Thursday , November 21 2019
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Robert Vienneau: Thoughts Economics

The Rate of Profits is Not the Scale Factor

Figure 1: Rate of Profits Unequal to Scale Factor for Rate of Profits This post continues the example in the previous post. I modify the prices equations so that the rate of profits in producing corn is (s1 r̂), and the rate of profits in producing ale is (s2 r̂). The solution to the price equations are: pcorn = 16 [16 + (s1 - s2) r̂]/[204 + (3 s1 + 9 s2) r̂] pale = 32 [10 - (s1 - 3 s2) r̂]/[204 + (3 s1 + 9 s2) r̂] w = 4 [51 - (9 s1 + 5 s2) r̂ - s1s2 r̂2]/[204 + (3 s1 + 9 s2) r̂]...

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An Example Of The Labor Theory Of Value

Figure 1: Variation of Prices of Production with Wages and Markups1.0 Introduction This post documents an example in my working paper, The Labor Theory of Value and Sraffa's Standard Commodity with Markup Pricing. 2.0 Technology Consider a simple economy in which corn and ale are each produced from inputs of labor, corn, and ale. Inputs for unit outputs are shown in the columns in Table 1. Obviously, the units of measure should not be taken serious. Inputs are totally used up in the...

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Keen’s Debunking Economics Most Popular Among Popular Critiques

Table 1: Selected Critiques AuthorBookNumberRatingsMeanRatingMoshe AdlerEconomics for the Rest of Us214Rod Hill & Tony MyattThe Economics Anti-Textbook134Steve KeenDebunking Economics, 1st edition253 to 4Debunking Economics, 2nd edition564 to 5Paul OrmerodThe Death of Economics103 to 4John QuigginEconomics in Two Lessons24John WeeksEconomics of the 1%134 to 5 Steve Keen seems to be the most popular of those writing internal critiques of economics directed towards the common reader. I...

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The Labor Theory of Value and Sraffa’s Standard Commodity with Markup Pricing

I have uploaded a working paper with the post title. Abstract: This article demonstrates relationships that are transparent in Sraffa's standard system hold even when relative rates of profit vary persistently among industries. Even with such variations, total constant capital, total variable capital, total surplus value, and the rate of profits are unaltered by evaluation at labor values and at prices of production in Sraffa’s standard system. These results buttress those who see in the...

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Actually Existing Socialism In A Capitalist Setting?

Elements of a post capitalist society are and have been developing in actually existing capitalism. This post points out a couple of examples. The Green Bay Packers is a community-owned (non-proper) football team in the National Football League (NFL). One can find some arguing that they are socialist. And some are concerned to refute this claim. Decades ago, some universities in the United States set up research and development organizations that then became independent, not-for-profit...

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Structural Economic Dynamics and Fake Switch Points

Figure 1: A Pattern Diagram with Joint Production1.0 Introduction This post completes an example. I analyzed bits of this example here and here. This post may make no sense if you have not read a long series of previous posts or, maybe, the papers highlighted here and here. I am interested in how and if my approach to analyzing and visualizing variations in the choice of technique with technical progress extends to joint production. The example suggests fake switch points do not pose an...

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Elsewhere

Here is a post from a blog devoted to cybercommunism. The blogger is glowing about Paul Cockshoot's work on refuting Hayek's supposed refutation of the possibility of a post-capitalist society. William Milberg writes about how it is becoming more common to use the word "capitalism", a word mainstream economists had mostly stopped using. Herbert Giants and Rakesh Khurana write about the corrupting effects of neoclassical economics on what is taught in business school and then practiced by...

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Variation in Standard Commodity with Relative Markups

I am not sure about the economic logic in this post. Maybe somebody like D'Agata or Zambelli could do something with this. These ideas were suggested to me by email with a sometime commentator. I start out with notation for Sraffa's price system, modified in an unusual way to allow for persistent variations in the rate of profits among industries: a0 is a row vector of labor coefficients in each of n industries. A is a Leontief input-output matrix, where ai, j is the quantity of the ith...

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A Fluke Case Over The Wage Axis

Figure 1: Wage Curves and The Price of Corn for the Fluke CaseIntroduction This post extends a previous post. I am basically introducing structural dynamics into an example, by Bidard and Klimovsky of fake switch points. At a rate of profits of zero in the example, the price of corn is zero for Alpha, one of the two techniques that is cost-minimizing there and for somewhat higher rates of profits. At a time before the fluke case, only the Gamma technique is cost-minimizing at a rate of...

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A Pattern Over The Wage Axis In A Case Of Joint Production

Figure 1: Wage Curves with Corn as Numeraire1.0 Introduction This post presents an example of a fluke switch point in which the choice of technique cannot be analyzed by the construction of the wage frontier. Under joint production, the technique that is cost-minimizing, for a given rate of profits, does not necessarily maximize the wage. Nevertheless, one can still see what I call a pattern over the wage axis in this case. The example is a generalization of the numerical example in...

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