Figure 1: Wages Curves for Example of Intensive Rent1.0 Introduction

This post modifies an example
from Antonio D’Agata.
Two types of land exist,
each specialized for producing a specific commodity.

In the example, some wage curves slope upwards, which is not possible in a model with circulating
capital alone. The cost-minimizing technique is not found from the outer frontier of the wage curves.
For one range of the rate of profits, no cost-minizing technique exists, even though a
feasible technique exists in that range with a positive wage and positive prices. If the wage
is taken as given, more than one cost-minizing technique exists in the range of wages
where a cost-minimizing technique exists.

This example does not illustrate variation in the order of rentability with
the wage

1.0 Introduction

Broadly speaking, the history of political economy contains
two approaches
to value and distribution. For purposes of this post, I do not distinguish between
classical and Marx’s political economy. Institutionalists and those who know about
German historical schools, for example, might have a complaint about being ignored.

This post is quite unoriginal. I thought I would just record these properties
of two approaches.

2.0 Marginalism

Marginalist economics is about the allocation of given resources among alternatives.
In marginalism, the theory of value and distribution is almost co-extensive with
economic theory. The givens, for the theory of value and distribution, are:

Endowments, including distribution of endowments among households.
Tastes or preferences of

I have thought about what would be the minimal structure of an example that
combines
extensive and intensive rent. I want to include a commodity produced without land, as well as an agricultural
commodity.

This post considers a simpler example. An analysis of extensive rent includes
the identification
of the order of efficiency and the order of rentability, given the wage or the rate of profits.
I take the concept of these orders from Alberto Quadrio Curzio.
Can these orders be defined in a model of intensive rent? What would the minimum structure
of an example be in which to explore this question? I continue to insist on including
an industrial commodity with negligible inputs of land.

I suggest Table 1 provides the technology for such an example. Each
column specifies the

John Cassidy on Donald Harris in the Mew Yorker.
Dean Dettloff on The Catholic case for communism in America.
Enrico Bellino and Gabriel Brondino, Circular vs. one-way production processes: two different views on production and income distribution, in Review of Political Economy. I want to recall this for my work on Hayekian triangles.
Bob Murphy and David Glasner on the Sraffa-Hayek debate. (They spend to much time on monetary policy before getting to the debate.)
Leland Yeager and Steve Hanke. 2024. Capital, Interest, and Waiting: Controversies, Puzzles, and New Additions to Capital Theory. I probably will not order this.
Pierangelo Garegnani. 2024. Capital Theory, the Surplus Approach, and Effective Demand. Appears to now be available.

Figure 1: Extensive Rent Example As Relative Market Power Varies Between Industry And Agriculture
This post is an elaboration on this past post.

The analysis of the choice of technique varies with perturbations of relative markups in industry
and agriculture. Figure 1 depicts this variation, while Figure 2 is an enlargement of the lower
range of the relative markup in industry. The heavy solid lines in Figure 1, other than the
horizontal line at the top, are switch points on the inner frontier of the wage curves. They
divide the space into areas in which the cost-minimizing technique is labeled in bold. The dashed
lines are intersections on the outer frontier of the wage curves. The order of fertility varies
across dashed lines. The dotted lines are intersections of rent curves. The

The following is a list of publications I expect to see in the first volume of Sraffa’s
collected works:

Monetary inflation in Italy during and after the war (This is Sraffa’s dissertation).
The current situation of Italian banks. Manchester Guardian. 1922.
The bank crises in Italy. Economic Journal. 1922.
On the relations between cost and quantity produced. Annali di economia 1925. (I think an English translation is in the Cambridge Journal of Economics.)
The laws of returns under competitive conditions. Economic Journal. 1926.
Increasing returns and the representative firm. Economic Journal. 1930. (This is a symposium with Robertson and Shove.)
An alleged correction of Ricardo. Quarterly Journal of Economics. (with L. Einaudi).
Dr. Hayek on money and capital. Economic

Figure 1: Choice of Technique with Extensive Rent and Competitive Markets1.0 Introduction

I am making some slow progress on recreating
past
posts.
For variation, I here take the wage as given.

