nep-pke New Economics Papers
on Post Keynesian Economics
Issue of 2006‒10‒21
three papers chosen by
Karl Petrick
University of the West Indies

  1. Reexamination of the Marxian Exploitation Theory By Naoki Yoshihara
  2. On ignoring scientific evidence: The bumpy road to enlightenment By Robin Hogarth
  3. Did F. A. Hayek Embrace Popperian Falsificationism? - A Critical Comment About Certain Theses of Popper, Duhem and Austrian Methodology By van den Hauwe, Ludwig

  1. By: Naoki Yoshihara
    Abstract: In this paper, we reexamine the mathematical analysis of Marxian exploitation theory. First, we reexamine the validity of the two types of Marxian labor exploitation, Morishima's (1974) type and Roemer's type (1982), in the argument of Fundamental Marxian Theorem (FMT). We show that the FMT does not hold true if we adopt the Roemer exploitation, and equilibrium notions are the reproducible solution [Roemer (1980)]. Also, we show that the FMT does not hold true for the Morishima exploitation if there exist heterogeneous demand functions among workers. Second, we reexamine the Class- Exploitation Correspondence Principle (CECP) [Roemer (1982)]. We show that the CECP does not hold true in the general convex cone economy even if we adopt the Roemer exploitation. Finally, we propose a new definition of Marxian labor exploitation, and show that all of the above difficulties can be resolved under this new definition.
    Keywords: reproducible solutions; the Fundamental Marxian Theorem; the Class-Exploitation Correspondence Principle; the Roemer (1982) definition of labor exploitation; the Morishima (1974) definition of labor exploitation
    JEL: B24 B51 D31 D46
    Date: 2006–05
  2. By: Robin Hogarth
    Abstract: It is well accepted that people resist evidence that contradicts their beliefs. Moreover, despite their training, many scientists reject results that are inconsistent with their theories. This phenomenon is discussed in relation to the field of judgment and decision making by describing four case studies. These concern findings that “clinical” judgment is less predictive than actuarial models; simple methods have proven superior to more “theoretically correct” methods in times series forecasting; equal weighting of variables is often more accurate than using differential weights; and decisions can sometimes be improved by discarding relevant information. All findings relate to the apparently difficult-to-accept idea that simple models can predict complex phenomena better than complex ones. It is true that there is a scientific market place for ideas. However, like its economic counterpart, it is subject to inefficiencies (e.g., thinness, asymmetric information, and speculative bubbles). Unfortunately, the market is only “correct” in the long-run. The road to enlightenment is bumpy.
    Keywords: Decision making, judgment, forecasting , linear models, heuristics
    JEL: D81 M10
    Date: 2006–05
  3. By: van den Hauwe, Ludwig
    Abstract: Criticizing and commenting upon a questionable thesis of Hayek biographer Hans Jörg Hennecke, the author of this article argues that Hayek´s methodological outlook at the time he engaged in business cycle research was actually closer to praxeological apriorism than to Popperian falsificationism. A consideration of the Duhem thesis highlights the fact that even from a mainstream methodological perspective falsificationism is more problematic than is often realized. Even if the praxeological and mainstream lines of argumentation reject the Popperian emphasis on falsification for different reasons and from a different background, the prospects for falsificationism in economic methodology seem rather bleak.
    Keywords: General Methodology; Austrian Methodology; Falsificationism; Popper; Hayek; Duhem; Duhemian Argument; Testing of Theories; Meaning and Interpretation of Econometric Results; Correlation and Causality;
    JEL: B53 A12 C10 B23 E32 B20 B40
    Date: 2006

This nep-pke issue is ©2006 by Karl Petrick. 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.