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on Heterodox Microeconomics |
| By: | Kurose, Kazuhiro; Yoshihara, Naoki |
| Abstract: | The purpose of this paper is to examine the critical arguments made by Burmeister, Samuelson, and others with respect to Sraffa (1960). In his arguments about the standard commodity, Sraffa assumed that a change in income distribution has no effect on the output level and choice of techniques. However, critics argue that the interdependence among changes in income distribution, output level, and choice of techniques should be considered in the arguments on the invariable measure of value and the linearity of income distribution. Given this debate, this paper defines a generalisation of the standard commodity by considering general economies with non-increasing returns to scale, in which such interdependence is a universal feature. Moreover, it is shown that the generalised standard commodity can serve as an invariable measure of value in those general economies. Finally, this paper characterises the necessary and sufficient condition under which the linear functional relation of income distribution is obtained in those economies. |
| Keywords: | Ricardo’s invariable measure of value, Sraffa’s standard commodity, Linear relation of income distribution |
| JEL: | B51 D30 D51 |
| Date: | 2014–05 |
| URL: | http://d.repec.org/n?u=RePEc:hit:hituec:608&r=hme |
| By: | Meacci, Ferdinando |
| Abstract: | ABSTRACT The controversies between Ricardo and Malthus reached a new peak when Malthus published his pamphlet The Measure of Value Stated and Illustrated and Ricardo responded by his critical Notes on Malthus’s ‘Measure of Value’ (1823 [1992]) and by a further round of correspondence with Malthus (Works, IX). The new (and final) stage of these controversies was concerned with the two authors’ conflicting theories of value and, within these theories, with the excruciating issue of the invariable measure of value. Starting from some insights provided by Malthus and Ricardo in their major or final contributions, this paper deals with a rather neglected component of their controversies, i.e. with the theory of the value of labour as distinct from the value of its products. This will be done by highlighting two sets of ambiguities which affect both Ricardo’s and Malthus’s arguments. One of these hinges on the ambiguity conveyed by the word labour in so far as this reflects the three different concepts of labour power, living labour and dead labour. The other set hinges on the different ambiguity conveyed by the word value especially when it comes to the value of labour. For this word was used in those controversies (as well as in other parts of classical theory) to convey not only the two elementary concepts of use-value and exchangeable-value but also, within the former concept, the two further concepts of the (positive) use-value of labour from the standpoint of its employer, and of the (negative) use-value (disutility) of labour from the standpoint of the labourer. The latter is the sense in which Smith’s ambiguous notion of the “value of labour to the labourer” and his related corollary of the constant “price” of labour (WN, I,V,7-8) must be understood if his system of thought (including its crucial notion of value as labour command) is to stand against Malthus’s misleading attempt to protect it from Ricardo’s criticisms. In this sense, Malthus’s attempt and Ricardo’s criticisms may be jointly regarded as a result of their common error of understanding the value of labour exclusively in the sense of its exchangeable value (which is rightly regarded by Ricardo as –normally- varying and wrongly assumed in Malthus’s Measure of Value as –strangely- constant). |
| Keywords: | Smith, Ricardo, Malthus, value of labour |
| JEL: | B12 B2 B22 |
| Date: | 2014–04 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:55948&r=hme |
| By: | Yoshihara, Naoki |
| Abstract: | This report explores the development of exploitation theory in mathematical Marxian economics by reviewing the main controversies surrounding the definition of exploitation since the contribution of Okishio (1963). The report first examines the robustness and economic implications of the debates on the Fundamental Marxian Theorem, developed mainly in the 1970s and 1980s, followed by the property relation theory of exploitation by Roemer (1982). Then, the more recent exploitation theory proposed by Vrousalis (2013) and Wright (2000) is introduced, before examining its economic implications using a simple economic model. Finally, the report introduces and comments on recent axiomatic studies of exploitation by focusing on the work of Veneziani and Yoshihara (2013a). |
