nep-hpe New Economics Papers
on History and Philosophy of Economics
Issue of 2023‒04‒17
ten papers chosen by
Erik Thomson
University of Manitoba

  1. Ladislaus von Bortkiewicz’s Errors and a Reliable Solution to the Marxian Problem of Transformation in Direct and Inverse Formulation By Kalyuzhnyi, Valeriy
  2. The Industrial Degradation of Workers That Thorstein Veblen Overlooked By Jon D. Wisman
  3. Main Concepts and Principles of Political Economy -- Production and Values, Distribution and Prices, Reproduction and Profits By Christian Flamant
  4. Physics Breakthrough Disproves Fundamental Assumptions of the Chicago School By Cortelyou C. Kenney
  5. The Emperor Has No Clothes: A Reply to Ginoux and Jovanovic By Vincent Carret
  6. Alexandre Lamfalussy and the origins of instability in capitalist economies By Ivo Maes
  7. Economic History and Cliometrics: the Stand of the last Samurai By Claude Diebolt
  8. El keynesianismo en la Argentina By Saúl Néstor Keifman; Luis Blaum
  9. Que nous apprend la littérature récente sur la « nature et les causes de la richesse des nations » ? By Jean-Louis Combes; Pascale Combes Motel
  10. Calling and the good life: a meta-analysis and theoretical extension By Dobrow, Shoshana R.; Weisman, Hannah; Heller, Daniel; Tosti-Kharas, Jennifer

  1. By: Kalyuzhnyi, Valeriy
    Abstract: The paper argues that economists still regard the solution to the problem of the transformation of values into prices of production, got by L. von Bortkiewicz, as belonging to Marx himself. After all, it was allegedly “correctly corrected” by the said author in 1907. Bortkiewicz based his solution on several erroneous interpretations’ theory of Marx. Because of Bortkiewicz’s errors, the representatives of the mainstream see no connection between the “value system” and the “production price system”. They claim that the transformation problem itself results from impossibility and that Marxist value theory is, at best, irrelevant and irremediably inconsistent. The paper shows that the solution to the transformation issue exists in both the direct and inverse formulation. We used for this purpose the Tugan-Baranowsky—Bortkiewicz three-sector model. These results are consistent with the concept of Marx within the dualistic approach. They coincide with the results generated by the author in his previous work (see In the present paper, we introduce methods and examples of transformation, including iterative and based on solving systems of simultaneous equations. We prove again with their help that at equilibrium prices, profit arises from surplus value, or more precisely, from the newly created value generated by workers’ labour and from no other source. We also show that a dualistic approach to transformation allows us to see the advantages of value prices, which, unlike production prices, do not limit the growth of the productive power of labour when enterprises introduce new machines. Value prices are in demand under socialism.
    Date: 2023–01–17
  2. By: Jon D. Wisman
    Abstract: Thorstein Veblen gave special importance to work in human society. He claimed that once humans became tool users, their work activity was driven by an instinct of workmanship. This instinct is "an object of attention and sentiment in its own right" beyond providing provisioning and serving another instinct, that of parental bent, or society's wellbeing. Given appropriate social institutions, workmanship enriches personal and social lives. Yet, during his lifetime between 1857 and 1929, the rapid industrialization of the American economy massively proletarianized workers and degraded not only their work experience, but also their lives. In Europe, this proletarianization and degradation of workers had begun centuries earlier with the rise of capitalism, and greatly accelerated with more rapid industrialization during Veblen's lifetime. Yet, paradoxically, Veblen ignored this degradation of work and presented industrialization as positive for workers. This article surveys the process of proletarianization, focusing especially on the American experience. It then explores Veblen's understanding of the impact of industrialization on workers and probes for an understanding of how he could have missed a far-reaching labor-degrading process that provoked massive and violent insurrection, and which had much earlier been recognized and addressed by political economists as diverse as Adam Smith and Karl Marx. Because he failed to recognize the proletarianization of workers, he failed to see its role in generating the explosion of conspicuous consumption by Americans of all classes, the subject of his most renowned work, The Theory of the Leisure Class.
