Post-Keynesian

Figure 1: A Wage Frontier With Two Fluke Switch Points This post is a rewrite of this, without the attempt to draw a connection to structural economic dynamics. This post presents an example with circulating capital alone. Table 1 presents the technology for an economy in which two commodities, iron and corn, are produced. Managers of firms know of one process for producing iron and two for producing corn. Each process is specified by coefficients of production, that is, the required...

Socialism became a mass movement in many European countries about the time of the heyday of the Second International. Many leaders of these movements and those struggling for leadership produced works of scholarship, albeit often with an activist spirit. I think of, for example: Eduard Bernstein. The Preconditions of Socialism and the Tasks for Social Democracy. Nikolai Bukharin. The Economic Theory of the Leisure Class. Richard B. Day and Daniel F. Guido (eds.). 2018. Responses to...

1.0 Introduction In a common model, probability theory assigns a number between zero and one to events. But some events cannot be assigned a probability, even zero. Nobody understands probability, in some sense. This post is not about economics, although these ideas do have an application in mainstream economics. It is not at all novel. This is one of my favorite proofs in all of math, typically taught sometimes after an introductory mathematical analysis class. My undergraduate class in...

1.0 Introduction A question has arisen elsewhere. Why, except for an interlude during the post war golden age, has a nineteenth century orthodoxy dominated economics departments and treasury departments around the world? Here I do not investigate the details of this orthodoxy or if it does dominate. 2.0 An Authoritarian Point of View Some people believe that some are better than others. They want to live in a world where those at the top tell those below what to do, and those below jump....

[embedded content]An Experiment in Game Theory Game Theory provides a formal treatment of well-specified situations in which the outcome depends on the choices of several agents who may have conflicting interests. Abstractly, a player chooses a strategy, where a strategy specifies the player's move in every situation that may arise in the game. For example, a strategy for white in chess specifies, roughly white's move for every board configuration in which it is his turn. This example is...

William Petty began classical political economy in the 17th century. Classical economics was developed through the work of the physiocrats and such writers as Adam Smith, David Ricardo, and Karl Marx. Marx was also a critic. About a century and a half ago, economists mistakenly accepted the marginal revolution. Jevons, Menger, and Walras had precursors, but they were regarded as cranks. Marx, however, posed a political problem. Some might mention Henry George here, or maybe even Silvio...

Anton Pichler, Marco Pangallo, R. Maria del Rio-Chanona, François Lafond, and J. Doyne Farmer have an article Forecasting the propagation of pandemic shocks with a dynamic input-output model. This is a non-equilibrium, simulation model applying Leontief's input-output analysis. I suppose this is applied Sraffianism. For the use of Leontief input-output models in modeling natural disasters, one could do worse than look at the work of Adam Rose. Steve Keen responds to this year's Nobel...

I have found a common misrepresentation from many, including mainstream economists, is that critics of their models do not understand them or the role of the assumptions. Those mainstream economists rely on an incoherent essay from Milton Friedman to dismiss criticism of the realism of assumptions. My favorite criticism, though, is that their conclusions do not follow from their assumptions. I like to show this by constructing numerical examples that contradict their teaching. On the...

[embedded content]Richard Wolff Interviews George DeMartino (About 15:15)George DeMartino's The Tragic Science: How Economists Cause Harm (Even as They Aspire to do Good) Stanford Encyclopedia Philosophy entry on analytical Marxism. One version of Marx-Engels Collected Works at the Antonie Pannekoek Archive. Maybe I should order Ludo Cuyvers' Neo-Marxism and Post-Keynesian Economics: From Kalecki to Sraffa and Joan Robinson

Empirically, prices are fairly close to proportional to labor values. But that is neither here nor there as far as the correctness of Marx's theory of value. To see that, you have to get to the last footnote in chapter 5 of Capital. (Most "refutations" of Marx are based on ignorance of the first few pages of chapter 1.) From the foregoing investigation, the reader will see that this statement only means that the formation of capital must be possible even though the price and value of a...