| Keywords: | Fundamental Marxian Theorem, Property Relations Definition of Exploitation, Profit-Exploitation Correspondence Principle |
| JEL: | D63 D51 |
| Date: | 2014–05 |
| URL: | http://d.repec.org/n?u=RePEc:hit:hituec:607&r=hme |
| By: | Gabriel Burdín (Universidad de la República (Uruguay). Facultad de Ciencias Económicas y de Administración. Instituto de Economía) |
| Abstract: | Are high-ability individuals more likely to quit egalitarian regimes? Does the threat of exit by talented individuals restrict the redistributive capacity of democratic organizations? This paper revisits that long-standing debate by analyzing the interplay between compensation structure and quit behavior in the distinct yet underexplored institutional setting of worker-managed firms. The study exploits two novel administrative data sources: a panel of Uruguayan workers employed in both worker-managed and conventional firms; and a linked employer–employee panel data set covering the population of Uruguayan worker-managed firms and their workers from January 1997 to April 2010. A key advantage of the data is that it enables one to exploit within-firm variation on wages to construct an ordinal measure of the worker ability type. The paper's four main findings are that (1) worker-managed firms redistribute in favor of low-wage workers; (2) in worker-managed firms, high-ability members are more likely than other members to exit; (3) the hazard ratio of high-ability members is lower for founding members and for those employed by worker-managed firms in which there is less pay compression; and (4) high-ability members are less likely to quit when labor market conditions in the capitalist sector are less attractive. This paper contributes to the study of the interplay between equality and incentives that permeates many debates in public finance, comparative economic systems, personnel and organizational economics. |
| Keywords: | labor managed firms, redistribution, compensation structure, job mobility |
| JEL: | H00 J54 J62 M52 P0 |
| Date: | 2013–10 |
| URL: | http://d.repec.org/n?u=RePEc:ulr:wpaper:dt-12-13&r=hme |
| By: | Hamid Bouchikhi (Accounting / Management Control Department - ESSEC Business School); John R. Kimberly (University of Pennsylvania - University of Pennsylvania) |
| Abstract: | As of July 1, 2010, the College of Humanities and Social Sciences at the University of the Holy Spirit (UHS) has a single Department of Economics. However, in the seven prior years, there were two economics departments, one that was resolutely mainstream and the other that was just as resolutely heterodox. What accounts for this unusual organizational arrangement? We show that this arrangement was part of a protracted conflict about the kind of economics that befits the Catholic identity of UHS that resulted, ultimately, in a full embrace of mainstream economics in July 2010. We draw on and amend Oliver's (1991) typology of organizational responses to institutional processes and investigate why and how UHS went from deliberate avoidance to full acquiescence to mainstream economics. Our analysis suggests that while organizations may be compelled to adapt to dominant norms, as institutional theorists contend, the process of adaptation involves a variety of conflicting moves and counter moves that engage identity and power and that require forceful leadership to resolve. |
| Keywords: | Institutional Isomorphism ; Micro-processes ; Organizational Adaptation |
| Date: | 2014–05 |
| URL: | http://d.repec.org/n?u=RePEc:hal:journl:hal-00993435&r=hme |
| By: | Pedro Garcia Duarte; Yann Giraud |
| Abstract: | Some historians argue that the history of economic thought (HET) is useful and important to economists and that historians should remain in economics departments. Others believe that historians’ initiatives toward economists are doomed in advance to failure and that they should instead ally themselves with historians and sociologists of science located in humanities departments. Generally, the contributions that are devoted to reviewing the state of HET take a firm side for either one of these two positions and therefore have a prescriptive view on how history should be written. By contrast, our paper proposes a descriptive account of the kind of contributions to HET that have been published in major economics journals over the past two decades. To avoid definitional issues over HET, we use the B category of the JEL classification to retrieve and analyze the relevant literature. We show that, though contributions to HET are still found in top economics journals, the rate of publication of such papers has become increasingly uneven and the methods and narrative styles they adopt are increasingly remote from that advocated in the sub-disciplinary literature. For this reason, historians who are still willing to address the economics’ community should be more interested in expanding the frontiers of their field rather than in trying to anticipate their targeted readers’ preferences.. |
