nep-hme New Economics Papers
on Heterodox Microeconomics
Issue of 2015‒08‒13
eleven papers chosen by
Carlo D’Ippoliti
Università degli Studi di Roma “La Sapienza”

  1. Credit, Indebtedness, and Speculation in the Marxian Paradigm: A Critical Analysis By Miguel Ramirez
  2. Sraffa and the Labour Theory of Value - a note By Anderaos de Araujo, Fabio
  3. What is a minimum wage for? Empirical results and theories of justice By David Green
  4. Real and financial crises in the Keynes-Kalecki structuralist model: An agent-based approach By Bill Gibson; Mark Setterfield
  5. The Superiority of Economists By Marion Fourcade; Etienne Ollion; Yann Algan
  6. Looking Behind the Scenes: An Assessment of the Interdependence of Brazilian Cultural Industries By Amir B. Ferreira Neto; Fernando S. Perobelli; Alexandre Rabelo
  7. Worker problem-solving and the nature of the firm: new theory, new evidence By Dorman, Peter; Nolte, Heike
  8. Explorative Untersuchung der Unternehmenskultur auf die Karrierechancen von Frauen By Weissenrieder, Caprice Oona; Graml, Regine; Hagen, Tobias; Ziegler, Yvonne
  9. Managing the commons in the knowledge economy By Carlo Vercellone; Francesca Bria; Andrea Fumagalli; Eleonora Gentilucci; Alfonso Giuliani; Giorgio Griziotti; Pierluigi Vattimo
  10. What if women earned more than their spouse? An experimental investigation of work division in couples By Cochard, François; Couprie, Hélène; Hopfensitz, Astrid
  11. China’s electrical equipment manufacturing in the Global Value Chain: A GVC income analysis based on World Input-Output Database (WIOD) By Yingying Lu

  1. By: Miguel Ramirez (Department of Economics, Trinity College)
    Abstract: This paper contends that, in Chapters XVII, XXIX, XXX, and XXXI of Volume III of Capital, Marx develops an incisive conceptual framework in which excessive credit creation, indebtedness, and speculation play a critical and growing role in the reproduction of social capital on an extended basis; however, given the decentralized and anarchic nature of capitalist production, the credit system does so in a highly erratic and contradictory manner which only postpones the inevitable day of reckoning. The paper also highlights Marx’s relatively neglected but highly important analysis of the separation of ownership from management in the advanced capitalism of his day, England, and its modern-day implications for excessive risk-taking and debt-fueled speculation up until the eve of the crash. More importantly, the paper argues that in Vols. II and III Marx implicitly connected the expanding role of credit [which he associated with the development of capitalism] to a significant reduction in the turnover period of capital, thereby boosting the rate of surplus-value, and countering in a highly erratic and contradictory manner, the fall in the rate of profit. The growing role of credit has been relatively ignored in the Marxian literature as an important counteracting factor to the law of the declining rate of profit. It is not mentioned at all by Marx in his famous Chp. XIV, Vol. III of Capital where he discusses other important counteracting forces, nor by Engels [in this particular context] who edited both Vols. II and III.
    JEL: B10 B14 B24
    Date: 2015–07
  2. By: Anderaos de Araujo, Fabio
    Abstract: An analysis of the invariable measure of prices proposed by the eminent Italian economist Piero Sraffa, who laid the foundations for a new approach in modern economics. Three mathematical appendices are also provided. The first one shows step by step the construction of the Standard Commodity, which is a consistent solution to the transformation of labour values into prices of production. Appendix II is a general numerical example of a price system with two industries which makes the understanding of the distribution of income between wages and profits easier. Using a software spreadsheet, for example, it is possible to make numerical simulations and make comparisons between the results obtained from the Sraffa price system with that obtained from Marx's. The third appendix regards a numerical example of changes in technical progress and its effects on distribution of income. There is also a fourth appendix on the inclusion of rent and interest in Sraffa's price system. This is revised version of the original paper written few years ago.
