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on Post Keynesian Economics |
| By: | Hans-Werner Sinn |
| Abstract: | Marx made significant contributions to macroeconomics, laying the grounds for both Keynes’s theory of aggregate demand and Schumpeter’s theory of creative destruction. His law of the tendency of the rate of profit to fall parallels Alvin Hansen’s theory of secular stagnation which has recently received much attention among scholars studying the financial crises in Japan, the US and the Eurozone. This article argues that part of the new stagnation does not result from a natural exhaustion of investment possibilities, but from an overly loose central bank monetary policy that keeps zombie banks and their zombie clients alive and blocks the emergence of new start-up firms. |
| Date: | 2017 |
| URL: | http://d.repec.org/n?u=RePEc:ces:ceswps:_6463&r=pke |
| By: | Hanappi, Hardy |
| Abstract: | Innovation in theory building usually follows the prescription of ‘normal science’ as described by Thomas Kuhn in his account on the history of theoretical physics, see [Kuhn, 1962]. What already had been postulated by Descartes, compare [Descartes, 1637], as a signum of science, namely the systematic advance towards smaller, more specialized, partial problems that are easier to solve, this procedure still prevails in the social sciences till today. Contrary to this piecemeal engineering approach, Joseph Schumpeter made the character mask of the revolutionary entrepreneur to his hero of progress – at least as far as innovation in the production of commodities is concerned, [Schumpeter, 1911]. Of course, history shows that both forms of innovation are alternating: If the slow advance and broadening of a prevailing mainstream gets stuck and the contradictions it produces start to accumulate quickly, then it is time for a revolution – in the material world (compare [Hanappi & Wäckerle, 2016]) as well as in its scientific correlate. It is time for a metamorphosis. In which direction a theoretical innovation in times of metamorphosis shall point clearly has to remain an unanswered question. The best characterization of its general methodological form still seems to be Schumpeter’s dictum. It is a new combination of (existing) elements. The existing elements typically should concern burning problems of the troubled mainstream (compare [Hanappi, 2016]), and the adjective ‘new’ means that they so far are not connected to each other in the stagnating mainstream approach. The global political economy as well as its theoretical reflection in mainstream theory undoubtedly currently is in a state that calls for a revolutionary metamorphosis. This paper therefore sets out to develop a new combination of three seemingly unconnected ideas, which each address a fundamental contradiction. The first idea concerns the contradiction between the rich and the poor parts of the global economy, the second idea concerns the driving force of progress of the human species and its impediments, and the third idea concerns the contradiction between syntax and semantics of the formal representation of the first two contradictions. Contrary to papers in ‘normal science’, which in a conclusion propose a solution for their research question, this paper avoids to pretend a finite horizon of its arguments. As is appropriate for a proposed theoretical innovation it just offers a new open-ended contribution to the rapidly evolving discourse in the middle of metamorphosis. |
| Keywords: | Political Economy, Innovation in Theory |
| JEL: | C50 P10 P16 |
| Date: | 2017–10–19 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:82511&r=pke |
| By: | Miguel D. Ramirez (Department of Economics, Trinity College) |
| Abstract: | This paper critically discusses the important and relevant—not to mention controversial— views of Ricardo and Marx on the impact of machinery on labor productivity, the organization of production, and the wages and employment prospects of the working class during the capitalism of their day. First, the paper turns to Ricardo’s assessment of the introduction of machinery and its likely effects on the laborer and the rate of profit and accumulation—one which went through a substantial revision (and reversal) between the first and third editions of his Principles of Political Economy and Taxation. Then we discuss Marx’s own critical analysis of the historical development of machinery and its impact on the labor process, the so-called “compensation principle,” and how the rising organic composition of capital ostensibly generates a “redundant or surplus-population”during the course of capitalism development. We highlight Marx’s intellectual debt to Ricardo (and John Barton) insofar as his theory of technological unemployment is concerned. Lastly, the paper summarizes the views of Ricardo and Marx and offers some concluding remarks. |
| Keywords: | : Capital; compensation principle; fixed vs. circulating capital; gross vs. net income; machinery; rate of surplus-value (profit); Say’s Law of Markets; surplus-population; time of production; turnover of capital |
| JEL: | B10 B12 B14 |
| Date: | 2017–11 |
| URL: | http://d.repec.org/n?u=RePEc:tri:wpaper:1706&r=pke |
| By: | Mc Kenzie, Rex A. (Kingston University London) |
| Abstract: | This article is about South Africa in the post-apartheid period. It has two aspects; first it examines the social and political process through which the African National Congress (ANC) shifted its emphasis away from the construction of the nationalist project (as defined by its 1955 Freedom Charter), towards a world view that privileges markets as the main organising mechanisms in society. Inevitably, accompanying this shift to neoliberalism there has been a corresponding surrender of macroeconomic economic policy autonomy. Such policy is now geared to propitiating global markets that periodically exhibit high degrees of instability. The question arises – how is the ANC able to manage two diametrically opposed tendencies without social upheaval and dislocation? The answers proffered here centres on hegemonic and dependency dynamics that are in motion in contemporary South Africa. |
| Keywords: | South Africa; Neoliberalism; African National Congress; |
| JEL: | N17 O11 O20 O55 P16 |
| Date: | 2017–11–01 |
| URL: | http://d.repec.org/n?u=RePEc:ris:kngedp:2017_004&r=pke |