Anwar Shaikh (economist)

Anwar M. Shaikh (born 1945) is a Pakistani American economist working in the

Anwar Shaikh
classical tradition. He is currently Professor of Economics at the Graduate Faculty of
The New School in New York City.[2] His work in political economy has focused on
the economic theory and empirical patterns of developed capitalism. He has written
on international trade, finance theory, political economy, U.S. macroeconomic
policy, the welfare state, growth theory, inflation theory, crisis theory, inequality on
the world scale, and past and current global economic crises.

Contents
Biography Born October 22, 1945[1]
Work Karachi, British India
Critique of perfect competition (present-day Pakistan)
Theory of the profit rate
Nationality United States
Empirical measures of profit
Production function critique Institution New School for Social
Capitalism: Competition, Conflict, Crises Research
Selected publications Field Heterodox economics,
References Macroeconomics,
External links Marxian economics,
crisis theory
School or Classical economics,
Biography tradition Marxian economics,
Shaikh was born in Karachi, in 1945. He traveled extensively at an early age and Radical political
attended schools and lived for various lengths of time in Ankara, Washington, D.C., economy
New York City, Lagos, Kuala Lumpur, and Kuwait. Alma mater Stuyvesant High
School
He graduated from Stuyvesant High School in New York City in 1961, received a
Princeton University
B.S.E from Princeton University in 1965, worked for two years in Kuwait, and then
Columbia University
returned to the United States to study at Columbia University, from which he
Doctoral Ronald Findlay
received his Ph.D. in Economics in 1973. In 1972 he joined the Economics
advisor
Department at the Graduate Faculty of theNew School for Social Research.
Information at IDEAS / RePEc
He taught mathematics, physics and social sciences at the Kuwait-American School
in Kuwait City in 1966–67 and worked as a teacher of social science and mathematics at Harlem Prep in Harlem, NY, while in
graduate school.

His major political influences stem from the Civil Rights Movement and feminist movement in the US and from progressive
development movements abroad. He always foundneoclassical economicsunpersuasive, and the quest for more solid foundations led
him to the works of John Maynard Keynes, Roy Harrod, Wassily Leontief, Michał Kalecki, Joan Robinson, Piero Sraffa and Luigi
Pasinetti, and subsequently to Adam Smith, David Ricardo and Karl Marx. The quest for a modern political economy of developed
[3]
capitalism became a central theme of his subsequent work.

Work
Critique of perfect competition
Shaikh has argued in various publications that neither neoclassical economics nor the great bulk of heterodox economics provides an
adequate foundation for the analysis of developedcapitalism. The former is based on a vision of a perfect capitalism which is claimed
to optimally and efficiently serve the interests of all of its participants. At the heart of this vision is the theory of perfect competition.
Much of heterodox economics is in turn based on the theory of imperfect competition, i.e., on departures from perfect competition.
But the theory of imperfect competition is intrinsically dependent on the theory of perfect competition. Shaikh argues that even neo-
ricardian economics, whose revival was sparked by Sraffa's classic work, relies heavily on the neoclassical concepts of perfect
competition and of equilibrium as an attained-and-held state. In place of these notions, Shaikh proposes the theory of real competition
and the theory of turbulent regulation. Real competition is competition-as-war, with individual firms seeking to undermine each other
by lowering costs and cutting prices. Turbulent regulation is the resulting process of perpetual overshooting and undershooting of
actual economic variables (such as prices, wages and profit rates) around their ever
-moving centers of gravity. Shaikh has utilized this
framework to develop alternate theories of industrial, financial and international competition (the latter rejecting the standard theory
of comparative costs). The key element in all cases is the turbulent equalization of profit rates in various spheres of investment. He
uses his theoretical structures to explain the actual patterns of industrial prices,
profit rates, stock market prices, and exchange rates in
the developed world.

Theory of the profit rate

The second strand of Shaikh's work concerns macrodynamics. Once again, the profit rate is the key variable. He argues that capitalist
growth is driven by profitability, not by the requirements of full employment as in neoclassical theory, by exogenous demand as in
Keynesian theory, or by the savings rate as in Harrodian theory. In his earlier work, he used this notion to develop a theory of long
waves and crises based on the Marxian concept of falling rate of profit. Subsequently, he showed that the link between growth and
the profit rate can also provide an alternate theory of inflation, which he showed to work very well for the US in the postwar period.
In more recent work, he has developed a formal classical profit-driven model of growth and contrasted its structure and its policy
implications to those of the standard models in the other traditions.

Empirical measures of profit

A third strand of his work is the relation between theoretical categories and empirical measures. His 1994 book Measuring the Wealth
of Nations: The Political Economy of National Accounts, co-authored with Ahmet Tonak, developed a mapping between the national
accounts corresponding to neoclassical and Keynesian concepts and those corresponding to classical and Marxian ones. It is now a
classic reference on the subject. More recently, he has argued that it is crucially important to distinguish between the average rate of
profit on all capital invested, which includes old and new investments, and the rate of return on new investment alone. It is only the
latter, he argues, which is turbulently equalized among alternative uses of capital. He showed that one can approximate the rate of
return on new investment via the incremental rate of profit. Using this, he demonstrated that, contrary to the "irrational exuberance"
claim of Robert Shiller, the rate of return in the stock market does indeed oscillate around the incremental rate of return in the
corporate sector. In more recent work, he demonstrates that the same turbulent equalization holds for manufacturing sectors within
the US and even acrossOECD countries.

