The Revival of Classical Political Economy and the Cambridge Tradition: From Scarcity Theory to Surplus Theory

Hilary Putnam and Vivian Walsh argue that Amartya Sen's contribution can, like the writings of Piero Sraffa, be best interpreted as a revival of classical political economy, in which Sen brings back into economics a richer conception of the human agent, and a moral dimension. Sen criticises the conception of rationality that underpins mainstream microeconomic theory, and suggests an alternative framework that can accommodate a variety of motivations, including moral motivations, as will be argued here. Furthermore, the work of Sen, and other authors of the Cambridge tradition who also devoted much time to the revival of classical political economy, are complementary in many respects, and provide the basic tools for an alternative economic theory, which is centred on the economic, social and ethical analysis of the production and distribution of the economic surplus, and not on the modelling of the activity of optimising agents in a context of scarcity. While the notion of scarcity is very important for the analysis of poverty and deprivation that Sen undertakes, the central issue to address, in order to explain the causal mechanisms behind scarcity, poverty and deprivation, concerns the study of the production and distribution of the economic surplus.