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Robert Vienneau

Articles by Robert Vienneau

A Fixed Capital System That Is Or Is Not Interlocked

2 days ago

I have defined patterns of switch points in considering perturbations of examples of the choice of technique.
For example, I have defined three-technique and four-technique patterns.
An obvious extension is to consider how these patterns arise in models of joint production.
A simplification is to only consider models of fixed capital without superimposed joint production.

This post lays out an example in which, maybe, some parameter values can lead to a three-technique pattern.
I am trying to consider whether I want to allow it to be an interlocked system.
The question arises when I lay out a simple example in which a machine can be used for one or two years.

Accordingly, consider an example with the coefficients of production in Table 1. Corn and new machines are finished goods.

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A Bowles Taxonomy For Economists

8 days ago

[embedded content]Katzner, Bowles, and Resnick on UMass Amherst
Shartly after about 32:30 minutes, Sam Bowles, to laughter, draws a Venn diagram on the board. This is a light talk, and Bowles is explicitly describing
economics from his own experience at the University of Massachusetts at Amherst. Bowles places various economists in various subsets.
I have varied the names a bit in my reproduction below.

Bowles’ Taxonomy
I take the universe to be the set of all economists. Or, maybe, given Bowles includes John Rawls, it is a set of academics concerned with topics
Bowles thinks economists should be concerned with. I take it that this taxonomy is not to apply to all time and space, but maybe only to academics
from about 1970 to now. I explicitly added Kenneth Arrow, Milton Friedman, and

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Economics Of Race And Other Economics For Others

14 days ago

Do economists have anything to say about racism in the United States? Some do.
The Review of Black Political Economy, for example, exists.

Other groups in the United States are often thought of as marginalized.
I have written about
women in economics
As usual, I want to mention the existence of the
International Association for Feminist Economics
and their journal
Feminist Economics.
I also note the existence of
Queer Economics: A Reader
for those economists that might be of a questioning bent.

Discourse in many academic disciplines about the Other often draw on post-modernism, post-structuralism,
and other scary stuff. Some economists have attempted to extend Marxism to engage with postmodernism.
Although I have read a bit of
David Ruccio and Jack Amariglio,
I do not know

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Some Positions Some Take On Sraffa’s Book

20 days ago

This post lists some views on Production of Commodities by Means of Commodities: A Prelude
to a Critique of Economic Theory.

The quantity flows Sraffa takes as given are those observable in an actual economy at a given time, as with a snapshot (Roncaglia 1978).
These quantity flows, on the contrary, are at the level of effectual demand (Garegnani 1990).
These quantity flows are for an economy in a self-replacing state.
The assumption of constant returns to scale is necessary for drawing any interesting conclusions from Sraffa’s work (Samuelson 1990, Samuelson 2000).
Market prices tend towards or orbit around Sraffa’s prices of production in a process akin to gravitational attraction (Garegnani 1990).
Sraffa’s book is an investigation of logical consequences in a system of prices of

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A John Eatwell Lecture

22 days ago

[embedded content]John Eatwell On Why Economists Disagee
I like the above lecture by John Eatwell. He concludes by talking about the
partial equilibrium model of supply and demand "that we teach, and we justify it by the general equilibrium model".
He notes that lots of economists
put imperfections in.
The Arrow-Debreu is currently the fundamental model of price theory among mainstream economists.
According to Eatwell, economists fall into
at least five groups.

Those who think revisions are important to retain market rationality and try to find ways to make the model work, for example, with representative agents in Dynamic Stochastic General Equilibrium models.
Those who think reasonable, empirically-based imperfections can be used to produce practical models.
Those who find things that

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A Letter To Sraffa Long Before Google

26 days ago

At this time, the book had long ago been published by Cambridge University Press. I suppose I ought to review
whatever conditions exist on transcribing stuff in the archives. The following is D3/12/111:9.

Routledge & Kegan Paul Ltd.

October 15th 1969

Professor Piero Sraffa,
Trinity College,

Dear Professor Sraffa,

At the Frankfurt Book Fair last week, Einaudi told me about your "Produzione di merci a mezzo di merci".

I don’t know whether this has been published in English, but if not, we would be very interested in publishing it.

Yours sincerely,

Norman Franklin

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Extracts From LBJ Announcement Of The Appointment Of The Kerner Commission

June 2, 2020

My fellow Americans:

We have endured a week such as no Nation should live through: a time of violence and tragedy.