Production function critique

The final strand of his work is a critique of the neoclassical aggregate production function and its associated marginal-productivity
theory of income distribution, dating back to his earliest work Laws of Production and Laws of Algebra: The Humbug Production
Function (1974). This was a stinging critique of Robert Solow's famous article on the measurement of technical change, following up
on a similar criticism of cross-section production functions by Simon and Levy (1963). To combat the notion that production
functions, if not theoretically sound, are at least empirically well-supported, Shaikh fitted a function to a set of data points that spell
out "HUMBUG" when plotted, then showed that the result was a proper production function.
The Simon-Shaikh critique of production functions was taken up by Jesus Felipe, J. S. L. McCombie and others in a series of articles
over the years. Further articles by Shaikh in this vein appeared in 1980, 1986, and 2005, the last being in a special journal issue
devoted to the subject that included contributions by Felipe, McCombie, and Franklin M. Fisher. Expressing the importance of
Shaikh's result, J. E. King remarked that "[i]f there was any justice in the world of economics," Shaikh should have gotten the Nobel
Memorial Prize for the humbug production function.[4]

Capitalism: Competition, Conflict, Crises

Shaikh's 2016 book Capitalism: Competition, Conflict, Crisis[5][6] is a graduate-level textbook that attempts to revitalize classical
political economy, by deriving theoretical and empirical results from classical assumptions. It synthesizes much of his earlier work
into a comprehensive theory of micro- and macroeconomics, while critiquing both mainstream neoclassical economics and post-
Keynesian alternatives.

Selected publications
Capitalism. Competition, Conflict, Crises(2016), Anwar Shaikh, Oxford University Press
"Globalization and the Myth of Free Trade" (2007), in Globalization and the Myths of Free Trade: History, theory, and
empirical evidence, Anwar Shaikh (ed.) Routledge, New Y ork, NY.
"Nonlinear Dynamics and Pseudo-Production Functions" (2005) inThe Eastern Economics Journal, Special Issue on
Production Functions.
"Explaining the Global Economic Crisis: A Critique of Brenner" (1999),Historical Materialism, No. 5.
"Explaining Inflation and Unemployment: An Alternate to Neoliberal Economic Theory" (1999), Contemporary
in
Economic Theory, Andriana Vachlou (ed.), Macmillan, London.
"The Stock Market and the Corporate Sector: A Profit-Based Approach" (1998), in Markets, Unemployment and
Economic Policy: Essays in Honour of Geoff Harcourt', V olume Two, Malcolm Sawyer, Philip Arestis, and Gabriel
Palma (eds.), Routledge, London.
"The Empirical Strength of the Labor Theory of V alue" (1998), in Conference Proceedings of Marxian Economics: A
Centenary Appraisal, Riccardo Bellofiore (ed.), Macmillan, London.
"The Falling Rate of Profit as the Cause of Long W aves: Theory and Empirical Evidence" (1992), inNew Findings in
Long Wave Research, Alfred Kleinknecht, Ernest Mandel, and Immanuel W allerstein (eds.), Macmillan Press,
London.
"Wandering Around the Warranted Path: Dynamic Nonlinear Solutions to the Harrodian Kn ife-Edge" (1992), in
Kaldor and Mainstream Economics: Confrontation or Convergence? (Festschrift for Nicolas Kaldor) , Edward J. Nell
and Willi Semmler, The Macmillan Press Ltd.
"The Falling Rate of Profit and the Economic Crisis in the U.S." (1987), in The Imperiled Economy, Book I, Union for
Radical Political Economy, Robert Cherry, et al. (eds.)
"The Transformation from Marx to Sraffa" (1984), in Ricardo, Marx, Sraffa, The Langston Memorial V olume, Ernest
Mandel, and Alan Freeman (eds.)
"On the Laws of International Exchange" (1980), inGrowth, Profits and Property, Edward J. Nell (ed.), Cambridge
University Press, Cambridge.
"An Introduction to the History of Crisis Theories" (1978), inU.S. Capitalism in Crisis, U.R.P.E., New York.
"Laws of Production and Laws of Algebra: The Humbug Production Function" (1974), The Review of Economics and
Statistics, Volume 56(1), February 1974, p. 115-120.

References
1. Shaikh, Anwar (2016)."Curriculum Vitae Dr. Anwar Shaikh Fall 2016"(http://anwarshaikhecon.org/images/docs/curri
culum_vita/Shaikh%20Vita2016.pdf) (PDF). AnwarShaikhEcon.org. Retrieved April 16, 2018.
2. Anwar Shaikh. (http://homepage.newschool.edu/~AShaikh/)Archived (https://web.archive.org/web/2010042117031
3/http://homepage.newschool.edu/~AShaikh/)2010-04-21 at the Wayback Machine The New School for Social
Research 2011. Retrieved 7 July 2011.
3. Shaikh, Anwar (August 15, 2016)."Anwar Shaikh Biography"(http://anwarshaikhecon.org/index.php/about-anwar-sh
aikh-economist-new-school/anwar-shaikh-biography)
. Anwar Shaikh Econ. Retrieved October 4, 2017.
4. King, John E. (2016). "Book review: Anwar Shaikh, Capitalism: Competition, Conflict, Crises".
The Economic and
Labour Relations Review. 27 (4): 548–553. doi:10.1177/1035304616677488(https://doi.org/10.1177%2F103530461
 6677488).
5. New Economic Thinking (2016-02-17),Capitalism: Competition, Conflict, Crisis(https://www.youtube.com/watch?v=l
TDei-dAKW8), retrieved 2017-03-02
6. Capitalism: Competition, Conflict, Crises(https://global.oup.com/academic/product/capitalism-9780199390632?cc=u
s&lang=en&). Oxford University Press. 2016-02-12.ISBN 9780199390632.

External links
Anwar Shaikh home page(with full publication list)
Anwar Shaikh publications indexed byGoogle Scholar
"Anwar Shaikh". JSTOR.

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