If I write this up more formally, I intend not to try to relate it to Marx’s concept of absolute rent.
The point is to illustrate the following comment with long-lasting variations in market power
between industry and agriculture:

"The complexity of the outcomes with the potential existence of conflict or concordance among
the three major economic categories (earners of wages, profits, and rents) profoundly modifies
the traditional analysis of profits
and wages." — Alberto Quadrio Curzio and Fausta Pellizzari. Rent, Resources, Technologies, Springer,2010: 34.

This story illustrates how the

This is another post for my commonplace book. It is extraordinary difficult to get a rational
explanation for the marginal revolution. Trying to imitate nineteenth-century physics seems
to be part of it.

"Marx implicitly assumes the the whole of social reproduction is mediated through the
exchange of commodities, including the reproduction of labor power, that is, the reproduction of
people themselves. We can view the labor that produces what productive workers consume as the labor necessary
for the reproduction of society and the labor that capitalists appropriate in the form of surplus value
as the surplus labor time of society, in the sense that only the necessary labor time would be
required to enable reproduction of people and productive facilities on the same scale.
Thus the

Here is a list of books by Marxists that have stood the test of time.
I am being impressionistic and probably idiosyncratic. I am more interested in analysis of what is than political organizing.
What should be added? Removed?

Frederick Engels, Anti-Dühring, 1877. I think German comrades learned Marxism during the second international more from this thick tome. I recommend other works for introductions these days.
Vladimir Lenin, What is to be Done?, 1902. Lenin lays out a strategy and defines a vanguard party. And the Bolsheviks are in power at the end of 1917.
Rosa Luxemburg, The Accumulation of Capital, 1913. Luxemburg argues that capitalism needs a less advanced sector (or maybe military purchases from the state) to provide demand. Growth paths can be defined by Marx’s scheme

This post is for my commonplace book. I have been reading
Enrico Bellino and Gabriel Brondino’s
"Circular vs. one-way production processes: two different views on production and income distribution"
(Review of Political Economy, 2024).

Bellino and Brondino draw a distinction between a circular model of production and
a one-way model. In the latter, a finite, dated series of non-produced inputs (for example, labor)
results in the production of the output. This dichotomoy is distinct from
the distinction
between a theory focusing
on the reproduction of society
and a theory focusing on the allocation of scarce resources.

Bellino and Brondino argue that, if subsistence wages enter into the costs of production,
the one-way model becomes a circular model of production.

The one-way model

Figure 1: Hayekian Triangles for The Two Techniques1.0 Introduction

This post is a variation on this one.

2.0 Technology and Net Output

Suppose technology is as characterized by the coefficients of production in Table 1.
All techniques are characterized by single production, no fixed capital, and no joint production.
In the Alpha technique, the first corn-producing process is operated. The second corn-producing
process is operated in the Beta technique. The ale-producing process is operated in both techniques.

Table 1: Regions
InputCorn IndustryAle IndustryProcess IProcess IIProcess IIILabor1 person-yr.275/464 person-yrs.1 person-yr.Corn1/10 kilo-bushels113/232 kilo-bushels2 kilo-bushelsAle1/40 kilo-liters1/200 kilo-liters2/5 kilo-litersOUTPUTS1 kilo-bushel1 kilo-bushel1 kilo-liter

Paul Kengor’s The Devil and Karl Marx: Communism’s Long March of Death, Deception, and Infiltration is a stupid and ignorant book.
Kengor is particularly keen to chronicle atheist attacks from Marx and communists on religion.