    Keywords: Industrialization; Proletarianization; Instinct of Workmanship; Worker alientation
    JEL: A13 B15 Z10
    Date: 2023
  3. By: Christian Flamant
    Abstract: This book starts from the basic questions that had been raised by the founders of Economic theory, Smith, Ricardo, and Marx: what makes the value of commodities, what are production, exchange, money and incomes like profits, wages and rents. The answers that these economists had provided were mostly wrong, above all by defining the equivalence of commodities at the level of exchange, but also because of a confusion made between values and prices, and wrong views of what production really is and the role of fixed capital. Using the mathematical theory of measurement and the physical theory of dimensional analysis, this book provides a coherent theory of value based on an equivalence relation not at the level of exchange, but of production. Indeed exchange is considered here as an equivalence relation between money and a monetary price, and not between commodities, modern monetary theory having demonstrated that money is not a commodity. The book rejects the conception of production as a surplus, which owes much to Sraffa's theory of production prices, and is shown to be severely flawed. It founds the equivalence of commodities at the level of a production process considered as a transformation process. It rehabilitates the labor theory of value, based on the connection between money and labor due the monetary payment of wages, which allows the homogenization of various kinds of concrete labor into abstract labor. It shows that value is then a dimension of commodities and that this dimension is time, i.e. the time of physics. On this background, the book shows that the calculation of values for all commodities is always possible, even in the case of joint production, and that there cannot be any commodity residue left by this calculation. As a further step, this book provides a coherent theory of the realization of the product, which occurs in the circulation process. Using an idea - the widow's cruse - introduced by Keynes in his Treatise on Money, it brings to light the mechanism behind the transformation of money values into money prices and of surplus-value into profits and other transfer incomes, ensuring the formation of monetary profits. The book sheds some light on the rate of profit, its determinants and its evolution, showing in particular the paramount importance of capitalist consumption as one of its main determinants. In passing it explains the reasons why in the real world there is a multiplicity of profit rates. Finally, it allows to solve in a precise and illustrated way the problems raised by the Marxist law of the tendency of the rate of profit to fall. Most of the results obtained translate into principles, the first ones being truly basic, the following ones less basic, but all of them being fundamental. All in all, this book might provide the first building blocks to develop a full-fledged and scientific economic theory to many fellow economists, critical of neo-classical theory, but who have not yet dicovered the bases of a complete and coherent alternative.
    Date: 2023–03
  4. By: Cortelyou C. Kenney
    Abstract: Classical law and economics is foundational to the American legal system. Centered at the University of Chicago, its assumptions, most especially that humans act both rationally and selfishly, informs the thinking of legislatures, judges, and government lawyers, and has shaped nearly every aspect of the way commercial transactions are conducted. But what if the Chicago School, as I refer to this line of thinking, is wrong? Alternative approaches such as behavioral law and economics or law and political economy contend that human decisionmaking is based on emotions or should not be regulated as a social geometry of bargains. This Article proposes a different and wholly novel reason that the Chicago School is wrong: a fundamental assumption central to many of its game theory models has been disproven. This Article shows that a 2012 breakthrough from world famous physicist Freeman Dyson shocked the world of game theory. This Article shows that Chicago School game theorists are wrong on their own terms because these 2 x 2 games such as the Prisoner's Dilemma, Chicken, and Snowdrift, ostensibly based on mutual defection and corrective justice, in fact yield to an insight of pure cooperation. These new game theory solutions can be scaled to design whole institutions and systems that honor the pure cooperation insight, holding out the possibility of cracking large scale social dilemmas like the tragedy of the commons. It demonstrates that, in such systems, pure cooperation is the best answer in the right environment and in the long run. It ends by calling for a new legal field to redesign the structures based on the outdated assumptions of the Chicago School game theorists.
    Date: 2023–03
  5. By: Vincent Carret (Duke University [Durham])
    Abstract: In this note to be published as a letter to the editor of the Journal of the History of Economic Thought, I present my results on Ragnar Frisch's rocking horse model published in the same journal and detail why the comments by Ginoux and Jovanovic on my paper have no grounding. I explain the role of initial conditions on the amplitude of cycles and trend in Frisch's solution, and emphasize that my contribution was to show that Frisch built a model where cycles and growth came from the same economic mechanism.
