Robert Vienneau: Thoughts Economics

Carlo Milana has posted a paper on arXiv. I was prepared to accept this paper's claims. Economists have developed price theory. Referring to Sraffian "paradoxes" and "perverse" switch points is a matter of speaking. There does not exist separate Sraffian and neoclassical versions of price theory. For a result to be "perverse", it need only contradict outdated neoclassical intuition. But it is as much a part of the mathematical economics as any other result. (It is another matter that much...

[embedded content]Young Children Policing Group Members This post presents examples of psychologists inducing stress in experimental subjects, some showing why we need Institutional Review Boards (IRBs). Some of the older studies involved so much suffering that experimental subjects suffered Post-Traumatic Stress Disorder (PTSD). I recall that at the end of the 1976 movie, The Tenth Level, about the Milgram experiment, starring William Shatner, the scientists are discussing what they would...

This post is about the misrepresentation of Sraffian capital theory in Lewin and Cachanosky (2019). I cannot recommend this short book. Presumably, it is meant as an introduction. But I do not see it as succeeding. I do not see what a more advanced audience would get out of it that is not available in a few recent papers by Lewin and Cachanosky. Before proceeding to my main theme, let me note that I agree with some parts of this book, mainly where Lewin and Cachanosky draw on Ludwig...

Figure 1: APP Around Switch Points1.0 Introduction I take it that the Austrian theory of the business cycle builds on Austrian capital theory. The following two claims are central to Austrian capital theory: Given technology, profit maximizing firms adopt a more capital-intensive, more roundabout technique at a lower interest rate. The adoption of a more roundabout technique increases output per worker. Originally, Eugen von Böhm-Bawerk proposed a physical measure of the average period...

Those who understand price theory reject the theory of the Austrian Business Cycle (ABC). I am thinking here that its logical invalidity follows from post-Sraffian capital theory. It is also wrong because of its reliance on the concept of the natural rate of interest. Some years ago, I tried to get published a demonstration that ABC theory was in error. I forget how many journals rejected it. Four or five articles here are from this series of revisions. The rejections from the journals...

I have been thinking of posting a review of Quiggin's book, but this is not it. I suppose I should mention that I am in the acknowledgements. Jorge Besada raves at the Mises Institute. Peter Boettke on his blog. Tyler Cowen lists Quiggin's book in his current reading. Diane Coyle on her blog. David Gordon at the Mises Institute. Richard Holden at Inside Story. Arnold Kling on his blog. "hayekian" raves. Quiggin has a response to a couple of the above. By the way, he had a paper, in 1987,...

Figure 1: A Pattern Diagram Consider an example of the production of commodities, in which many commodities are produced within capitalist firms. Suppose two techniques are available to produce a given net output. These techniques use the same set of capital goods, albeit in different proportions. They differ in process in use for only one industry. Given the qualification about the same capital goods, generic (non-fluke) switch points are the intersection of the intersection of the wage...

The Growing Importance of Finance in the Post-War U.S. Economy As I understand it, Marco Rubio takes from Post Keynesians the idea that, during the post-war golden age, investment decisions were dominated by industrial firms. But now, they are dominated by financial corporations. This change has been accompanied by deleterious effects on economic growth, stagnant wages, and an upward shift in the distribution of income and wealth. The increasing importance of finance in the economy in the...

Ezra Klein writes about John Kenneth Galbraith's concept of countervailing power. Ingrid Kvangraven and Carolina Alves are busting myths about heterodox economics. I have written before about economics as a study of the reproduction of society. Ben Holland, of Bloomberg News, writes an article, Marco Rubio puts out a paper citing obscure left-wing economists. Rubio's position paper is here. I do not find, say, Wynne Godlay, Hyman Minsky, Mariana Mazzucato, and many proponents of Modern...

1.0 Summary of Defense Last month, Mike Munger purports to "summarize the basic argument for capitalism" (emphasis added). He acknowledges his argument is superficial. I find it excessively so. Munger argues that capitalism: Supports the division of labor Provides price signals so as to direct production appropriately Promotes economies to scale Ultimately, this defense is that capitalism delivers the goods. Here's a well-expressed, simple defense that, partially, argues along these...