    Keywords: Sraffa, labour theory of value, Standard Commodity, prices of production, income distribution
    JEL: A1 A2
    Date: 2015–08–01
  3. By: David Green (Institute for Fiscal Studies and University of British Colombia)
    Abstract: I undertake a political economy exercise of a type described in John Rawls' A Theory of Justice; namely, one in which economic institutions are judged by how well they match the key principles in theories of distributive justice. My main contention is that such an exercise is integrally related not only to economics in general but to empirical economics in particular. I argue that most standard theories of justice place a large weight on self and social respect and that such respect has a lot to do with the position a person holds in the productive process - their wage and employment outcomes. That, in turn, means that assessments of justice in the real world hinge critically on how labour markets actually function in assigning wages and employment. The answers to these questions are ultimately empirical. I explore these ideas by examining one particular institution (the minimum wage) in relation to a set of the most prominent recent theories of distributive justice. This exercise leads to a different emphasis on what minimum wage related outcomes need study, and to a claim that minimum wage setting is related to standards of fairness.
    Date: 2014–10
  4. By: Bill Gibson (University of Vermont); Mark Setterfield (Department of Economics, New School for Social Research)
    Abstract: Agent-based models are inherently microstructures - with their attention to agent behavior in a field context - and only aggregate up to systems with recognizable macroeconomic characteristics. One might ask why the traditional Keynes-Kalecki or structuralist (KKS) model would bear any relationship to the multi-agent modeling approach. This paper shows how KKS models might benefit from agent-based microfoundations, without sacricing traditional macroeconomic themes, such as aggregate demand, animal sprits and endogenous money. Above all, the integration of the two approaches gives rise to the possibility that a KKS system - stable over many consecutive time periods - might lurch into an uncontrollable downturn, from which a recovery would require outside intervention. As a by-product of the integration of these two popular approaches, there emerges a cogent analysis of the network structure necessary to bind real and financial agents into a integrated whole. It is seen, contrary to much of the existing literature, that a highly connected financial system does not necessarily lead to more crashes of the integrated system.
    Keywords: Systemic risk; crash; herding; Bayesian learning; endogenous money; preferential attachment; agent-based models.
    JEL: D58 E37 G01 G12 B16 C00
    Date: 2015–08
  5. By: Marion Fourcade (University of California, Berkeley); Etienne Ollion (Université de Strasbourg); Yann Algan (Département d'économie)
    Abstract: In this essay, we analyze the dominant position of economics within the network of the social sciences in the United States. We begin by documenting the relative insularity of economics, using bibliometric data. Next we analyze the tight management of the field from the top down, which gives economics its characteristic hierarchical structure. Economists also distinguish themselves from other social scientists through their much better material situation (many teach in business schools, have external consulting activities), their more individualist worldviews, and their confidence in their discipline's ability to fix the world's problems. Taken together, these traits constitute what we call the superiority of economists, where economists' objective supremacy is intimately linked with their subjective sense of authority and entitlement. While this superiority has certainly fueled economists' practical involvement and their considerable influence over the economy, it has also exposed them more to conflicts of interests, political critique, even derision.
    Keywords: Economist; Social science network; Field supremacy
    JEL: A11 A22 I23 J44
    Date: 2015
  6. By: Amir B. Ferreira Neto (Regional Research Institute, West Virginia University); Fernando S. Perobelli (Federal University of Juiz de Fora); Alexandre Rabelo (Federal University of Juiz de Fora)
    Abstract: How important is Brazil’s cultural industries to its economy? We provide an answer to this question by evaluating the interdependence of the cultural activities in the Brazilian production structure and its evolution over the last few years (2005 – 2009). To accomplish this, we disaggregate 13 cultural economic industries in the Brazilian input-output table and calculate several indexes, such as, the production multiplier, linkage indexes, fields of influence and extraction analysis. Results show that the only cultural sector with high links to other sectors in the production structure is Telecommunication, edition and news agencies and that this sector provides the greatest loss in output when removed from the economy. Moreover, the sectors Jewelry, music, instruments and toys, and Manufacture of telecommunication equipment have output multipliers higher than the average of the economy.
