Robert Vienneau: Thoughts Economics

Figure 1: Variation in the Cost-Minimizing Technique with Selected Coefficient of Production This post reports on some work with Steedman's corn-tractor model. I have yet to find an instance of triple-switching. I have found a case of reswitching, though. Figure 1 above and Table 1 below show how switch points vary with perturbations of the labor needed to produce a bushel of corn in the corn industry with Type I tractors. Only one switch point exists in region 1. Around this switch point...

Ludwig Von Mises expanded his erroneous 1920 essay into a book, Socialism: An Economic and Sociological Analysis. The first edition was published in 1922 and the second edition in 1932. Since Von Mises is attempting to be more comprehensive, he treats the socialist advocacy of free love in an early chapter. Being au courant, he writes about Freud. He argues that the bourgeois idea of marriage as a contract, binding on both husband and wife, is an improvement on what came before. But I...

1.0 Introduction I would like to illustrate triple switching, in the corn-tractor model, with one of my one-dimensional diagrams. I have a triple-switching example, from Bertram Schefold, but the wage-rate of profit frontier is not visually striking in it. Such an example would not be worthy of a research paper. But perhaps I could modify a section of my recent working paper to submit somewhere. Besides, posing a new problem might motivate me to update my computing technology. 2.0...

Louis-Philippe Rochon on Paul Davidson. James Galbraith, Thomas Palley, and Matias Venengo on Paul Davidson. The Economist on Donald Harris. Response in letters to the editor (Both behind paywall). The Washington Post on policy advice from Donald Harris for Jamaica (Behind paywall). Maybe I want to read Vanessa Wills' Marx's Ethical Vision, which may be in tension with views I have set out. Gordon Katic on the insidious elitist upshot of behavioral economics.

A mistaken theory claims prices convey information about relative scarcities. Friedrich Hayek uses an example of tin. According to this theory, a higher wage incentivizes investments in less labor-intensive techniques and to shifting production towards less labor-intensive commodities. Likewise, a lower interest rate incentivizes investments toward more capital-intensive techniques and to shifting production towards more capital-intensive commodities. A number of attempts have been made...

I have demonstrated that Von Mises fails to identify problems with central planning. This post merely documents Von Mises being mistaken. He erroneously says that an economic decision cannot be made over alternative methods of producing a given good, without market prices for capital goods and resources. "The director wants to build a house. Now, there are many methods that can be resorted to. Each of them offers, from the point of view of the director, certain advantages and...

In re-reading Robinson, I often find her succinctly summarizing a theory, often developed later. Here is a quotation from one of my favorite books by her: "The argument is sometimes advanced that evidence shows that, in reasonably prosperous countries, the percentage of unemployment is never seen to vary very much, averaging good times with bad, over the long run ... But even for prosperous countries the evidence is largely an optical illusion. Capitalist industry does not employ the...

The title claim is not surprising. But it occurs to me that it follows from how I model prices of production, given stable relative profit rates among industries. I am not original with this modeling. My contribution is analying the choice of technique and exploring how this analysis varies with perturbations of relative markups. In the price equations, s1r, s2r, s3r, and so on are the rate of profits in the various industries. I call r the scale factor for the rate of profits. Given the...

1.0 Introduction This post is an update, based on suggestions from a user on reddit. I have explained this before. Suppose one insists socialism requires central planning. In his 1920 paper, 'Economic calculation in the socialist commonwealth', Ludwig Von Mises claims that a central planner requires prices for capital goods and unproduced resources to successfully plan an economy. The claim that central planning is impossible without market prices is supposed to be a matter of scientific...

1.0 Introduction I have explained this before. Suppose one insists socialism requires central planning. In his 1920 paper, 'Economic calculation in the socialist commonwealth', Ludwig Von Mises claims that a central planner requires prices for capital goods and unproduced resources to successfully plan an economy. The claim that central planning is impossible without market prices is supposed to be a matter of scientific principle. Von Mises was mistaken. His error can be demonstrated to...