nep-pke New Economics Papers
on Post Keynesian Economics
Issue of 2024‒04‒08
five papers chosen by
Karl Petrick

  1. Financialisation and demand and growth regimes: A review of post-Keynesian contributions By Hein, Eckhard; van Treeck, Till
  2. Demand regimes and the business-cycle: Feedback effects between capacity utilization and income distribution taking into account overhead labor - SVAR-estimates for Germany (2007 - 2021) By Hansen, Mads R.
  3. article (C-1-a) Criticism of shareholder and Marxist discourse on the processes of acquisition and enrichment By Andre Moulin
  4. Overcoming the jobs-versus-environment dilemma: A feminist analysis of the foundational economy By Kuhls, Sonia
  5. An alternative derivation of Sraffa’s fundamental equation with applications By Saccal, Alessandro

  1. By: Hein, Eckhard; van Treeck, Till
    Abstract: We review post-Keynesian assessments of the macroeconomic demand and growth impacts of financialisation. First, we examine the channels of influence of financialisation on distribution and on the different components of private aggregate demand, i.e. investment, consumption and net exports. Since increasing shareholder power and shareholder value orientation of management has been viewed as key to understanding the macroeconomics of financedominated capitalism, we start with the effects of financialisation in the context of the postKeynesian theory of the firm and explain the other channels from there. An important result is the emergence of 'profits without investment' demand and growth regimes, for which we point out the condition based on Kalecki's profit equation. The third section then turns to the post-Keynesian analysis of the different variants of 'profits without investment' demand and growth regimes in finance-dominated capitalism. We review the different levels of analysis, the national income and financial accounting de-composition approach as well as different attempts at identifying growth drivers. We argue that these different levels of analysis are complementary for our understanding of demand and growth regimes under financialisation.
    Keywords: Financialisation, demand and growth regimes, stagnation, post-Keynesian distribution and growth models
    JEL: E12 E21 E22 E25 E44
    Date: 2024
  2. By: Hansen, Mads R.
    Abstract: In this paper, Structural Vector Autoregressive (SVAR) models of quarterly data between 2007 and 2021 are estimated to assess short-term regimes of aggregate demand and distribution in Germany. The obtained Impulse Response Functions (IRFs) of the conventional neo-Goodwinian baseline case, with an aggregate wage-share, are compared to an alternative model, disaggregating the wage-share. The robustness of the results is tested by imposing an alternative post-Kaleckian ordering of (contemporaneous) causation. For the neo-Goodwinian baseline model, a profit-led demand schedule and a pro-cyclical wage-share are found. Disaggregation reveals, however, that the pro-cyclical wage-share is mainly driven by supervisory wages, while positive shocks in the direct wage-share had a stronger (negative) impact on aggregate demand, than the supervisory wage share. Imposing post-Kaleckian restrictions of causation yields a consistent (although weaker) estimate of the demand-regime but reversed distributive regimes: The aggregated wage-share behaves counter-cyclical, with the supervisory wage-share reacting stronger (negative) than the direct wage share, when subject to a positive shock in capacity utilization.
