Honoring Duncan Foley

On April 20-21 at the New School for Social Research there was a symposium held in honor of Duncan K. Foley at which he was presented a festschrift. It was organized by his now retired colleague, Lance Taylor, along with former student and coauthor Armon Rezai, and his coauthor on Growth and Distribution, Tom Michl. Duncan is now part-time at NSSR and about to turn 70. The symposium was a fascinating collection of people from his past discussing many ideas that Duncan has worked on over his career, from his orthodox work on general equilibrium theory, through his work on money in Marxian theory, his work on growth and distribution, econophysics, history of thought, financial markets, public goods, global climate, and other matters. He made a long personal commentary on his career at the end, and on Friday evening letters of admiration were read and many colleagues and students spoke about Duncan's work and influence on them most praisingly. I shall list who presented and then discuss some ideas of particular interest. The first session was on him personally. After the NSSR president presented him the festschrift, Michael Piore reminisced about their time at MIT together after Duncan finished his PhD in two years at Yale. Then I spoke about his role in the development of complexity economics. The second was on growth and distribution, with papers by Amitava Dutt, the French Marxist Gerard Dumenil, and Tom Michl. An idea pushed by both Dumenil and Michl is that a more useful short-run equilibrium condition for a macroeconomy is the rate of capacity utilization, arguing that unemployment rates are poorly measured, and that the natural rate of unemployment is an empty concept useless as an equilibrating condition. Then Duncan's major professor, Herbert Scarf, still very on top of things at 81, chaired a session on Decentralized, Dispersed Exhange, with his student now a philosopher, A.J. Julius proposing a catallactic adjustment to GE process, Graciela Chichilnisky discussing her role in writing into the Kyoto Protocol the cap and trade article, and arguing in favor of her idea of a green golden rule in which the present does not exploit the future and that the future does not exploit the present. She identified this as the meaning of sustainability. Then there were two papers on econophysics, Joe McCauley speaking on financial markets and Victor Yakovenko speaking on income and wealth distribution dynamics and patterns. The final session of Friday was on Value, Distribution, and Capital, chaired by his colleague, Ed Nell. Simon Mohun argued that the labor theory of value can be used to analyze shares of income between different categories of labor, counting supervisory workers wages as returns to capital. Ed Wolff discussed downsizing between 1967 and 1997, reporting that firms downsizing experienced falling profits and share prices, and that downsizing was linked to de-unionization. Anwar Shaikh dscussed how different categories of capital are treated in US national and income accounts, and Duncan's student from Stanford, Tracy Mott followed up on the themes of the earlier talks. On Saturday morning, K. Vela Velupillai spoke on Duncan's PhD thesis and how he had independently discovered a method of studying shadow prices for public goods due to Negishi. Peter Skott spoke on how accounting for positional concernsn by people increases the return to acting to slow global warming. The final session was the most stimulating. Perry Mehrling spoke about the hierarchy of money and how the current global system of credit and debt is operating. He posits that there is now an effective global lender of last resort, the C5. This group is the key group of the five most important central banks, the Fed, the ECB, the Bank of Japan, the Bank of England, and the Swiss central bank. Curious that the Bank of China is not part of this group, despite the increasing importance of the Chinese economy in the world. Phil Mirowski spoke on his ideas of markets as markomata or information processing mechanisms and argued a Minsky view that the financial markets inevitably destabilize themselves. Finally, Rajiv Sethi spoke on how algorithmic trading is destabilizing world financial markets. There were some heated discussions in this session, all very stimulating.