Juvenile Literary Works from Marx

Kengor starts with a poem that Marx wrote when he was 19. Marx envisions himself, I guess,
as a ferocious violin player, inspired by the devil. Apparently, Marx was a fan of Goethe.
Kengor never uses the phrase ‘sturm und drang’.
He goes on about some other poems and a play of Marx’s. Kengor thinks that Marxists unjustly ignore
these early works. They are in the first volume, though, of the Marx-Engels Collected Works.

Some Bits and Pieces from the Lives of Marx and Engels

The second section, after this prelude, is about Marx

1.0 Introduction

I resolutely am not commenting on unhappy current events.

Smith and Ricardo thought a (simple) LTV was not applicable to capitalism. Prices do not
tend to or orbit around labor values. At least that is their claim.

Ricardo had more to say about the LTV.

This argument is not new. Smith confined the LTV to a supposed "early and rude
state of society which precedes both the accumulation of stock and the appropriation on land" (WoN, book 1,
chapter 6; see also book 1, chapter 8). Ricardo thought this was sloppy reasoning.
The LTV does not become nonapplicable merely because of the accumulation of capital and of the
division of society into capitalists and workers (Principles, 3rd edition, chapter 1, section III).

2.0 Technology

A simple model of circulating

Hayek introduced his triangles in his lectures for his book Prices and Production. The first edition was
in 1931 and the second in 1935. He attempted a more general treatment of capital theory in
his 1941 book, The Pure Theory of Capital. I want to claim that Hayek knew that
he could not draw his triangles under these more general assumptions. And that
he knew that capital theory needed more development than he was able to give.

Jack Birner knows this, although I do not know a reference off-hand. I want to say that
Roger Garrison knows this too, that he presents his diagrams of trianlges in his 2001 book,
Time and Money: The Macroeconomics of Capital Structure, mainly
for their heuristic and pedagogical value. He says something like this in the following:

"…The widely recognized

Samuel Bowles on how "Marx’s representation of the power relationship between capital and labour in the firm is an essential insight"
Economics in the Rear-View Mirror on renewal of Paul Sweezy’s instructorship.
Manoucher Parvin, in 1992, asks, "Is teaching neoclassical economics as the science of economics moral?"
Alexander Douglas on micro-founded macro.
A review of Fredric Jameson’s new book, in Jacobin earlier this month.
A review of Fredric Jameson’s new book, in the September issue of Harper’s.

Figure 1: Wage Curves for the Two Techniques1.0 Introduction

Economists following the Austrian school often represent the structure of production with Hayekian
triangles (Hayek 1931, Rothbard 1962, Skousen 1990, Garrison 2001, Machaj 2017). Typically,
goods of the highest order are produced with unaided labor or other unproduced original resources.
(Fillieule (2007), in which a Hayekian triangle is constructed with an infinite stream of unproduced inputs, is an exception.)
Rarely, is a model of the production of commodities by means of commodities, as in Sraffa (1960), considered.
This post illustrates how to construct a Hayekian triangle with such a model, in the case with circulating capital.

It also illustrates how the use of such triangles to tell the stories that Austrian

The following are the first three paragraphs of the introduction
to the Wealth of Nations:

"The annual labor of every nation is the fund which
originally supplies it with all the necessaries and
conveniencies of life which it annually consumes, and
which consist always either in the immediate produce of that labour,
or in what is purchased with that produce from other nations.

According, therefore, as this produce, or what is purchased with
it, bears a greater or smaller proportion to the number of those who
are to consume it, the nation will be better or worse supplied with
all the necessaries and conveniencies for which it has occasion.

But this proportion must in every nation be regulated by two
different circumstances: first, by the skill, dexterity, and judgment
with which

This is more for my commonplace book. The first two quotations are part of a symposium with Morishima and Samuelson:

"This paper will suggest that the meaning of
the relationship between values and prices
described in Capital has been widely misunderstood.
Commentators as eminent as Mrs. Robinson
and Professor Samuelson have sought in the transformation
discussion issues which Karl Marx never
meant it to contain. Writers on ‘the transformation
problem’ since L. Bortkiewicz have focussed on an
issue that is largely peripheral; and others like E.
B6hm-Bawerk have asserted that there is a contradiction
between the analyses of Volumes I and III
which is certainly not to be found there unless lne
reads into them an interpretation different from
that which Marx repeatedly emphasized.