    Keywords: Demand Regime, Aggregate Demand, Distribution, Capacity Utilization, Business Cycle, SVAR, Functional Income Distribution, Overhead Labor, Germany
    JEL: E12 E25 E6
    Date: 2024
  3. By: Andre Moulin (CPN - Centre Pierre Naville - UEVE - Université d'Évry-Val-d'Essonne - Université Paris-Saclay)
    Abstract: The first characteristic of the capitalist is his objective of monetary accumulation. For this purpose, the first thing to be done is the acquisition of the means of production (which are then profit-making). The second characteristic of capitalism are the rules, the ways of acquiring its means of production for profit. The first characteristic leads to the exploitation of workers, a subject which has been widely studied. The second characteristic leads to the increasing concentration of wealth, a concentration which has been widely observed without considering the rules of acquisition which are the cause, as if they were self-evident. This characteristic also ensures the monopoly of acquisition of the shareholders and thus the wage relationship of subordination to the shareholders, a relationship which considerably facilitates the exploitation of employees. F. Lordon writes nothing else : "Bourgeois democracy is that regime in which one can speak of everything except that which asserts the social power of the bourgeoisie - namely, in the last instance, the private ownership of the means of production, and the particular form of enrollment which it determines: the wage-labour force. With regard to this article, we complete this assertion with other assertions in order to show the aporia of contemporary discourses, including Marxist ones, and to base our proposals for evolution: (1-) "what asserts the social power of the bourgeoisie" is "the private property of the means of production", (2-) what currently founds this ownership is the so-called contribution to these means of the owner-capitalists, only them, and the complete hiding of the contribution of the labour community of the enterprise, which explains the monopoly of acquisition by the capitalist. (3-) the particular form of enrolment determined by the capitalist, because of his exclusive ownership of the means of production, is the wage-labour force. (4-) the taking into account of all the contributions leads to the majority acquisition of the means of production by the labour community, which will enable it to determine other forms of enlistment than the present wage-labour force. It is the purpose of this article (C-1-a) Critique of shareholder and Marxist discourses on acquisition and enrichment processes to present the actual acquisition processes, to discuss the very similar discourses of shareholder and Marxist on these processes and the impact of all these discourses on future developments, the object of article (C-1-b) Acquisition of the means of production is a quick recall of the rules of acquisition and mainly a proposal of evolution, and the object of article (C-1-c) Financial logic vs. productive logic is to well characterize in the production processes the logic of production and the financial logic. More precisely, this article (1-) distinguishes the two stakeholders in this production when it is for profit, namely the shareholders and the work community of the company, (2-) distinguishes the "means of production" and the "goods and services" produced and made available thanks to these means, (3-) presents some acquisition processes showing the poor contribution of the shareholder who is nevertheless the sole owner, (4-) explains the juridical artifice allowing this, (5-) discusses some discourses about the profitability of capital, (6-) discusses some writings of Marx and Marxists to show the lack of coherence in their discourses about the rules of acquisition of the means of production and the role of the labour community, (7-) considers some proposed evolutions with regard to all these writings and our analysis.
    Abstract: La première caractéristique du capitaliste est son objectif d'accumulation monétaire1. Pour cela, la première chose à faire est l'acquisition des moyens de production (qui sont alors à but lucratif). La deuxième caractéristique du capitalisme sont les règles, les méthodes d'acquisition de ses moyens de production à but lucratif dont nous avons présenté les conséquences en introduction. La première caractéristique pousse à l'exploitation des travailleurs, sujet largement étudié. La deuxième caractéristique conduit à la concentration de plus en plus grande des patrimoines, concentration largement constatée sans pour autant considérer les règles d'acquisition qui en sont la cause, comme si elles allaient de soi. Cette caractéristique2 assure également le monopole de l'acquisition aux actionnaires et donc le rapport salarial de subordination aux actionnaires, rapport qui facilite grandement l'exploitation des salariés. F. Lordon n'écrit pas autre chose3 : « La démocratie bourgeoise est ce régime où l'on peut parler de tout à l'exception de ce qui assoit le pouvoir social de la bourgeoisie — à savoir, en dernière instance, la propriété privée des moyens de production, et la forme particulière d'enrôlement qu'elle détermine : le salariat. Au regard de cet article, nous complétons cette affirmation par d'autres affirmations pour montrer l'aporie des discours actuels, y compris marxistes, et fonder nos propositions d'évolution : (1-) « ce qui assoit le pouvoir social de la bourgeoisie », c'est « la propriété privée des moyens de production », (2-) ce qui fonde actuellement cette propriété, c'est la soi-disante contribution à ces moyens des propriétaires- capitalistes, d'eux seuls, et l'occultation complète de la contribution du collectif de travail de l'entreprise d'où le monopole de l'acquisition par le capitaliste. (3-) la forme particulière d'enrôlement déterminé par le capitaliste, du fait de sa propriété exclusive des moyens de production, est le salariat. (4-) la prise en compte de toutes les contributions conduit à l'acquisition majoritaire des moyens de production par le collectif de travail ce qui lui permettra de déterminer d'autres formes d'enrôlement que le salariat actuel. C'est l'objet de cet article (C-1-a) Critique des discours actionnarial et marxiste sur des procédés d'acquisition et d'enrichissement que de présenter les procédés actuels d'acquisition, de discuter les discours, très proches, actionnarial et marxistes sur ces procédés et l'impact de tout cela sur les évolutions à venir, l'objet de l'article (C-1-b) Acquisition des moyens de production étant un rapide rappel des règles d'acquisition et surtout une proposition d'évolution, et l'objet de l'article (C-1-c) Logique financière vs logique productive étant de bien caractériser dans les process de production la logique de production et la logique financière. Plus précisément, cet article (1-) distingue les deux parties prenantes de cette production lorsqu'elle est à but lucratif, à savoir les actionnaires et le collectif de travail de l'entreprise, (2-) distingue les « moyens de production » et les « biens et services » produits et mis à disposition grâce à ces moyens, (3-) présente quelques procédés d'acquisition montrant la maigre contribution de l'actionnaire pourtant seul propriétaire, (4-) explicite l'artifice juridique permettant cela, (5-) discute quelques discours quant à la rentabilité du capital, (6-) discute quelques écrits de Marx et de marxistes pour montrer l'aporie de leurs discours quant aux règles d'acquisition des moyens de production et au rôle du collectif de travail, (7-) considère des évolutions proposées4 au regard de tous ces écrits et de notre analyse.
