nep-pke New Economics Papers
on Post Keynesian Economics
Issue of 2012‒07‒01
eight papers chosen by
Karl Petrick
University of the West Indies

  1. Endangering the natural basis of life is unjust. On the status and future of the sustainability discourse By Christian Becker; Dieter Ewringmann; Malte Faber; Thomas Petersen; Angelika Zahrnt
  2. The Environmental Aspect of “Making People Rich as the Top Priority” in China: a Marxian Perspective By Faber, Malte; Petersen, Thomas
  3. Ecological Macroeconomics: An application to climate change By Armon Rezai; Lance Taylor; Reinhard Mechler
  4. The Crisis of Intellectual Monopoly Capitalism By Ugo Pagano
  5. No institution is a free lunch: a reconstruction of Ronald Coase By Ugo Pagano
  6. On recent reformulations of the labour theory of value By Fabio petri
  7. What the Keynesian theory said about Portugal? By Martinho, Vítor João Pereira Domingues
  8. Boats and tides and "Trickle Down" theories: What economists presume about wellbeing when they employ stochastic process theory in modeling behavior By Anderson, Gordon

  1. By: Christian Becker; Dieter Ewringmann; Malte Faber; Thomas Petersen; Angelika Zahrnt
    Abstract: The paper critically examines the status of the sustainability discourse and sustainability politics against the backdrop of considerations about the meaning of justice in the context of sustainability. We argue that the preservation of the natural basis of life is by itself a requirement of justice. However, the crucial role of the ecological dimension of sustainability has been neglected due to a problematic interpretation of the economic dimension, a limited understanding of justice, and an overemphasis of economic growth and growth politics. We propose to reposition the sustainability discourse and sustainability politics by prioritizing the long-term protection of the natural basis of life as the essential foundation of future development, welfare, and justice.
    Keywords: Sustainability; justice; ethics; growth; welfare; ecological economy
    JEL: A13 A10 Q57 Q5 Q01 O40 I31
    Date: 2012–06–21
  2. By: Faber, Malte; Petersen, Thomas
    Abstract: Income inequality in China is severe; measured by the Gini-coefficient it amounted to 0.46 in 2011; wealth distribution is even worse with 0.61. These disparities led to a major shift in emphasis of politics in general and of the Five-Year Plan for National Economic and Social Development by the National People´s Congress in particular. While previously the strategy of the Five-Year Plans had been “Making the nation [our emphasis] rich as top priority”, this was changed to “Making people [our emphasis] rich as top priority” in the 12th Five-Year Plan (2011-2015), enacted in March 2011.The strategic change from “nation” to “people” indicates that the political decision-makers in China accepted the aim of a fair income distribution as a political issue of great importance. In this paper, richness is defined in the political-philosophical tradition as the right measure for one’s own needs and wants; only its environmental aspect is focused on in this study. The development of the Chinese environmental conditions is compared with the German ones and the former’s future outlook is judged optimistically because of the achievements in the last five years. However, the complexity and fragility of the environmental system will within a decade confront Chinese politicians with the same problems as it does right now in Germany. In order to provide a solution addressing this development, this paper analyzes what Karl Marx had to say on the long-run dynamics of the economic system. He saw poverty as a necessary yet unintended consequence of the capitalistic system and used this insight as a “precision tool for the study of social change” (Elster 1986), which can also be employed to examine the unintended repercussions of economic activity on nature. Marx, who studied environmental and resource issues in detail, thought that the inventiveness of the capitalistic system would finally overcome all of them in the course of time. In view of the fact that three billion people on earth still have a backlog demand to satisfy basic needs and in addition a further three billion are expected to be born until 2050, the future of the natural environmental conditions looks somber. If it is not possible to decouple economic growth from ensuing environmental strain, Marx may well be right after all in his prediction that the capitalistic system will collapse, although in quite a different manner than he thought. This being the case we take recourse to the thoughts of one of the influential intellectual German figures, to Romano Guardini. He foresaw changes in the self-perception of humankind and in the comprehension of nature. These imply a shift in the ethos of government as well, which would in turn pose three great challenges to politics: (i) understanding nature in a new light, (ii) listening to what drives human hearts, and (iii) governing according to law.
    Keywords: Wealth; Distribution; PR China; Environment; Sustainabilit y
    JEL: Q56 B14 B51 D31 D63 D90 O13 P26
    Date: 2012–06–21
