Daniele Besomi writes:

Mason suggests 

> . a different origin for the divide.  Step One, leading
> economists in the 1930's were embarrassed and discredited by their serious
> failures to anticipate the crash, and to suggest remedies. Step Two, along
> came Keynes, resurrecting the ancient public works solutions, and
attracting
> a huge following. The old timers were trained to preach free markets and
> austerity for labor, and had tenure and seniority, so to compromise they
let
> young Turks teach fiscal policy, and old fossils teach free markets: macro
> and micro, two half-separate disciplines. 

Daniele writes: Although the timing is correct, an important figure is left
out of the picture: Ragnar Frisch. In his 1933 essay on the propagation and
impulse problems in economics he wrote:

"When we approach the study of business cycle with the intention of carrying
through an analysis that is truly dynamic and determinate in the above
sense, we are naturally led to distinguish between two types of analyses:
the micro-dynamic and the macro-dynamic types. (snip)
	The macro-dynamic analysis, on the other hand, tries to give an
account of the fluctuations of the whole economic system taken in its
entirety. Obviously in this case it is impossible to carry through the
analysis in great detail. Of course, it is always possible to give even a
macro-dynamic analysis in detail if we confine ourselves to a purely formal
theory. Indeed, it is always possible by a suitable system of subscripts and
superscripts, etc., to introduce practically all factors which we may
imagine: all individual commodities, all individual entrepreneurs, all
individual consumers, etc., and to write out various kinds of relationships
between these magnitudes, taking care that the number of equations is equal
to the number of variables. 

	M.G. here. Frisch seems to be describing Walras' general
equilibrium, without citing Walras. Perhaps he had not yet come into vogue.

Such a theory, however, would only have a rather limited interest. In such a
theory it would hardly be possible to study such fundamental problems as the
exact time shape of the solutions, the question of whether one group of
phenomena is lagging behind or leading before another group, the question of
whether one part of the system will oscillate with higher
amplitudes than another part, and so on. But these latter problems are just
the essential problems in business cycle analysis. 

	M.G. here. Up to this point I agree with Frisch. Next, IMHO, he goes
astray:

In order to attack these problems on a macro-dynamic basis so as to explain
the movement of the system taken in its entirety, we must deliberately
disregard a considerable amount of the details of the picture. We may
perhaps start by throwing all kinds of production into one variable, all
consumption into another, and so on, imagining that the notions
"production," "consumption," and so on,' can be measured by some sort of
total indices.".

	M.G. again. We do NOT need to disregard the "structure of
production" in general, however, a matter that several Austrian economists
had labored at length before Frisch wrote, and that might even be called the
dominant macro-economics before Keynes - and that contained elements harking
back to Ricardo, and before him to Turgot.

	These deal with "disproportionate development of special parts of
that system", the very things that Kalecki wants us to disregard (Kalecki,
p. 327). This change would seem to constitute a net subtraction from the
body of economic knowledge.



Mason Gaffney