nep-hme New Economics Papers
on Heterodox Microeconomics
Issue of 2014‒05‒17
seven papers chosen by
Carlo D'Ippoliti
La Sapienza University of Rome

  1. Profit als Rente. Anmerkungen zu einer pro-kapitalistischen Entwicklungstheorie By Quaas, Georg
  2. Adam Smith and modern economics. By Sandmo, Agnar
  3. Piketty against Piketty: the tendency of the rate of profit to fall in United Kingdom and Germany since XIX century confirmed by Piketty´s data By Maito, Esteban Ezequiel
  4. The historical transience of capital: the downward trend in the rate of profit since XIX century By Maito, Esteban Ezequiel
  5. The early history of environmental economics. By Sandmo, Agnar
  6. The Third Sector importance: General perspectives and analysis for Bulgaria By Julia DOITCHINOVA; Darina ZAIMOVA
  7. Are Firms Paying More for Performance? By Dr Alex Bryson; Lucy Stokes; John Forth

  1. By: Quaas, Georg
    Abstract: Profit as rent: Some remarks about a pro-capitalist theory of development This study discusses several of the economic cornerstones of the contribution made by Hartmut Elsenhans to the so-called Global Keynesianism. Included are his unique definition of profits and rents; the thesis of net investments as a prerequisite to the acquisition of profits, including the systematic and historic background of this thesis; the exploitation of a simple neoclassical production function by ignoring conceptually ill-fitting consequences; the stabilization of investors’ expectations of rising mass consumption on the base of rising real income; the author's over- and under-interpretation of Ricardo’s theory on international trade based on comparative cost advantages; and the role of mass democracy in the acquisition and redistribution of rents to empower the underprivileged in negotiations with entrepreneurs.
    Keywords: Global Keynesianism, rent-seeking, mass consumption, comparative cost advantages
    JEL: E12 E24 F11
    Date: 2014–03
  2. By: Sandmo, Agnar (Dept. of Economics, Norwegian School of Economics and Business Administration)
    Abstract: In his Wealth of Nations (1776) Adam Smith created an agenda for the study of the economy that is reflected in the structure of modern economics. This paper describes Smith’s contributions to four central areas of economic theory: The theory of price formation, the relationship between market outcomes and the public interest, the role of the state in the economy, and the sources of economic growth. In each case, an attempt is made to relate Smith’s contribution to the state of contemporary economics, showing both the similarities and contrasts between the respective approaches.
    Keywords: Adam Smith; markets; government; economic growth.
    JEL: B12 B31
    Date: 2014–04–28
  3. By: Maito, Esteban Ezequiel
    Abstract: In Capital in 21st century, Thomas Piketty criticizes Marxian theory and the law of the tendency of the rate of profit to fall in the long term. His main argument, asserted by other authors since decades, is related to the capacity of increases in productivity to counterweight the tendency. The French author establishes a stable “rate of return” too, but this rate and his critics on Marx are founded on a neoclassical perspective. Thus Piketty denies the validity of the law but changing its determinations as a result of the labor theory of value and the valorization process. When a proper definition of the matter in Marxian terms is done, Piketty´s data itself confirm the law of the tendency of the rate of profit to fall.
    Keywords: Piketty – Capital – Marx – Rate of profit – United Kingdom - Germany
    JEL: E21 E22 P1 P16 Y1
    Date: 2014–05
  4. By: Maito, Esteban Ezequiel
    Abstract: This paper presents estimates of the rate of profit on fourteen countries in the long run. The performance shows a clear downward trend, although there are periods of partial recovery in both core and peripheral countries. The behavior of the profit rate confirms the predictions made by Marx, about the historical trend of the mode of production. Finally, an estimate of the global rate of profit for the last six decades is done, also highlighting the particular role of China in systemic profitability.
    Keywords: rate of profit - Marx - mode of production – core/periphery – world rate of profit
    JEL: E30 F21 N0 P10 P16
    Date: 2014
  5. By: Sandmo, Agnar (Dept. of Economics, Norwegian School of Economics and Business Administration)
    Abstract: This paper considers economists’ treatment of problems related to the environment prior to the establishment of environmental economics as a separate field in the 1960s. In discussing the literature from the late 18th century onwards, it looks on the one hand for awareness in the work of the early economists of the effects of economic activity on the natural and social environment and of the feedback from the environment to the economy. On the other hand, it describes how economic theory developed in a way which made it increasingly relevant for the study of environmental issues and the design of economic policy.
    Keywords: History of thought; environment; natural resources
    JEL: B00 Q30 Q50
    Date: 2014–04–08
  6. By: Julia DOITCHINOVA (University of National and World Economy, Sofia, Bulgaria); Darina ZAIMOVA (Trakia University, Stara Zagora, Bulgaria)
    Abstract: This paper is purposeful towards assessing the significance, state and development of the third sector in Bulgaria. Its first part deals with the theoretical background and specific characteristics of the sector that distinguish and define it as a successful way whereby social problems are addressed and appropriate solutions are proposed. Economic crisis in Bulgaria and its social impact are traced in the second part of the paper, while in the third part is focused on how the third sector organizations in Bulgaria contribute to overcoming crucial societal problems emerging in the recent years. Cooperative development and its importance are presented as traditional and effective strategy when dealing with the abovementioned social instability. Drawing on the information and the analysis provided, conclusions and recommendations are prepared in the last part; as well as possible directions in terms of expanding its role for the social economy will be proposed. The set of data sources that are employed includes statistical and other reported data for the NGOs and systemized analysis and results regarding their development in Bulgaria.
    Keywords: economic and social crisis, third sector, NGO, cooperatives, Bulgaria
    Date: 2013–01
  7. By: Dr Alex Bryson; Lucy Stokes; John Forth
    Abstract: Despite its potential to raise productivity, performance-related-pay (PRP) is not widespread in market-oriented economies. Furthermore, despite secular changes conducive to its take-up, there is mixed evidence as to whether it has become more prominent over time. Ours is the first paper to present firm-level data for the Britain on both the incidence and size of bonus payments in the 2000s.  We decompose the share of the total wage bill accounted for by bonuses into the shares of employment in the PRP and non-PRP sectors, the ratio of base pay between the two sectors, and the gearing of bonus payments to base pay within the PRP sector. We show that there was some growth in the share of total pay accounted for by bonuses in Britain in the mid-2000s. However this rise – and subsequent fluctuations since the onset of recession in 2008 – can be almost entirely explained by changes in the gearing of bonus to base pay within the PRP sector. There has been no substantial change in the percentage of employment accounted for by PRP firms; if anything it has fallen over the past decade. Furthermore, the movements in the gearing of bonuses to base pay in the economy at large are heavily influenced by changes in the Finance industry: a sector which accounts for a large proportion of all bonus payments in the British economy.
    Date: 2014–02

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