    Keywords: cultural economics,cultural industries, input-output tables, interdependence analysis
    JEL: Z10 D57
    Date: 2015–07
  7. By: Dorman, Peter; Nolte, Heike
    Abstract: This paper proposes a different theory of the firm and demonstrates how it can be employed to yield hypotheses about differences in innovation and human resource strategy according to the shareholder/stakeholder and liberal/coordinated market dichotomies. The theory assumes that feasible production and demand sets are nonconvex due to interaction among activities; thus firms exist to permit the identification and exploitation of profit opportunities through coordinated action. This implies that firms face a nonconvex profit landscape comparable to the fitness landscapes invoked in evolutionary biology. Given the complexity of these landscapes and the uncertainty of the location of profit hills, there is a tradeoff between exploiting existing or adjacent hills and prospecting for more distant ones: the first minimizes risk, the second maximizes potential profit. A further assumption is then introduced, that shareholder firms seek to maximizes the present value of expected future profit streams, while stakeholder firms maximize the likelihood of achieving profitability over a given time horizon. Combining these theoretical priors, we characterize the likely innovation, organizational and human resource characteristics of the two types of firms and the effects exerted by their external environment, as described in the Varieties of Capitalism literature. These theoretical predictions are confirmed in a set of case studies of a stakeholder firm in liberal and coordinated environments and a shareholder firm in a coordinated environment. This is seen through differences in the role of worker problem-solving, which brings together innovation and learning, organizational structure and human resource strategy.
    Keywords: theory of the firm, profit, nonconvexity, varieties of capitalism, innovation, strategy, worker participation
    JEL: B52 D23 D89 J53 L21 M11 M16 O32 P11 P51
    Date: 2015–06
  8. By: Weissenrieder, Caprice Oona; Graml, Regine; Hagen, Tobias; Ziegler, Yvonne
    Abstract: Das Thema der geschlechtsspezifischen Unterschiede in den Karrierechancen wird kontrovers diskutiert. Verschiedene Studien belegen, dass im europäischen Vergleich in Deutschland das Potential, insbesondere bei gut ausgebildeten Frauen, nach wie vor nicht ausgeschöpft wird. Diese Studie soll Aufschluss darüber geben, inwieweit die Unternehmenskultur, d.h. die in den Unternehmen vorherrschenden Werte, Normen, Einstellungen, Überzeugungen sowie Verhaltensweisen und Prozesse, sich günstig oder hemmend auf die Karriereperspektiven von Frauen auswirkt. Im Rahmen der Studie werden exemplarisch in einem deutschen Großunternehmen kulturelle Wirkungskanäle identifiziert, die einen hemmenden oder fördernden Charakter auf die Karriere von Frauen in diesem Unternehmen haben.
    Abstract: The issue of women's career development in Germany is still under a controversial discussion. Several studies confirm that the potential of welleducated women in Germany isn't still fully exploited. The study explores the effects of a corporate culture with its prevailing values, norms, attitudes, beliefs as well as behaviours and processes on the career opportunities of female leaders within a German company. We identified influencing channels through which culture could affect career perspectives of women.
    Keywords: Career,Corporate Culture,Women in Leadership,Mixed Methods,Attitude,Behavior,Glass Ceiling
    JEL: M12 M14 J11 J21 J24 O15
    Date: 2015
  9. By: Carlo Vercellone (CES - Centre d'économie de la Sorbonne - UP1 - Université Panthéon-Sorbonne - CNRS); Francesca Bria (NESTA); Andrea Fumagalli (Dipartimento di Economia, Università di Pavia, Italie - University of Pavia, Italy); Eleonora Gentilucci (Axe Institutions - CES - Centre d'économie de la Sorbonne - UP1 - Université Panthéon-Sorbonne - CNRS); Alfonso Giuliani (CES - Centre d'économie de la Sorbonne - UP1 - Université Panthéon-Sorbonne - CNRS); Giorgio Griziotti (Effimera); Pierluigi Vattimo (Università di Cosenza)
    Abstract: This report presents an in-depth analysis of the concept of common goods and of possible political and management variation in the context of a knowledge-based economy. The research presents an initial critical review of the literature together with a concrete analysis of the development of the commons and common goods. The report will be organised in three sections. In the first, entitled "From the theory of public goods to the new political economy of the commons" we will see how, for Ostrom's new theory of the commons, what remains as a central element defining common goods is the particular nature of certain goods, in continuity with the ahistorical and static approach to classification of goods (private, public, common, belonging to a club) driven by neo-classical inspired economic theory. In the second section we will develop the approach of Common in the singular drawn up with the contribution of numerous studies in the theoretical framework of cognitive capitalism. The third will deal with the historic and empirical analysis of the origin, sense and principal stakes at play in the dynamics of the common, starting from the key role of the transformations of labour at the foundation of a knowledge-based economy. Throughout this journey, in the three sections different crucial aspects relating to the forms of regulation open to guarantee the sustainability of the commons and promote its development as a new central form of economic and social organisation will be faced systematically. This research offers an exhaustive theoretical framework, tackling all the conceptual and historical issues