Many of my examples illustrate simple structures of production for models in which commodities are produced with commodities.
Economists following the Austrian school often illustrate the structure of production with Hayekian triangles.
Accordingly, this post illustrates a Hayekian triangle with a model in which commodities are produced out of commodities.
I consider the case in which only circulating capital exists. This post is a rewrite of
this one.

The following are taken as given for the technique in use:

A: The nxn Leontief input-output matrix in physical terms. Assume all commodities are basic and the economy is productive.
a0: The n-element row vector of direct labor coefficients.
d: An n-element column vector that is in the proportions in which commodities are consumed.

This is for my commonplace book.

"It is true that some lengthy or roundabout processes are physically efficient. But so are some short processes. Lengthy processes
are not physically efficient because they are long. Some, probably most, lengthy processes would be physically very inefficient,
for there are such things as spoiling or wasting with time.
With a given labour force there is a definite limit to the quantity of labour embodied in roundabout processes which can
be used to advantage. Apart from other considerations, there must be a due proportion between the amount of labour
employed in making machines and the amount which will be employed in using them. The ultimate quantity of value will
not increase indefinitely, relatively to the quantity of labour employed, as the

I have expressed an appreciation
before of the section in Capital on commodity fetishism.
Perhaps this section stands up
to a critique of Marx’s theory of value.

"But Marx had drawn a nightmare picture of what happened to human life under capitalism, when everything was
produced only in order to be exchanged; when true qualities and uses dropped away, and the human power of making
and doing itself became only an object to be traded. Then the makers and the things made turned alike into commodities,
and the motion of society turned into a kind of zombie dance, a grim cavorting whirl in which objects and people
blurred together till the objects were half-alive and the people were half-dead. Stock-market prices acted back
upon the world as if they were independent powers, requiring

1.0 Introduction

This post illustrates a derivation of prices of production, based on certain properties of duality
theory as applied to linear programming. I strive to be more concise and elementary
than previous expositions.
This exposition is based on John Roemer’s Reproducible Solution (Analytical Foundations of Marxian Economic Theory,
Cambridge University Press, 1981).

You will find no utility maximization or supply and demand functions below. I have no need for such hypotheses.
Nevertheless, one can read this derivation as consistent with marginalism.

2.0 Technology and Endowments

Two commodities, iron and corn, are produced in this example. Managers of firms know a technology consisting
of the processes defined in Table 1. Each column shows the inputs and outputs for a

I picked up the novel that the following quotation is from because I think I recall Kress participating in
conversations on Usenet years ago. This novel ended up more a political argument than I expected. It is
for Genetically Modified Organisms (GMOs), done right. We should rather strive for plants for food
resistant to insects, not resistant to pesticides, for example. I assume that Kress agrees with
her heroine.

"He had spent the two-week winter vacation from school, which somehow got extended to
nearly another week, with Jake in Los Angeles…

He left an eleven-year old nerd, dress in Levi’s, a tee that said CHESS PLAYERS HAVE
GREAT MOVES, and a baseball cap. He returned looking like a thirty-two-year-old
investment banker trying to be cool, dressed in a $300

1.0 Introduction

Where do prices come from in mainstream economics? As far as I know, some hard questions were raised half a century ago.
They still have not been answered, I gather.

2.0 No Agent Makes Prices

Consider competitive markets, as defined in marginalist economics for most of the twentieth century.
This implies that agents in the market take prices as given.

From Steve Keen, I know that if only a countable infinity of consumers and firms exist, the agents are
systematically mistaken. Despite their beliefs, they are not atomic, and their actions in varying quantities
bought or sold affect prices.
For agents not to be systematically mistaken,
an uncountable infinity of consumers and firms must
exist.

