Post-Keynesian

Consider the introduction of new, advanced machinery into a capitalist economy. This will raise productivity and be good for the population as a whole. It will displace workers, at least temporarily, who were previously making the product of the machine with handicraft production or now obsolete machines with lower productivity. But the production of the machines requires workers too. So, ignoring short-run frictions, will the workers not remain as well off? David Ricardo believed...

Figure 1: The Wage Frontier for a Double-Fluke Switch Point This post is an expansion of a previous one. That post defines the technology and the price system for the three techniques conprising the technology. In Alpha, labor and corn inputs are used to produce corn. Beta and Gamma are more roundabout. In each, Labor and corn are first used to make a machine that lasts two years and can be used to produce corn each year. In Beta, the machine is discarded after being operated one year. The...

I take the following long quote from Bohm-Bawerk. "The entire sum of originary productive forces at Crusoe’s disposal … is a day’s labor which we shall assume to be a 10-hour workday… Let us assume that the fruit harvest [is] enough to enable our castaway to gather the subsistence minimum in nine hours a day, and enough in 10 hours to furnish him with adequate sustenance for complete health and vigor... Crusoe now has a choice between two lines of conduct. One alternative is ... to...

Figure 1: Triple Switching with Strucutral Economic Dynamics1.0 Introduction I have been using fluke switch points to partition two-dimensional slices of parameter spaces. I know, I think, how reswitching can appear and disappear. But I am confused how more switch points can appear. So this post is a start on exploring a triple-switching example. I have stumbled upon two examples of triple-switching, so to speak. I have not yet replicated Steedman's claim that triple-switching can arise...

Figure 1: A Larger Parameter Space This post is an expansion on the first example here. It presents shortly a more comprehensive analysis of the variation in the choice of technique in the example of circulating capital in Section 2. Local perturbations of two coefficients of production are examined there. Figure 1 partitions a larger part of the space defined by these two coefficients of production. Table 1 exhibits how the cost-minimizing technique varies with the rate of profits in each...

I take it for granted that marginalism became accepted partly because Marx had used the best in classical political economy in his account of why socialism would and should transcend capitalism. This post presents some who have argued for or asserted the same. I start by summarizing an argument from Antonia Campus. Campus argues that the marginalists in the 1870s did not have an accepted theory of production, cost, and price. Only in the 1890s did the marginal productivity theory of...

Figure 1: The Demand for Labor1.0 Introduction Wages and employment are not determined in competitive markets by the interaction of well-behaved supply and demand curves, as portrayed in much introductory economics. At least, no reason exists to thinks so. Every once in a while I like to recall that this is an implication of the Cambridge Capital Controversy. 2.0 Technology Consider a very simple competitive capitalist economy in which corn and iron are produced from inputs of labor,...

A 2019 profile of Stephen Marglin in the Harvard Crimson. William Morris, the author of News from Nowhere, wrote the Manifesto of the Socialist League. David O'Connell explains, in Jacobin, that Catholic orthodoxy is quite radical on the economy. Jack London's How I became a socialist.

Figure 1: A Parameter Space1.0 Introduction This is a re-creation and elaboration of a previous post. The analysis of the choice of technique, in models of circulating and fixed capital, can be based on the construction of a wage-rate of profits frontier. Given a technology in which requirements for use can be satisfied, prices of production for a feasible technique, including the wage, are uniquely determined by the given rate of profits. If the rate of profits is in a range where such...

I have been using fluke switch points to partition parameter spaces into regions. In each region, the analysis of the choice of technique does not qualitatively vary. Fluke switch points have been discussed in the literature on the analysis of the choice of technique. Mostly, these mentions dismissal fluke cases, on the correct grounds that they only occur at an accidental point in the parameter space. Here is a statement from one contribution to the famous QJE symposium: "Cases with...