Tag Archives: Economics

For Marx, a currency’s representation of the labor performed in commodity production is indirect, mediated through a ‘money commodity’. The reason for this is that labor performed in commodity production is not directly social but only made so, indirectly, according to the ‘law’ of value under which the concrete properties of diverse labors are abstracted from and the amount of labor socially necessary to produce each commodity is determined. Since the currency, at least from the...

Mainstream economics — the poverty of fictional story-telling One of the limitations with economics is the restricted possibility to perform experiments, forcing it to mainly rely on observational studies for knowledge of real-world economies. But still — the idea of performing laboratory experiments holds a firm grip of our wish to discover (causal) relationships between economic ‘variables.’If we only could isolate and manipulate variables in controlled...

Bill Mitchell has just posted the first instalment in a two-part series on Marx and MMT. I was unaware of that while preparing the body of this post, but some of what follows bears incidentally on the topic. Bill Mitchell’s series is in response to a Marxist on the panel at one of his presentations who apparently cited Marx’s theory as proof that government, through its spending, is powerless to do anything about employment in a capitalist economy. The phenomenon of some Marxists being...

MMT does not presuppose a particular theory of value. In principle, it is possible to situate a subjective or objective view of value within it. The present focus is on Marx’s theory of value and, more specifically, his ‘law’ of value. Marx’s law of value, in which commodity production only occurs on the basis of profitability, and profitability derives from surplus labor, is compatible with MMT so long as it is understood that Marx’s law pertains only to the sphere of commodity...

Mainstream economics — replete with arrant nonsense Mainstream economics is replete with ideas that “everyone knows” to be true, but that are actually arrant nonsense. For example, “everyone knows” that: • Aggregate production functions (and aggregate measures of the capital stock) provide a good way to characterize the economy’s supply side; • Over a sufficiently long span—specifically, one that allows necessary price adjustments to be made—the economy...

Reinstating the gold standard Ninety years ago Keynes could congratulate Great Britain on finally having got rid of the biggest ”barbarous relic” of his time — the gold standard. He lamented that advocates of the ancient standard do not observe how remote it now is from the spirit and the requirement of the age … [T]he long age of Commodity Money has at last passed away before the age of Representative Money. Gold has ceased to be a coin, a hoard, a...

The great debt debate — Thomas Piketty and Michael Hudson .[embedded content]

‘New Keynesian’ macroeconomics — worse than useless Macroeconomic models may be an informative tool for research. But if practitioners of ‘New Keynesian’ macroeconomics do not investigate and make an effort of providing a justification for the credibility of the assumptions on which they erect their building, it will not fulfill its tasks. There is a gap between its aspirations and its accomplishments, and without more supportive evidence to...

It is suggested in an earlier post that the presence of complex labor affects value creation in Marx’s theory, including at the aggregate level. The argument starts from Marx’s distinction between concrete and abstract labor. In making this distinction, Marx explicitly identifies productivity as a property of concrete labor and labor complexity as a property of abstract labor. Variations in productivity, since they relate to concrete labor, directly affect the aggregate production of...

It is suggested in an earlier post that the presence of complex labor affects value creation in Marx’s theory, including at the aggregate level. The argument starts from Marx’s distinction between concrete and abstract labor. In making this distinction, Marx explicitly identifies productivity as a property of concrete labor and labor complexity as a property of abstract labor. Variations in productivity, since they relate to concrete labor, directly affect the aggregate production of...