    Keywords: Ragnar Frisch, rocking horse, delay differential equations
    Date: 2023–01–20
  6. By: Ivo Maes (Chaire Robert Triffin, Université catholique de Louvain & ICHEC Brussels Management School)
    Abstract: In this paper the vision of the “Young” and “Elder” Lamfalussy on the origins of instability in capitalist economies will be contrasted. The young Lamfalussy found the origins of instability in medium-term cumulative processes in the real sector of the economy, very much inspired by the vicious circles in the British and Belgian economies in the postwar period, in contrast to the virtuous growth processes of the German and Italian economies. The Elder Lamfalussy focused on financial innovations and the short-term myopic behavior of financial markets, very much inspired by his experience of the Latin American debt build-up and ensuing crisis in the early 1980s. The Euro area crisis showed the importance of both processes, as it was the consequence of both short-term myopic behavior in financial markets and medium-term cumulative processes in the real sector.
    Keywords: Lamfalussy, economic instability, economic cycles, financial innovations, Latin American debt crisis, Euro area crisis.
    JEL: A11 B22 B32 E3 E F02 G10 N10
    Date: 2023–03
  7. By: Claude Diebolt (BETA/CNRS & University of StrasbourgAuthor-Name: Nadir Altinok; University of Wisconsin-La Crosse)
    Date: 2023
  8. By: Saúl Néstor Keifman; Luis Blaum
    Keywords: Keynesianismo, Estructuralismo
    JEL: B31 O11
    Date: 2021–11
  9. By: Jean-Louis Combes (LEO - Laboratoire d'Économie d'Orleans [2022-...] - UO - Université d'Orléans - UT - Université de Tours - UCA - Université Clermont Auvergne, UCA - Université Clermont Auvergne); Pascale Combes Motel (LEO - Laboratoire d'Économie d'Orleans [2022-...] - UO - Université d'Orléans - UT - Université de Tours - UCA - Université Clermont Auvergne, UCA - Université Clermont Auvergne)
    Abstract: This literature review covers recent works dealing with the ultimate causes of economic development. The article first considers the driving role of the rules of the social game. Then the focus shifts to the role of historical circumstances. Finally, we seek to understand how geography can influence development paths. These studies are multidisciplinary and use new databases. The results should not imply that there is a cultural, historical or geographical determinism. That is, historical contingencies and economic policy decisions can foster lasting changes in development trajectories.
    Date: 2023–02–09
  10. By: Dobrow, Shoshana R.; Weisman, Hannah; Heller, Daniel; Tosti-Kharas, Jennifer
    Abstract: While a positive view of calling has been ubiquitous since its introduction into the literature over two decades ago, research remains unsettled about the extent to which it contributes to various aspects of the good life: an optimal way of living well via worthwhile endeavors. Further, scholars have identified two conceptual types of calling, marked by internal versus external foci; yet their differential impact on outcomes indicative of the good life, such as eudaimonic and hedonic well-being (characterized by the experience of purpose and meaning versus pleasure and happiness, respectively), is unknown. Through a meta-analysis of 201 studies, we provide the first systematic review focused on these two fundamental theoretical issues in the calling literature: how strongly related callings are to outcomes in the domains of work and life and which type of calling (internally or externally focused) more strongly predicts these outcomes, if either. We find that callings more strongly relate to outcomes indicative of the good life than recently argued. We further find that callings are more strongly linked to work than to life outcomes and to eudaimonic than to hedonic outcomes. The two types of calling converge in being associated with many similar outcomes, but they show some divergence: internally focused callings are more positively related to hedonic outcomes and less positively related to eudaimonic outcomes, relative to externally focused callings. This finding supports a view of callings as hierarchically structured, with a higher-order calling factor composed of two correlated yet distinct lower-order calling types. Integrating our meta-analytic findings with relevant literatures, we propose a theoretical model that addresses psychological and social need fulfillment through which different types of callings contribute to the good life.
    Keywords: calling; meta-analysis; meaning of work; work orientation; the good life; career; well-being; Sage deal
    JEL: J50
    Date: 2023–03–05

This nep-hpe issue is ©2023 by Erik Thomson. It is provided as is without any express or implied warranty. It may be freely redistributed in whole or in part for any purpose. If distributed in part, please include this notice.
General information on the NEP project can be found at For comments please write to the director of NEP, Marco Novarese at <>. Put “NEP” in the subject, otherwise your mail may be rejected.
NEP’s infrastructure is sponsored by the School of Economics and Finance of Massey University in New Zealand.