| Keywords: | history of economics; economics journals; American Economic Review; Journal of Economic Literature; Journal of Economic Perspectives; Economic Journal |
| JEL: | B20 A14 B40 B29 |
| Date: | 2014–05–08 |
| URL: | http://d.repec.org/n?u=RePEc:spa:wpaper:2014wpecon6&r=hme |
| By: | Simone Pace (Dipartimento di Filosofia della Scienza ed Epistemologia, University of Pavia) |
| Abstract: | The financial world is basically divided in two: on one hand there are the experts, on the other hand the uninitiated. And, very often, it is a system that works: in very few (and very crazy) decided in fact to heal themselves, while the majority supports this division between secular and experts or specialists, going to the doctor in case of an illness, and getting a diagnosis and a cure that will put out the profane state of malaise in exchange for a financial benefit. The strange thing is, though, that in the economy not doing so. To better present the matter experts and laymen will consider them for what they have in common, their basic human and what separates them, the knowledge of the object. I will try to evaluate the effect of a greater knowledge on how to manage risk, as it is called the unexpected in the economy, and decisions arising therefrom, profane than the alternative. Experts and laymen in this chapter represent two different ways of approaching complexity: a top-down approach, with its strategy of op-posing the complexity as much complexity in the form of an elaborate theoretical framework, and a bottom-up approach, with the respective strategy of managing complexity through simplicity (which is, basi-cally, the daughter of complexity, as we'll see). Using the concept of epistemic arrogance, stemming from econom-ic’s practice of a science in which the points of view and the currents are sufficiently numerous to very often force themselves to such arro-gance as a defense mechanism, we’ll see its effects as a dynamic of authority-power, laying on human docility. This paper is substantially to be understood as an attempt to adapt the ecological agent-based modeling to a field that has, in my opinion, all papers in order to show, at least in theory (but I will try to use, whenever I can be, practical research, based on Nobel laureate Daniel Kahneman's research and sprung up in recent years in behavioral economics) the potential, from the philosophical point of view of epistemology of complexity, for a greater understanding and exploitation of the risk, providing major chances of comprehension and exploitation of risk intended as an effect of emergence, the main com-plex system’s feature. So I’ll see that there is, indeed, a constructive chance from the con-venience of the secular model of risk management, trying to re-evaluate the way it consciously ruling fallacious to proceed; this has been made trying to opposing, at the use of a highly complex knowledge making use of logical-mathematical sophistication to its progress, a hard-wired heuristic system, that is based on the principle of less-is-more, a source of transparency, robustness, and cognitive fluidity: characters whose importance is too often overlooked, especially in econometric’s research. |
| Keywords: | Agent-based economics, heuristics, qualitative economics |
| JEL: | B49 |
| Date: | 2014–05 |
| URL: | http://d.repec.org/n?u=RePEc:pav:demwpp:demwp0077&r=hme |
| By: | Engelbert Stockhammer (Kingston University); Jo Michell (University of the West of England) |
| Abstract: | Goodwin cycles result from the dynamic interaction between a profit-led demand regime and a reserve army effect in income distribution. The paper proposes the concept of a pseudo-Goodwin cycle. We define this as a counter-clockwise movement in output and wage share space which is not generated by the usual Goodwin mechanism. In particular, it does not depend on a profit-led demand regime. To illustrate this, a simple Minsky-type model is extended by a reserve army distribution adjustment. In this model the cycle is generated by the interaction of financial fragility and demand. The wage share rises at higher levels of output but this generates no feedback so that, by design, demand does not react to changes in income distribution. But the model does exhibit a pseudo-Goodwin cycle in the output-wage share space. This holds true even if we introduce a wage-led demand regime. This demonstrates that the existence of a counter-clockwise movement of output and the wage share cannot be regarded as proof of the existence of a Goodwin cycle and a profit-led demand regime. |
