Robert Vienneau: Thoughts Economics

1.0 Introduction This post is an attempt to work through some linear algebra that some have used to understand Karl Marx's Capital. I have recently explained how, in a simple model, prices of production are equal to labor values if the organic composition of capital does not vary among industries. That special case is the setting of volume 1. In capitalism, workers rent themselves out to their employers. They work longer, under the dominion of capital, than needed to produce the...

Economists proved over half a century ago that certain stories are unfounded in the theory. For example, one might think that if some workers are involuntarily unemployed, a drop in real wages would lead to a tendency for the labor market to clear. The Cambridge Capital Controversy revealed some difficulties. In response, some economists turned to the Arrow-Debrue-McKenzie model of intertemporal equilibria in which it is not clear that one could even talk about such concepts. The...

Solidarity Federation Francisco Nunes-Pereira and Mário Graça Moura. On the survival of a flawed theory of capital: mainstream economics and the Cambridge capital controversies, Cambridge Journal of Economics. Concludes mainstream economists continue to use flawed aggregate production functions because of an instrumentalist methodology and conformism. . Colin Rogers. Whitehead’s fallacy of misplaced concreteness and the unfortunate uselessness of all monetary-macro theory micro-founded...

1.0 Introduction A simple labor theory of value holds in two special cases. The rate of profits in the system of prices of production is zero. The vector of direct labor coefficients is an eigenvector of the Leontief input-output matrix corresponding to the maximum eigenvalue. I do not know if I've worked through this alone before. A more rigorous approach would prove the uniqueness of the solution. 2.0 The Setting Suppose a capitalist economy is observed at a given point in time. n...

Pablo Picasso's Guernica This post has long quotations, as is typical of a commonplace book. Where did socialism work? In Barcelona, Spain, and, more generally Aragon and Catalonia, from August 1936 to April 1937. This was the anarchist version, and was resisted by all governments, including the Soviet Union. The right staged their coup against the Republic in July 1936. Orwell went to Spain in December, and he wanted to kill fascists. He describes it as almost happenstance that he...

Figure 1: Variation in the Economic Life of a Machine with Technical Progress This post varies the coefficients of production in an example from Bertram Schefold. I wanted to have 'nice' fractions at a time of zero. Qualitatively, this looks like a previous post. Reviewers for a recent rejection of an article with another fixed capital example objected to this type of model. I need to relate technical progress to a well-known type (Harrod-neutral, Marx-biased, or whatever) or produce some...

Many to the left of liberals, that is, socialists, communists, and anarchists of various stripes, were opposed to the Soviet Union since its founding. Another example is Bertrand Russell. This is from the preface to his The Practice and Theory of Bolshevism, first printed in November 1920: "The Russian Revolution is one of the great heroic events of the world's history. It is natural to compare it to the French Revolution, but it is in fact something of even more importance. It does more...

Figure 1: Variation in the Economic Life of a Machine with Technical Progress I have invented graphs for visualizing how the analysis of the choice of technique varies with perturbations of parameters in models of prices of production. This post presents some examples of one type of diagram. One must click on a link with each graph, I guess, to fully understand what is being depicted. Figure 1 is an extension of an example from Betram Schefold (21 May 2020). This example concerns...

Some recent papers by economists of the Austrian school rediscover some aspects of post-Sraffian price theory. Others would benefit from more knowledge of post-Sraffian price theory. But the authors do not know this. Fillieule (2007) is a rediscovery of Sraffa's standard commodity. He sets out a special case of Hayekian triangles in which an infinite series of datad labor inputs are used to produce current net output. "Only circulating capital is taken into account", and "the proportion...

Figure 1: A Two-Dimensional Parameter Space The above is for this example. I wish somebody would be inspired by this to write it up with mathematical proofs. What I see here is found by numerical methods. Figure 1 shows a partition of the parameter space based on fluke switch points. The dashed line shows the temporal path in the previous post. Each of the solid lines are parallel affine functions, with a slope of unity. A proof that these slopes are unity should be able to handle a model...