on the evolution of the theory of common goods. At the same time however, it offers practical and regulative examples of models of self-governance of commons, in the context of the knowledge-based economy. This analysis offers the D-CENT project possible models of democratic management of resources and common infrastructures that are at the base of the experience of shared democracy in Spain, Iceland and Finland, with the aim of achieving middle and long-term sustainability. Specifically speaking, the analysis submitted here reports: (1) research into the market of identity and the opposing claim of social data as digital common goods and the need for public and common infrastructures of information and communication not based on the logic of the market and surveillance (D3.3); (2) models to implement a commons currency of the common that can support the activities of social movements and productive communities (D3.5); (3) the final report (D1.3) on models of sustainability and the general impact of this project. Many of the examples proposed here, from the re-municipalisation of water, the self-management of cultural spaces to the free software and makers’ movement, illustrate collective practices that establish new spaces, institutions or norms of participative and democratic sharing. These examples represent practices of re-appropriation and management of the common, new practices of labour, creation and production based on collaboration and sharing. Moreover, from the concrete experiences analysed here, the idea emerges that the concept of common goods can constitute a concrete alternative, and that includes on a legal footing (Rodotà, 2011). Therefore the common is the product of a social and institutional structure that demonstrates forms of governing and social co-operation that guarantee its production, reproduction and spread. The new institutions of the common that emerge from these constituent practices constitute a general principle of self-governance of society and self-organisation of social production, proposing a new division between common, public and private. Obviously, the success of these new practices is a complex process that must rely on institutions which accord and guarantee reproduction over time and space of the commons and common goods: ways of management based on self-governance and collaborative economics; relationships of exchange based on reciprocity and gratuitousness; legal regimes that, like the invention of copyleft for free software, guarantee the accumulation of a stock of common-pool resources (CPR); distribution norms that permit the active involvement of the commoners in the development of the commons, guaranteeing a basic income, for example. In this context, it becomes more and more essential and urgent to define the terms of an alternative model of regulating a knowledge-based society and economy at the centre of which the logic of the commons would perform an essential role.
    Date: 2015–04–30
  10. By: Cochard, François; Couprie, Hélène; Hopfensitz, Astrid
    Abstract: Female specialization on household work and male specialization on labor-market work is a widely observed phenomenon across time and countries. Gender differences regarding characteristics (preferences, productivity) and context (wage rates, social norms) are generally recognized to explain this fact. We experimentally investigate work division by true co-habiting couples participating in a newly developed specialization task. Efficiency in this task comes at the cost of inequality, giving higher earnings to the “advantaged” player. We compare behavior when men (or women) are in the advantaged position, which correspond to the traditional (or power) couple case where he (or she) earns more. We show that women do not contribute more than men to the household public good whatever the situation. This result allows us to rule-out some of the standard explanations of the work division puzzle.
    Keywords: Experiment on couples, Time allocation, Work division
    JEL: C99 D13 J16
    Date: 2015–07–30
  11. By: Yingying Lu
    Abstract: This paper empirically analyzes China’s electrical equipment manufacturing industry in the context of global value chain (GVC) by using the GVC income approach (Timmer et al., 2013) and the World Input-Output Database (WIOD). Four major questions are addressed by measuring several different indicators. China is found to have comparative advantage and competitiveness in terms of its large share of value added contribution in the world electrical equipment manufacturing industry. However, such competitiveness is not sustainable for two reasons: (1) China is actually a net value added importer, which limits its dominance and development in this industry; (2) the majority of China’s GVC income comes from capital investment rather than high-skilled or valuable activities, which means the competitiveness is easy to be taken over as physical capital is more “mobile” than human capital. The paper also finds that the global financial crisis (GFC) did have certain impact on the electrical equipment GVCs in general, but the impact is not necessarily negative and big for each economy. For China, the GFC led to a decrease in the average real wage in this industry due to the decreasing high-skilled labor compensation share and the increasing low-skilled one. The analysis also implies that to upgrade the China’s position in the electrical equipment manufacturing GVC may ultimately mean upgrading the agriculture sector such that more labor can be engaged in medium- and high-skilled activities.
    Keywords: Global Value Chain (GVC), Input-Output Analysis, GVC income, China, Electrical Equipment Manufacturing
    JEL: C67 F14 L63
    Date: 2015–07

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