    Keywords: salariés, moyens de production, actionnariat, finance, capitalisme, propriété, effet de levier
    Date: 2024–02–22
  4. By: Kuhls, Sonia
    Abstract: This paper examines the potential of the foundational economy as an industrial policy strategy for addressing the challenges posed by the socio-ecological transformation. Grounded in Marxist and feminist theories, the analysis sets out to deconstruct the jobs-versus-environment dilemma, revealing that dignified employment and climate mitigation are jointly imperiled by the capitalist mode of production. Nonetheless, ambitious environmental policies will necessitate structural economic changes and hence labor reallocations. In this context, the paper seeks to establish links between the foundational economy concept - which is primarily concerned with economic development and industrial policy - and sustainability research. I contend that the foundational economy emerges as a promising avenue for addressing potential adverse effects of the socio-ecological transformation for two main reasons. First, it serves as a practical guide for necessary labor reallocations, proposing the absorption of workers into low-carbon, welfare-oriented sectors. Second, it functions as a discursive strategy that directly engages with workers'self-perception and concerns, prioritizing community health and offering socially sustainable and meaningful employment. Despite these merits, the paper underscores the need for the foundational economy to address feminist critiques of labor and unpaid social reproduction to fully unlock its transformative potential. Additionally, the role of trade unions in supporting and shaping the foundational economy warrants further investigation, urging future research to delineate the positionality and strategies of trade unionsin the consolidation of this economic approach.
    Keywords: employment, foundational economy, industrial policy, social reproduction, socio-ecological transformation, trade unions
    JEL: B51 B54 J21 J51 L52 Q56 Q57
    Date: 2024
  5. By: Saccal, Alessandro
    Abstract: I derive Sraffa’s fundamental equation r = R(1 − w) by means of differential equations and optimisation, on which I work three remarks: (i) I analytically provide an alternative formulation of Sraffa’s fundamental equation; (ii) it is analogous to the optimisation problem of a particle moving along a straight line; (iii) the optimisation problem’s objective function is that of the minimisation of R. I additionally ask whether such an optimisation problem may also apply to any corresponding ‘Real System’ of the ‘Standard System’, to which it is already found to apply, and I answer positively. I ulteriorly assess the application of Heisenberg’s Uncertainty Principle to the same equation and derive an equation for the momentum of the particle in terms of its momentum uncertainty and in terms of its position, in which the particle is the ‘Standard Net Product’ and its momentum is R. I finally appraise the brachistochrone problem from a Sraffian perspective and find that in the presence of distributional gravity, for a meaningful mass function for the ‘Standard Net Product’, the optimal path for the distribution of the ‘Standard Net Product’ between profits and wages is no longer r = R(1 − w), but a Sraffian cycloid with specific position coordinates w and r.
    Keywords: brachistochrone problem; cost function; cycloid; distribution; fundamental equation; Heisenberg Uncertainty Principle; income; output; path; profits; wages.
    JEL: B24
    Date: 2024–02–21

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