countries that appear in this area. “If the gold standard was international in nature,” we read in this book, “then the labor standard is limited to a national framework.” .

The characteristics of the “labor standard” and the thesis about the notorious “wages-prices” spiral (repeatedly put forward before the publication of Hicks’s publications, but formulated by the latter in a particularly categorical form) subsequently became extremely widespread in bourgeois economic literature.

Hicks's concept of inflation contained a number of realistic observations. A significant role in analyzing the post-war increase in the cost of living, of course, should be played by taking into account the features of modern monetary circulation associated with the collapse of the gold standard. This concept, apparently, significantly exaggerates the degree of “inflexibility” of monetary circulation, the “rigidity” that was revealed in previous conditions. However, there is no doubt that in today's capitalist economy, both the mass of circulating money and the speed of its circulation can be more adaptable to the movement of capitalist incomes and prices and thereby, as it were, “fix” them at a new level. The book’s description of the detrimental influence that uneven price increases in different countries has on the capitalist mechanism of international payments also attracts attention.

However, the central thesis of the entire theoretical structure turns out to be false - the thesis that puts forward “excessive” wage growth as the main and, in essence, the only cause of modern inflation. In the given diagrams, many of the considerations contained in the “Theory of Wages” and in the book on the trade cycle are further developed. The uneven growth of labor productivity in various industries and other changes in the real sector of the economy, according to the author, invariably entail too large an increase in wages: at the same time, in all reasoning of this kind, the movement of other incomes, especially the income of entrepreneurs, is simply ignored [Those objective economic processes that, in a capitalist economy, limit the possible growth of real wages are also ignored. Meanwhile, Hicks himself wrote a lot about the fact that, say, a wave of capital investment could lead to a sharp increase in pensions. In such a situation, both prices and wages in monetary terms increase, but wages lag behind the rise in prices" (J. Hicks. Economic Perspectives. Further Essays on Money and Growth, p. 27).].

In "Essays on the World Economy", as in Hicks's previous works, the forms of economic realization of the capitalist monopoly are not considered at all. “The key area of the entire economy” is the labor market [See: J. Hicks. Essays in World Economics, p. 137.]. and the only force that causes income to deviate from the equilibrium level is the depletion of available labor reserves, which comes to the fore here (as in economic cycle models) [Thus, considering the features of the development of the English economy in the 50s, the author claims that after 1953 it functioned “in close proximity to the limit of the possible use of labor” (J. Hicks. Essays in World Economics, p. 136). ] and "pressure" from organized labor fighting for higher wages. The logic of such reasoning clearly reveals the true social orientation of modern bourgeois concepts of inflation, which in every possible way protect capitalist monopolies and the bourgeois state and seek to place all the blame for inflation on the working class.

Bourgeois concepts linking inflation with “excessive” wage growth were subjected to detailed critical analysis in the works of Soviet economists [See, for example: Criticism of modern bourgeois theories of finance, money and credit. M., 1978, ch. VII; Criticism of modern bourgeois political economy. M., 1977, ch. III, etc.]. Let us confine ourselves here to merely pointing out that theoretical constructions of this kind contradict numerous facts; they are not confirmed, by the way, even by the data given in the book in question. Thus, during 1947-1952, during the period when inflation in England was developing at the fastest pace (by 1952, retail prices had increased by an average of 43% compared to 1946), base wage rates in real terms were steadily decreased. In other words, the “excessive” increase in money rates, as bourgeois economists described it, could not even ensure that workers maintained the previous level of wages; expressed in pounds sterling at constant purchasing power, it had fallen by 1952 (1946=100) by about 6% [See: J. H i s k s. Essays in World Economics, p. 142.]. Thus, during the post-war inflation, there was a redistribution of national income and social wealth that caused additional material damage to workers and employees, the bulk of the working people.

"Theory of Economic History". The problems that attracted Hicks' attention always included problems of economic development in the pre-capitalist era. In 1969 he published a book on “the theory of economic history.” Trying to clarify the very concept of “theory of history,” Hicks is very skeptical about all plans to create some kind of grandiose philosophy of history in the spirit of O. Spengler or A. Toynbee. He proposes a more specific and pragmatic approach: rather, the conversation should be, according to Hicks, about making wider use in historical research of some general patterns that are formulated by economic theory. Such an analysis aims, as the author emphasizes, not to fully explain (describe) a particular historical event, but to find general trend, revealing itself in some “statistical uniformity” [As an example, he cites the statements of a number of Western historians, according to which, among the factors that brought to life the French Revolution of the 18th century, the personal characteristics of Louis XVI played an important role, in particular, his apathy and reluctance to govern the country. This approach, as Hicks argues, essentially eliminates the very possibility of the existence of a theory historical process. Rejecting such an approach, the author proposes to see in the French Revolution “an expression of social changes - changes that would have occurred in France under a better monarch and which, in a less obvious form, occurred in other countries” (J. Nicks. A Theory of Economic History. Oxford, 1969, p. 4).].