  3. By: Armon Rezai; Lance Taylor; Reinhard Mechler
    Date: 2012
  4. By: Ugo Pagano
    Abstract: The last three decades have witnessed the emergence of a new species of capitalism. In spite of marked differences among its different national varieties, a common characteristic of this species can be found in the global monopolization of knowledge. This monopolization involves hierarchical relations among firms and between capital and labor because the capital of some firms includes the exclusive ownership of much of the knowledge used in production. Since the 1994 TRIPS agreements, the growing commoditization of knowledge has extended the role of closed science and closed markets at the expense of open science and open markets. The intrinsic long-term dynamics of this species of capitalism are increasingly characterized by inequality and stagnation. In order to exit from the current crisis, we must change many features of Intellectual Monopoly Capitalism and rely on an eclectic approach that draws insights from the Liberal, the Keynesian and the Marxian traditions
    Keywords: intellectual monopoly, great depression, eclecticism
    JEL: F55 G01 B52 E11 E12
    Date: 2012–02
  5. By: Ugo Pagano
    Abstract: The two major contributions of Ronald Coase, written at distant points of his long life, have been often interpreted as different and, somehow, contradicting views of the merits of the market mechanism. We argue that the underlying point of the two articles is the same and it can be summarized by the statement that no institution is a free lunch. When the unity of the Coasian theory is properly understood, it offers a powerful challenge to standard neo-classical production theory and opens new analytical tools to understand and to compare the institutions of production.
    Keywords: Coase, Returns to Scale, Transaction Costs, Production Entitlements
    JEL: B29 D02 D29 L23
    Date: 2012–02
  6. By: Fabio petri
    Abstract: The paper discusses three redefinitions of the labour theory of value: the New Interpretation of Duménil and Foley, the approach of Wolff-Callari-Roberts, and the Temporal Single System approach. In them the labour theory of value loses the role of instrument for the determination of the rate of profit and becomes a gratuitous reinterpretation of independently determined prices as ‘representing’ quantities of labour value on the basis of the undemonstrated postulate that only labour produces exchange value. It is argued that these approaches are unable to defend the thesis that profits result from labour exploitation because such a thesis must rest on the causes of wages below their potential maximum, causes that these redefinitions leave unexplained and in fact open to neoclassical explanations. They evidence an imperfect grasp of the foundations of the thesis in Marx that labour is exploited, foundations better grasped by P. Garegnani and clarified here with an example.
    JEL: B51
    Date: 2012–06
  7. By: Martinho, Vítor João Pereira Domingues
    Abstract: With this work it is intended to analyze the contributions of the Keynesian theory to the explanation of the regional evolution in Portugal. Considering the Keynesian models in different perspectives and taking into account the Verdoorn (1949) relationship it is did data and econometric analysis for the Portuguese economy in the period from 1995 to 1999. There are not many or none works based in the Keynesian theory and in the Verdoorn relationship for Portugal, namely at regional level. On the other hand the models based in this theory are regularly used to explain the regional economic growth in many countries. So, it is thought that analyze the economic Portuguese context with this theory is an important contribution to the economic theory and to the Portuguese understanding. As main conclusion it can be said that the Keynesian theory show for Portugal, in this period, regional and sectoral divergence. --
    Keywords: Keynesian theory,Verdoorn law,Portuguese regions
    JEL: O18 C23
    Date: 2012–06–18
  8. By: Anderson, Gordon
    Abstract: Aphorisms that "Rising tides raise all boats" or that material advances of the rich eventually "Trickle Down" to the poor are really maxims regarding the nature of stochastic processes that underlay the income/wellbeing paths of groups of individuals. This paper looks at the implications for the empirical analysis of wellbeing of conventional assumptions regarding such processes which are employed by both micro and macro economists in modeling economic behavior. The implications of attributing different processes to different groups in society following the club convergence literature are also discussed. Various forms of poverty, inequality, polarization and income mobility structures are considered and much of the conventional wisdom afforded us by such aphorisms is questioned. To exemplify these ideas the results are applied to the distribution of GDP per capita in the continent of Africa. --
    Keywords: Stochastic processes,poverty,inequality,wellbeing measurement
    JEL: C22 D63 D91 I32 O47
    Date: 2012

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