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Why Do Mainstream Economists Not Make More Out Of The CCC?

Summary:
Marx is mostly right. That is the conclusion one should draw from capital theory. But honestly understanding how we are fed, clothed, and housed under capitalism is not what academic economics is about. Ownership of property in, say, the United States results in the generation of income. This income takes the form of interest on debt, dividends, capital gains, rent, and so on. Many of those who are among the most wealthy often have returns to property ownership as their only source of income. Overall, laborers work within a given environment to recreate the capital goods used up in production and to produce more. The source of the returns to property ownership comes from paying workers less than what they produce, over and above the constantly reproduced capital. The owners of

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Marx is mostly right.

That is the conclusion one should draw from capital theory. But honestly understanding how we are fed, clothed, and housed under capitalism is not what academic economics is about.

Ownership of property in, say, the United States results in the generation of income. This income takes the form of interest on debt, dividends, capital gains, rent, and so on. Many of those who are among the most wealthy often have returns to property ownership as their only source of income.

Overall, laborers work within a given environment to recreate the capital goods used up in production and to produce more. The source of the returns to property ownership comes from paying workers less than what they produce, over and above the constantly reproduced capital. The owners of capital direct and control the workers and the environment in which they work, in hierarchical structures, so as to attempt to ensure the surplus is as large as possible.

Marx provides a vocabulary to talk about the above qualitative outline, to understand the formal and real subsumption of labor.

Marx provides many details to investigate and modify. I do not think the law of the tendency of the rate of profits to fall (TRPF) can be deduced from the remainder of his system. But just like a simple labor theory of value, it seems to work surprisingly well empirically. When one tries to make sense about the stagflation of the 1970s and the transition from the post war golden age to the neoliberal era, trends in the rate of profits seem quite important.

How important is the question of labor values versus prices of production in any quantitative analysis built on this basis? One can say a lot while confining one's attention to employment multipliers and prices of production. The non-applicability and incoherence of the theory of supply and demand is a major point of the Cambridge Capital Controversy. Supply and demand functions no longer should appear in any long run theory, in any investigation of persistent trends in capitalist economies.

And, of course, Leontief figured out how to organize data for empirical and quantitative investigations along these lines. One can construct Leontief input output tables from the make and use tables that are kept for the national income and product accounts (NIPAs). I would also like price indices for each industry at the level of the available NIPAs. There are many details and conventions that one should understand in working with such data, which I think I get muddled over when I've gone into details.

And much room exists for qualitative and historical work. One could draw on institutional economics in examining capital as power.

You can start to see scholars developing economics in this direction in the 1970s and early 1980s. I think of Donald Harris' Capital Accumulation and Income Distribution, Stephen Marglin's Growth, Distribution and Prices, Michio Morishima's Marx's Economics: A Dual Theory of Value and Growth, Luigi Pasinetti's Lectures on the Theory of Production, John Roemer's Analytical Foundations of Marxian Economic Theory, or Peter Skott's Conflict and Effective Demand in Economic Growth.

But most of the economists at the supposed best schools were uninterested or too craven to accept work along these lines as valid research programs. So much of academic economics is special pleading in bad faith for their paymasters among the plutocracy, as comes out in the news every once in a while. (Disclaimer: I own stock in Amazon and Apple.)

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