The author seeks to overcome the primitive ahistorical interpretation of the categories of capitalist economy, which is so often found in the works of modern bourgeois economists. With obvious irony, he writes, for example, about those authors who simply do not imagine any other forms of organization of the economic process other than market ones (and in markets, according to the assumption of these economists, relations of more or less “perfect” competition should invariably dominate). Since the time of A. Smith, the division of labor in an enterprise and throughout society has been associated, as Hicks notes, with traditional Western theory only with the development of market relations. All such dogmas are simply contrary to historical facts; pointing out this, the author refers to examples of the division of labor that existed in natural farming early Middle Ages. It remains only to recall that more than a hundred years before the publication of Hicks’s Theory of Economic History, K. Marx gave a deep, truly scientific characterization of the relationship between the social division of labor and the development of commodity production. The social division of labor, as K. Marx showed, “is a condition for the existence of commodity production, although commodity production, on the contrary, is not a condition for the existence of a social division of labor. In the ancient Indian community, labor is socially divided, but its products do not become commodities.” [TO. Marx and F. Engels. Soch., vol. 23, p. 50-51. ].

Among “non-market” economies, Hicks identifies two main types: an economy based on orders and an economy based on custom (although in many historical situations elements of both of these types of economy could be observed simultaneously). The book gives a rather vague description of the feudal economy. The dominant role under feudalism is played by an economy based on custom, when the hierarchy of power, including economic power, is based on the existing, habitual structure of social relations. According to the author, feudal systems include all those social systems that “have not achieved much success in transforming the army into a civil government.” .

If such a transformation has taken place, then, according to the author, a transition to a “bureaucratic society” is taking place. In a bureaucratic economy (for example, in imperial China), orders and “commands” emanating from the upper echelons of power played a particularly large role, but economic relations based on custom also developed in it. The coexistence of both economic systems - “command” and based on custom - was characterized by fluidity and mutual transitions: in conditions of an acute crisis of previous forms of economic life, the economy more often “shifted” towards the “command” system [In this case, Hicks uses A. Toynbee’s favorite technique - a reference to the fact that society is faced with another “challenge”, reacting to it by strengthening bureaucratic organizations. A critical analysis of this approach is contained in the book: Yu. Semenov Social philosophy of A. Toynbee: a critical essay. M., 1980.], while in normal (“calm”) conditions the role of economic relations based on custom gradually increased.

Ignoring in all these discussions the fundamental characteristics of a particular mode of production (ownership of the most important conditions of production, the place of various classes in the system of social production, etc.) inevitably opens the way to classifications and theoretical constructs that are not scientifically correct enough. The features of the development of the feudal economy described in the “Theory of Economic History”, in many cases, wrongfully extend, say, to the economy of Ancient Greece: production within the framework of the ancient polis in Hicks’ book is essentially identified with production concentrated in Italian cities - Florence, Venice, Genoa, etc. on the threshold of the “new time,” etc.

Much space in the book is devoted to characterizing the emerging market relations, pre-capitalist development of money and credit; however, a detailed analysis of these issues would take us far beyond the main topic. Let us only note that central role In the genesis of capitalism, according to Hicks, the processes of formation of such a person played a role, who in all his actions is guided by considerations of economic rationality. These arguments clearly show the indirect influence of the ideas of M. Weber and R. Toney (ideas to which Hicks directly refers in other works). This affected, in particular, an exaggerated assessment of the scale and especially the importance of trade operations carried out in medieval society. Reviews of the book written by experts in the field of economic history noted not only numerous “extensions” and distortions of the historical perspective, but also the connection of these distortions with Hicks’s general concept, with an exaggerated assessment of the role played by merchant activity in the pre-capitalist era.

In the conclusion to The Theory of Economic History, Hicks notes the seriousness of the economic problems facing modern capitalism. After listing some of these problems - inflation, balance of payments deficits, internal monetary disorder and the crisis of the monetary system - he remarks: “But these are just symptoms, the cause lies deeper.” . The author again and again tries to place all the blame for the current situation on the workers, on the “exorbitant claims” that they make to private entrepreneurs and the state. At the same time, the book exposes the “weakness” of governments in developed capitalist countries, since they are unable, according to Hicks, to effectively resist demands for increased social spending. It remains only to note that it was precisely such reasoning that formed the basis of the turn to neoconservatism and the attack on social programs in bourgeois economic (as well as political) theory that unfolded in the subsequent period.

"Economic prospects...". In the book “Economic Prospects,” published in 1977. New Essays on Money and Economic Growth” contains a series of essays that seem to be adjacent to Hicks’s previous works. One of the essays - “Industrialism” - echoes the final chapters of the work “The Theory of Economic History”. Listing in this essay the manifestations of the “elephant disease” that large-scale machine industry brings with it, the author names capitalist monopoly and directly writes about the monopolistic concentration of economic power in a small number of major corporations. He is skeptical of attempts to limit private monopoly: in such cases, they usually resort to the nationalization of corporations or government control over their activities, “but bitter experience has taught us that such measures are nothing more than an attempt to superficially solve the problem, they do not address the problem itself economic power,” notes Hicks .