I have noted Emmanuelle Benicourt
making similar
points before.

Figure 1: Variation in the Cost-Minimizing Technique with Selected Coefficient of Production
This post reports on some work with
Steedman’s corn-tractor model.
I have yet to find an instance of triple-switching. I have found a case of reswitching, though.

Figure 1 above and Table 1 below show how switch points vary with perturbations of the labor needed to produce a bushel of corn
in the corn industry with Type I tractors. Only one switch point exists in region 1. Around this switch point a lower rate of
profits is associated with the production and use of Type I tractors, an increase in consumption per labor-year, and a
decrease in labor inputs in the corn industry per bushel produced. In other words, this switch point conforms to obsolete
marginalist intuition.

Table 1: Regions

Ludwig
Von Mises
expanded his erroneous 1920 essay into a book,
Socialism: An Economic and Sociological Analysis. The first
edition was published in 1922 and the second edition in 1932.

Since Von Mises is attempting to be more comprehensive, he treats
the socialist advocacy of free love in an early chapter.
Being au courant, he writes about Freud. He argues that the bourgeois
idea of marriage as a contract, binding on both husband and wife,
is an improvement on what came before.

But I find it hard to get beyond passages like those below.
Here, Von Mises confines women to her supposed role in
propagating the human race, as in Margaret Atwood’s The Handmaid’s Tale:

"The radical wing of Feminism, which holds firmly to this standpoint,
overlooks the fact that the expansion of woman’s

1.0 Introduction

I would like to illustrate triple switching, in
the corn-tractor model,
with one of my one-dimensional diagrams.
I have a triple-switching example,
from Bertram Schefold, but the wage-rate of profit frontier is not visually striking in it.
Such an example would not be worthy
of a research paper.
But perhaps I could modify a section of my
recent working paper
to submit somewhere. Besides, posing a new problem might motivate me to update my computing technology.

2.0 Technology

The corn-tractor model
is a fixed capital model, an adaption of
the Samuelson-Gargenani model.
Labor and tractors are used to produce new tractors. Labor and tractors are also used to produce corn.
Corn is the consumption good and the numeraire. Table 1 shows the coefficients of production for a

Louis-Philippe Rochon on Paul Davidson.
James Galbraith, Thomas Palley, and Matias Venengo on Paul Davidson.
The Economist on Donald Harris. Response in letters to the editor (Both behind paywall).
The Washington Post on policy advice from Donald Harris for Jamaica (Behind paywall).
Maybe I want to read Vanessa Wills’ Marx’s Ethical Vision, which may be in tension with views I have set out.
Gordon Katic on the insidious elitist upshot of behavioral economics.

A mistaken theory claims prices convey information about relative scarcities. Friedrich Hayek uses an example of tin.
According to this theory, a higher wage incentivizes investments in less labor-intensive techniques and to
shifting production towards less labor-intensive commodities. Likewise, a lower interest rate incentivizes
investments toward more capital-intensive techniques and to shifting production towards more capital-intensive commodities.

A number of attempts have been made to elaborate this theory and to formalize this vision:

One can measure capital-intensity by aggregating the prices of capital goods used, per person-year of labor employed, in producing a commodity.
Around switch points, a lower interest rate is associated with the adoption of a more capital-intensive

I have demonstrated that Von Mises fails
to identify problems with central planning.
This post merely documents Von Mises being mistaken.
He erroneously says that an economic decision cannot be made over
alternative methods of producing a given good,
without market prices for capital goods and resources.

"The director wants to build a house. Now, there are many methods
that can be resorted to. Each of them offers, from the point
of view of the director, certain advantages and disadvantages with
regard to the utilization of the future building..; each of them requires
other expenditures of building materials and labor… Which method should the director choose;
He cannot reduce to a common denominator the items of various
materials and various kinds of labor to be expended. Therefore