nep-pke New Economics Papers
on Post Keynesian Economics
Issue of 2020‒12‒07
eight papers chosen by
Karl Petrick
Western New England University

  1. �Openness� as a Methodological Principle of Sraffa�s Economic Thinking By John B. Davis
  2. Capitalist Systems and Income Inequality By , Stone Center; Ranaldi, Marco; Milanovic, Branko
  3. Induced shifting involvements and cycles of growth and distribution By Michalis Nikiforos
  4. Stratification Economics as an Economics of Exclusion By John B. Davis
  5. A Road Not Taken? A Brief History of Care in Economic Thought By John B. Davis
  6. The Sea Battle Tomorrow: The Identity of Reflexive Economic Agents By John B. Davis
  7. Free Trade and Economic Policies: A Critique of Empirical Reason By Boyer, Marcel
  8. Four Phases in the History of Money By Luis Angeles

  1. By: John B. Davis (Department of Economics Marquette University)
    Abstract: This paper discusses the impact of Sraffa�s thinking on economics. It argues increasing specialization in research is producing an �all trees, no forest� fragmentation of economics that creates opportunities for a return to concerns that motivated classical political economy. It associates this with a methodological conception of what a more pluralistic economics involves, and applies this to relationships between production and distribution. A methodological conception of �openness� is traced to a 1931 turning point in Sraffa�s thinking when he used an open-closed distinction to explain the relationship between production and distribution, and engaged in a philosophy of science reasoning reminiscent of systems theory. The paper argues there are important parallels between Sraffa and Gramsci�s thinking regarding the open-closed distinction.
    Keywords: Sraffa, political economy, fragmentation, open-closed, pluralism, Gramsci
    JEL: B2 B4 B5
    Date: 2019–10
  2. By: , Stone Center (The Graduate Center/CUNY); Ranaldi, Marco; Milanovic, Branko
    Abstract: The paper investigates the relationship between capitalism systems and their levels of income and compositional inequality (how the composition of income between capital and labor varies along income distribution). Capitalism may be seen to range between Classical Capitalism, where the rich have only capital income, and the rest have only labor income, and Liberal Capitalism, where many people receive both capital and labor incomes. Using a new methodology and data from 47 countries over the past 25 years, we show that higher compositional inequality is associated with higher inter-personal inequality. Nordic countries are exceptional because they combine high compositional inequality with low inter-personal inequality. We speculate on the emergence of homoploutic societies where income composition may be the same for all, but Gini inequality nonetheless high, and introduce a new taxonomy of capitalist societies. (Stone Center Working Paper Series) Revised
    Date: 2020–11–13
  3. By: Michalis Nikiforos (University of Geneva (CH))
    Abstract: The paper builds on the concept of (shifting) involvements, originally proposed by Albert Hirschman (2002 [1982]). However, unlike Hirschman, the concept is framed in class terms. A model is presented where income distribution is determined by the involvement of the two classes, capitalists and workers. Higher involvement by capitalists and lower involvement by workers tends to increase the profit share and vice versa. In turn, shifts in involvements are induced by the potential effect of a change in distribution on economic activity and past levels of distribution. On the other hand, as the profit share increases, the economy tends to become more wage led. The dynamics of the resulting model are interesting. The more the two classes prioritize the increase of their income share over economic activity, the more possible it is that the economy is unstable. Under the stable configuration, the most likely outcome is Polanyian predator-prey cycles, which can explain some interesting historical episodes during the 20th century. Finally, the paper discusses the possibility of conflict and cooperation within each of the distribution-led regimes.
    Keywords: distribution; economic growth; institutions; social movements; political economy
    JEL: E11 E12 E21 E22 E32
    Date: 2020–11
  4. By: John B. Davis (Department of Economics Marquette University)
    Abstract: Stratification Economics (SE) is an emergent sub-field in economics, but its JEL classification misrepresents its content and its relationship to the whole of economics. This paper first develops a more accurate characterization of SE by identifying its differences with Mainstream Economics (ME), its commonalities with economics in a broad sense, and how the combination of these differences and commonalities define it as a distinct research program. It then applies this definition to an economic goods taxonomy that makes a distinction between local public goods and common pool goods to interpret SE�S distinct research program as an economics of exclusion. The paper closes with a discussion of how SE might explain socioeconomic change in social group identity terms.
    Keywords: stratification, social group identity, complex systems, local public goods, common pool goods, exclusion, political alliance
    JEL: B41 Z13
    Date: 2019–02
  5. By: John B. Davis (Department of Economics Marquette University)
    Abstract: Care is central to the human experience and part of the social provisioning process. Adam Smith recognized this, associating care with sympathy. Later contributions in the political economy tradition also provide scope for an analysis of care, but none as developed as Smith�s. With the emergence of the current mainstream, care is marginalized. Kenneth Boulding�s analysis provides an opportunity to interrogate care in the economy, but he fails to explicitly acknowledge care. It is left to feminist economics to highlight the centrality of care. An implication is that it challenges the conventional rubric of economic organization predicated on self-interest.
    Keywords: care, Smith, feminist economics, Boulding, social provisioning
    JEL: B10 B54 I00 Z00
    Date: 2019–10
  6. By: John B. Davis (Department of Economics Marquette University)
    Abstract: This paper develops a conception of reflexive economic agents as an alternative to the standard utility conception, and explains individual identity in terms of how agents adjust to change in a self-organizing way, an idea developed from Herbert Simon. The paper distinguishes closed equilibrium and open process conceptions of the economy, and argues the former fails to explain time in a before-and-after sense in connection with Aristotle's sea battle problem. A causal model is developed to represent the process conception, and a structure-agency understanding of the adjustment behavior of reflexive economic agents is illustrated using Merton's self-fulfilling prophecy analysis. Simon's account of how adjustment behavior has stopping points is then shown to underlie how agents' identities are disrupted and then self-organized, and the identity analysis this involves is applied to the different identity models of Merton, Ross, Arthur, and Kirman. Finally, the self-organization idea is linked to the recent 'preference purification' debate in bounded rationality theory regarding the 'inner rational agent trapped in an outer psychological shell,' and it is argued that the behavior of self-organizing agents involves them taking positions toward their own individual identities.
    Keywords: reflexivity, Simon, Aristotle identity, self-fulfilling prophecy
    JEL: B11 B25 B41
    Date: 2020–02
  7. By: Boyer, Marcel
    Keywords: Free Trade, Trade Deficit, Public Policies, Grants, Croony Capitalism
    Date: 2020–11
  8. By: Luis Angeles
    Abstract: The history of money can be characterized into four major phases, from the earliest written records during the 3rd millennium BC to the present day. This characterization sheds light on both the nature and the evolution of money, and helps us to understand today’s monetary arrangements. Money evolves over time as the preferred means of payment shift from metal to coinage and from coinage to different forms of debt, and as the unit of account becomes more or less linked to the value of a commodity, in particular gold or silver.
    JEL: E51 E58 G21
    Date: 2020–11

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