For a few minutes tonight, I want to talk about that tragedy – and I want to talk about the deeper
questions it raises for us all.

I am appointing a special Advisory Commission on Civil Disorders.

Governor Otto Kerner, of Illinois, has agreed to serve as Chairman, Mayor John Lindsay, of New
York, will serve as Vice Chairman…

The Commission will investigate the origins of the recent disorders in our cities. It will
make recommendations – to me, to the Congress, to the State Governors, and to the Mayors –
for measures to prevent or contain such disasters in the future.

But even before the Commission begins its work; and before all the evidence is in, there

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More On A Fixed Capital Example

May 21, 2020

Figure 1: A Partition of a Parameter Space for the Schefold Example1.0 Introduction

I want to revisit a perturbation
analysis of
from Bertram Schefold, of reswitching with fixed capital.

Suppose workers use a machine to produce something or other, where the machine lasts several production periods.
It is a possible choice to run the machine for less than its full physical life. One might
think than choosing to adopt a technique with a longer economic life of the machine is, in some sense,
more capital-intensive than choosing to junk it sooner. And this will lead to more output per worker.
But, I am surprised to say, this is just not so. The underlying vision of Austrian-school economists
is wrong even here.

If I worked through all the problems, with full understanding

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Financial Economics

May 9, 2020

This is a list of some of what I think one should know if one wants to talk to investors interested in theory.
This post is not about making money and is probably not up-to-date. My references are fairly popular, and mostly old.
I include one recent popular book as an example. Most of the references I do not recall very well, and I have
not read Ben Graham. But many seem to know that Warren Buffet recommends this book. This post is non-critical.
Keen and Quiggin in Debunking Economics and Zombie Economics, each have a chapter of criticism.

Behavioral finance: The application of behavioral economics to finance.
Beta: A parameter in the CAPM.
Black Scholes formula: A formula for pricing options.
Capital Asset Pricing Model (CAPM): A model that relates the risk of an asset to the market as

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May 7, 2020

A podcast interview with Philip Mirowski about how, roughly, neoliberals are exploiting the Corona Virus crisis in America.
A book, Nine Lives of Neoliberalism, edited by Dieter Plehwe, Quinn Slobodian, and Philip Mirowski. Somewhere this is or was freely downloadable in PDF.
A podcast interview with Marshall Steinbaum about the Chicago school of economics.
A podcast episode, by two economics professor, trying to present an overview of Joan Robinson.
A downloadable book, Labour and Value: Rethinking Marx’s Theory of Exploitation, by Ernesto Screpanti.
Two young friends discuss Steve Keen’s book, Debunking Economics.

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A Refutation Of Austrian Capital Theory And Austrian Business Cycle Theory

May 2, 2020

1.0 Introduction

I have not posted about a non-fluke switch point in a while. This
is an example from Bertram Schefold. I have
and variations
of this example before.

Here I present an example with tables exhibiting arithmetic. Is this any more transparent
than examples presented with

I have been listening to some lectures on YouTube, especially Richard Wolff. I now have
another hypothesis why mainstream economists
have been promoting lies, ignorance, and nonsense for half a century: fear.
The history of economics includes
Maybe many mainstream economists are
by their rulers.

2.0 Technology

Three processes are available for use in production. Each process is specified by coefficients of production (Table 1), when

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Old Findings For New Times

April 25, 2020

From John Kenneth Galbraith’s The Affluent Society (1958), I know that widespread attitude to waged
work among some in the United States is outdated. The conventional wisdom is that work is necessary
because it is needed to produce the goods that sustain society. That was largely true before productivity
increased so much, for example, in the post war golden age. Some jobs are still essential, by any narrow definition, but much
wage work goes to creating goods and services that in any previous society would have been
considered useless luxuries. (As I get older though, I disagree with Galbraith about medicines
to improve peristalsis.) But waged work, in the current system, is essential for providing the
income needed to sustain the demand to keep the system going.

From Paul Davidson

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A Fluke Switch Point On The Wage Frontier

April 16, 2020

Figure 1: A Switch Point On The Wage Frontier with Wage Curves Tangent
This post extends the example in my
article in
Structural Change and Economic Dynamics, suitably

Figure 2 shows an enlargement of part of the parameter space. The parameters of the point where the boundaries of
Regions 1, 2, and 3 intersect are shown.
In Region 1, the Beta technique is uniquely cost-minimizing for all feasible wages; there are no switch points.
Region 2 is a reswitching example, with Beta cost-minimizing at low and high wages. One switch point exists
in Region 3, with the Beta technique cost-minimizing at low wages.

