The modern revival of the Classical surplus approach: implications for the analysis of growth and crises

Sraffian economics has recovered the surplus approach to the theory of value and distribution developed by the Classical economists and Marx, and later obscured by the emergence of marginalist economics in the second half of the 19th century. It has also laid the foundations for a robust capital-theoretic critique of the marginalist theory of distribution. By virtue of this twofold contribution, Modern Classical Theory (MCT), also known as the Classical-Keynesian approach, is well suited to absorb and reinforce the more revolutionary insights of Keynes’ legacy and to spur economic research in alternative and critical directions. The chapter suggests some implications for modern macroeconomics and the interpretation of the global and European crises. Given that the capital-theory controversy is illustrated by Fabio Petri’s chapter in this volume (Chapter 4), I will extend my own contribution considering some other heterodox approaches in the light of MCT. The chapter intends to stimulate interest in MCT especially in young scholars interested in heterodox economics.