Immediately after this, there appear lengthy arguments that the development of capitalist industry was accompanied by the growth of trade unionism, the increasingly widespread claims of workers and the “excessive” growth of real wages [The following nuance is also worthy of attention: in contrast to the article on wage volatility published in 1956 (see: J. Hicks. Essays in World Economics, p. 105-120), in the essay on industrialism the author seeks to derive inflation from the slowdown in economic growth and worker protest against the insufficient increase in real incomes (see: J. Hicks. Economic Perspectives. Further Essays on Money and Growth, p. 34-35). This modification of the inflation pattern clearly revealed both the increase in economic difficulties throughout the capitalist economy in the 70s and the specific symptoms of the “English disease” mentioned by Hicks. ]. As for the capitalist monopoly, it simply disappears from the list of economic and political forces considered below that influence the movement of real income.

Throughout the 70s, price growth accelerated significantly in capitalist countries. Inflation, which has become “Problem No. 1,” has become the subject of active theoretical debate. Hicks also notes the tendency for prices and unemployment to rise simultaneously. “This is a new phenomenon,” we read in the book [See: J. Hicks. Economic Perspectives. Further Essays on Money and Growth, p. 46.]. Explaining the theory of money, the author pays much attention to the changes in the mechanism of domestic and international monetary payments that occurred in the 70s, and especially the impact of these changes on price movements. The central place in the book “Economic Prospects...” is given to the essay “Experience in the development of the monetary sphere and the theory of money.” This essay notes increasingly serious “disruptions” in the functioning of the monetary system. It would be wrong, according to Hicks, to regard the monetary system based on the Bretton Woods agreement as the gold standard. The connection between monetary circulation and the metal base was sharply weakened already in the 30s. The "dollar standard", embodied in the Bretton Woods system, "marked an important step in the movement towards a purely credit economy" , and the American dollar served as the axis of the entire credit system.

Under the new conditions, the supply of money was no longer regulated, as the author believes, by “natural” economic forces. In an environment of prolonged price growth, market interest rates inevitably ended up below the equilibrium level [The book uses the theoretical scheme of the famous Swedish economist K. Wicksell, developed by him in the book “Loan Interest and Prices.” In accordance with this scheme, it is assumed that the decisive role in the movement of free monetary resources is played by fluctuations in market interest around the “natural” level (see: K. Wicksell. Interest and Prices. London, 1936). ]. Meanwhile, in the “credit economy,” the movement of interest affects not only the demand and supply of loan capital, but also the scale of money circulation. If the market interest rate deviates downward from the equilibrium level, this entails a cumulative expansion of credit operations, an increase in the mass of circulating means of payment, which in turn contributes to further development inflation.

Another reason for the rise in prices in the 50s and 60s was, according to Hicks, the very unevenness in the movement of labor productivity within the framework of the world capitalist economy. The book uses an elementary scheme: it is assumed that those countries in which labor productivity increased rapidly - for example, Japan, Germany, etc. - were able to significantly expand their exports to other countries. In the conditions of maintaining fixed currency parities and increasingly imbalanced balances of payments, this should inevitably, as the author shows, entail an additional increase in prices in both groups of capitalist countries.

The following circumstance also attracts attention. Listing the main factors for the steady rise in prices, Hicks also mentions his favorite concept of inflation expectations and the strike struggle of the working class (as factors of “independent” wage growth); however, in the new conditions the author had to significantly modify the previous concept of the inflationary process. For the first time, perhaps, he more or less clearly formulated some objections to the concept that derived the rise in high prices only from the action of new political forces, primarily from the struggle of the working class organized in trade unions for increasing their wages [These objections are outlined in more detail by Hicks in the article: J. Hicks. What is Wrong with Monetarism? - Lloyds Bank Review. October 1975.](although, as will be noted below, Hicks’s new interpretation of inflation bears a clear imprint of the influence of this concept). He now believes that in the 1950s and 1960s, during the reign of the Bretton Woods system, "independent" wage increases could not be considered an important cause of inflation throughout the world capitalist economy, although they could, according to Hicks, play an important role. role in the growth of high prices in individual countries (meaning, of course, primarily England).

The devaluation of the pound sterling in 1967 marked, as the book notes, the first crack in the Bretton Woods monetary system, and the ensuing mass retreat from the policy of maintaining fixed currency parities and the refusal of the central bank and the US government to exchange dollars for gold marked the “end old era." The author associates the transition of developed capitalist countries to a regime of free floating currencies with the elimination of the last severe restriction that monetary circulation could erect on the path of expansion of production.

Freed from this restriction, the economies of many states showed a tendency towards unbridled economic expansion. The “general boom” that unfolded in the early 70s, however, lasted just over a year. The subsequent explosion of energy and raw materials crises, as well as a sharp aggravation of the food situation, indicated that the capitalist economy

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