Figure 2: Part of Parameter Space
The boundary between Regions 1 and 2 is tangent to the boundary between
Regions 1 or 2 and Region 3. In what I am calling a reswitching

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A Fluke Case With Two Fluke Switch Points

April 9, 2020

Figure 1: Switch Points On The Axis For The Rate Of Profits And At r = -100 Percent
This is an example of a fluke case in the analysis of the choice of technique. The interest in flukes, for me, is that
they show how the characteristics of markets can change. They provide insight into structural economic dynamics, as Luigi
Pasinetti calls it.

I have previously shown a fluke case, with
a switch point on the axis for the rate of profits with a real Wicksell effect of zero. A perturbation of the example can lead to
a reswitching example. The switch point at a wage of zero (when the workers live on air) then becomes one at a positive wage.
And around that switch point, a higher wage is associated with cost minimizing firms hiring more workers to produce a given
net output.

In the

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A Market Algorithm

April 3, 2020

Figure 1: Specification of a Market Algorithm1.0 Introduction

This article is heavily based on Bidard (2004).

An approach to the analysis of the choice of technique, in keeping with construction of the outer envelope of wage curves,
is to consider replacing processes, more or less, one at a time.
This post presents this approach as following an algorithm.

Assume that a set of techniques exist where all techniques are at least viable, indecomposable, and produce the same set of commodities. From the set of techniques, one can form a set of processes. In each process, workers produce a single commodity at the end of the year from certain inputs. The inputs, by assumption, are totally consumed in the course of the year. I also assume that the numeraire is specified.

Consider the

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Another Example Of The Factor Price Frontier In The Space Of Rental Prices

March 28, 2020

Figure 1: Real Factor Price Frontier1.0 Introduction

I am planning on posting at an even slower rate for a while.

This post continues my exploration of a way of visualizing the choice of technique proposed
by Carlo Milana.
In this post, I show how to correctly apply his visualization to
an example from my 2017 ROPE paper.

2.0 Technology

Two techniques are available for producing corn, the consumption good. Each technique consists of a flow-input, point-output
technology, with a finite number of dated labor inputs. The technology can also be represented with intermediate
produced commodities explicitly shown.
Table 1 sets out the example as a Leontief input-output table, in some sense.
Each column lists the inputs in a production
process needed to produce a unit output of the

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On “Democratic Socialism”

March 14, 2020

1.0 Introduction

This post is about some usages of the phrase
"democratic socialism".

2.0 Democratic Socialists of America (DSA)

In the context of current American politics, I think the most salient usage
today of this phrase is associated with Bernie Sanders’ campaign and
with the Democratic Socialists of America.

DSA was founded in 1982
when the Democratic Socialist Organizing Committee (DSOC) merged
with the New American Movement (NAM). The DSOC was established
with Michael Harrington leading others out of the
Socialist Party (SP)
(Gorman 1995: p. 144-145). Apparently, 500 people attended
the DSOC founding convention in 1973 (Harrington 1988: 17).

Michael Harrington will forever be known for The Other America.
In this book, he deliberately did not use the word "socialism". And

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Two Propositions: Neoclassical Economics Is Incoherent; A Classical Theory Of Value Exists

March 7, 2020

[embedded content]Some Mathematics Useful In Understanding Classical Political Economy
I consider the following to have been well established about half a century ago:

Marginalism or so-called neoclassical economics is impossible to formulate consistently and with practical applications.
A mathematically rigorous approach to the classical theory of value, from William Petty through David Ricardo,
including Karl Marx, exists.

Mainstream economists ignore the truth of both propositions. Until they stop spouting lies and nonsense, these propositions should be re-iterated again and again.
(On the other hand, I appreciate the work involved in compiling
National Income and Products Accounts.)

I find a difficulty in publishing re-iterations of these propositions. I expect editors and

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Update To Example In Vienneau (2019)

February 23, 2020

Maybe this post should be titled "Erratum" or "corrigendum". I have an example in my paper last year in which wage frontiers are supposed
to vary with two parameters. One is the markup in the "iron" industry. And the other is σ t. The example should be
as in Table 1. All the theory and the visualizations in the paper work out with this example.

Table 1: Technology for Producing Steel and Corn
InputIndustryIronCornAlphaBetaLabora0,1 = 1aα,0,2(t) = (5191/5770) e(1/10) – σ taβ,0,2 = 305/494Irona1,1 = 9/20aα,1,2(t) = (1/40) e(1/10) – σ taβ,1,2 = 3/1976Corna2,1 = 2aα,2,2(t) = (1/10) e(1/10) – σ taβ,2,2 = 229/494
Vienneau, Robert L. 2019. Structural economic dynamics, markups, real Wicksell effects, and the reverse substitution of labor.
Structural Change and Economic Dynamics 50: 216-226.

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February 20, 2020

John Weeks
Joan Robinson’s contributions to the Cambridge Capital Controversy (CCC).
from 2006, on Daily Kos, about one of my attempts to explain the CCC.
A post,
from 2016, on Naked Capitalism about how the CCC shows microeconomics is all wet.
J. W. Mason has a
explaining a definition of
Doyne Farmer, Fotini Markopoulou, Eric Beinhocker, and Steen Rasmussen, in an essay in Aeon,
Collaborators in creation,
provide an overview of complexity economics.
An overview, from 2018, about how women were deliberately kicked out of software development in Great Britain.

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Universal Basic Income: Some Advocates And Analysts

February 15, 2020

"In fact, the realm of freedom actually begins only where labour which is determined by necessity
and mundane considerations ceases; thus in the very nature of things it lies beyond the sphere of
actual material production. Just as the savage must wrestle with Nature to satisfy his wants,
to maintain and reproduce life, so must civilised man, and he must do so in all social formations
and under all possible modes of production. With his development this realm of physical necessity
expands as a result of his wants; but, at the same time, the forces of production which satisfy
these wants also increase. Freedom in this field can only consist in socialised man, the
associated producers, rationally regulating their interchange with Nature, bringing it under their
common control, instead of

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Reswitching With Markup Pricing And Fixed Capital

February 8, 2020

Figure 1: Two Dimensional Pattern Diagram1.0 Introduction

This post extends an example from Bertram Schefold. It presents markup pricing in an example with a machine that can be operated for two years
or junked after one year. This is a case of joint production in which, unlike in
some cases,
the choice of technique can still be analyzed by the construction of the wage frontier. Also, I do not think the question of
requirements for use enter in here, and all matrices are square.
As usual, this is a proof that "the marginal productivity theory of distribution" (and the neoclassical theory of
supply and demand) "is all bosh" (Robinson 1961).

2.0 Technology

Table 1 shows the coefficients of production for the three processes comprising the available technology. Inputs must
be available

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Precursors of Piero Sraffa

January 31, 2020

I want to consider contributions to economics after 1870 that reconsidered classical or Marxist
economics, used input-output models and linear algebra, or bear a family resemblance to
at least some points in Sraffa’s 1960 book.

Vladimir K. Dmitriev. Used input-output analysis in an interpretation of Ricardo’s
theory of value.
Ladislaus Bortkiewicz. Had a simple three-good model, with one basic good,
input-output model of prices of production. Sraffa and others argued against
aspects of his interpretation of Marx’s theory of value.
Georg von Charasoff. Apparently, around 1909 and 1910, he came up with the concept of
"original capital". In a infinite series, much like Sraffa’s reduction to dated
labor, the capital goods needed more and more indirectly in
producing some given net output

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Why Does The Labor Theory Of Value Work Empirically As A Theory Of Prices?

January 25, 2020

[embedded content]Anwar Shaikh On The Transformation Problem
Lots of empirical work shows that prices tend to be proportion to the labor embodied in commodities. My references in this
document this claim. Furthermore, empirical wage-rate of profits curves tend to be close to straight lines.
This is not what, say, Sraffa’ mathematical economics would lead me to expect. What explains these
surprising empirical findings?

Almost 34 minutes in, in the above video, Shaikh makes the above point about the contrast
between theory and empirical findings. He concludes with speculation, including with
comments on Bertram Schefold’s work with input-output matrices formed out of random

I offer some speculations myself in this post. I do not have much theory to back these

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Only The Super-Rich Can Save Us!

January 18, 2020

Neoliberals are hostile to labor unions and every other institution that would allow the vast majority of the population
to have some effect on how we are ruled.
And they have been so successful that
only the super-rich can save us, as the title
of a Ralph Nader novel a few years back had it. A couple of recent examples of journalism are about movements
of the super-rich:

Sheelah Kolhatkar writes, in the New Yorker, about Patriotic Millionaires.
Theodore Schleifer writes, in Vox, about Resource Generation.

I suspect most of the super-rich, however, are vicious, reactionary fools. Apparently,
Benjamin Page, Jason Seawright, and Matthew Lacombe provide
evidence in their recent book,
Billionaires and Stealth Politics.
I’ve read and
commented on their previous working paper.

In the

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Towards the Derivation of the Cambridge Equation with Expanded Reproduction and Markup Pricing

January 11, 2020

I have a new working paper.

Abstract: Does the Cambridge equation, in which the rate of profits in a steady state is equal to the quotient
of the rate of growth and the savings rate out of profits, hold in an economy with widespread non-competitive markets?
This article presents a multiple-good model of markup pricing in an attempt to answer this question. A balance equation
is derived. Given competitive conditions, this model can be used to derive the Cambridge equation. The
Cambridge equation also holds in a special case of markup pricing, with one capital good and many
consumption goods being produced. No definite conclusions are reached in the general case.

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The Factor Price Frontier In The Space Of Factor Rental Prices

January 7, 2020

Figure 1: Real Factor Price Frontier1.0 Introduction

Carlo Milana has proposed
a new way of visualizing the choice of technique, including in the case
of reswitching. This way of describing what he has done is not neccessarily
how he thinks of it.
In this post, I describe his approach with a reswitching example, in a model
of the production of commodities by means of commodities.

2.0 Technology

Table 1 shows the coefficients of production for this example.
Coefficients of production specify inputs per unit output.
Each process takes a year
to complete. Inputs are totally used up in the production of the outputs.
(This example is taken from one of my papers.)

Table 1: Coefficients of Production for The Technology
InputSteel IndustryCorn IndustryAlphaBetaLabor1275/4641

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Some People Who Have Shaped Economics

January 2, 2020

"The University [of Chicago] is the best investment I ever made in my life." — John D. Rockefeller

Consider the following people and selected activities:

Lewis Brown founded the American Enterprise Institute, in 1938.
Jasper Crane cofounded the Foundation for Economic Education, in 1946.
Leonard Read cofounded the Foundation for Economic Education, in 1946.
Harold Luhnow, even before 1947, directed spending for the Volker Fund.
Sir Antony Fisher funded the Institute for Economic Affairs, around 1956.
Lord Ralph Harris, first general director of the Institute for Economic Affairs.
Arthur Seldon, first editorial director of the Institute for Economic Affairs.
F. A. Harper founded the Institute for Humane Studies, in 1961.
Charles Koch funded the development of the Virginia school,

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January 1, 2020

I study economics as a hobby. My interests lie in Post Keynesianism, (Old) Institutionalism, and related paradigms. These seem to me to be approaches for understanding actually existing economies.The emphasis on this blog, however, is mainly critical of neoclassical and mainstream economics. I have been alternating numerical counter-examples with less mathematical posts. In any case, I have been documenting demonstrations of errors in mainstream economics. My chief inspiration here is the Cambridge-Italian economist Piero Sraffa.In general, this blog is abstract, and I think I steer clear of commenting on practical politics of the day.I’ve also started posting recipes for my own purposes. When I just follow a recipe in a cookbook, I’ll only post a reminder that I like the recipe.Comments

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2019 Nobel Prize Celebrating The Triumph Of Institutionalism?

December 26, 2019

[embedded content]Elizabeth Warren Echoing A View Institutionalists Understand
This year, the "Nobel prize" in economics went
to Abhijit Banerjee, Esther Duflo, and Michael Kremer. They champion empirical economics over theory. Previously, institutionalist
economics was described as ‘theory without measurement’ (Koopmans 1947). Does
institutionalist economics
parallel the supposed
mainstream empirical turn?

Although institutionalists, as far as I know, did not have the resources to create
randomized control trials (RCTs), they did collect and analyze statistical data.
I think especially of
Wesley Clair Mitchell
and the National Bureau of Economic Research (NBER).

Institutionalists was not atheoretical, I think. They developed qualitative analytical concepts.
I think of C. E. Ayres

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