| Keywords: | business cycles, Goodwin cycle, Minsky cycle, financial fragility, distribution cycles, Post Keynesian economics |
| JEL: | E11 E12 E32 |
| Date: | 2014–05 |
| URL: | http://d.repec.org/n?u=RePEc:pke:wpaper:pkwp1405&r=hme |
| By: | Rémi Jardat (ISTEC - Institut supérieur des Sciences, Techniques et Economie Commerciales - ISTEC, CNAM Paris - Conservatoire National des Arts et Métiers - Conservatoire National des Arts et Métiers (CNAM)) |
| Abstract: | Purpose: This critique of Piketty's Capital in the Twenty-First Century summarizes and comments on the main tenets of the author's principal theory. Our aim is to point out the book's contributions to critical debate around social and economic issues, while giving special emphasis to its theoretical and epistemological relevance for management science. Design/methodology/approach: Based on a careful reading of the book, in the original French and English translation versions, we explore Piketty's arguments and proposals, and attempt to place his "scholarly discourse" in relation to Marx's "worldview" as well as the philosophy of the Enlightenment. Findings: The book's potential impact over the long run is extremely high, ostensibly enough to make it as important as Marx's work but relying on a decidedly different method and philosophy. We also consider the strong complementariness between this work and that of Pierre Rosanvallon in the field of political science. Some similarities with Fukuyama's approach are also considered, but on a much lesser note. Research limitations/implications: The question of unemployment, which is given little attention in Piketty's work, is not addressed here. Social applications: In contrast with Piketty's book, this paper intends to find social application only within the microcosm of the scholarly community. Originality/value: We hope to draw a link between the book's contribution to economic thinking and its philosophical underpinnings, that is, by presenting a reading that is both a positivist assessment and an attempt to decipher underlying assumptions. |
| Keywords: | Piketty, Capital, Marxism, Enlightenment, Rosanvallon, Wallerstein |
| Date: | 2014–05–05 |
| URL: | http://d.repec.org/n?u=RePEc:hal:wpaper:hal-00990772&r=hme |
| By: | MArco Bee; Massimo Riccaboni; Stefano Schiavo |
| Abstract: | The proper characterization of the size distribution of business firms represents an important issue in economic literature, with the most common reference distribu- tions being the lognormal and the Pareto varieties. This analysis is related to some methodological issues that are rarely properly addressed in applied work, and may significantly affect the results: the major difficulties arise from low power of the tests caused by limited sample size and the common practice of binning the data. In this paper we contribute to this body of literature by analyzing the size distribu- tion of all French companies, strongly rejecting the hypothesis that it is a Pareto distribution. Moreover, we argue that the lognormal distribution is a more reason- able first-cut benchmark for the entire population of firms. This is especially true for single-product firms, while we show the emergence of a Zipf tail for the class of multi-product companies. Our findings are in strong agreement with some recent theoretical contributions, which predict that the size distribution depends on a set of industry specific determinants. |
| Keywords: | Firm size distribution, multi-product firms, Pareto, ZipfÕs law, lognormal |
| JEL: | C46 L11 L25 |
| Date: | 2014 |
| URL: | http://d.repec.org/n?u=RePEc:trn:utwpem:2014/03&r=hme |
| By: | Cristina Borderías (Universidad de Barcelona, Barcelona,Spain); Pilar Pérez-Fuentes (Universidad del País Vasco/Euskal Herriko Unibertsitatea, Spain); Carmen Sarasúa (Universidad Autónoma de Barcelona,Barcelona,Spain) |
| Abstract: | La teoría económica ha revisado en los últimos años dos ideas básicas sobre el funcionamiento económico de las familias: que el ingreso familiar es la suma del ingreso de sus miembros (el income-pooling) y que el acceso a los recursos familiares por parte de los familiares que comparten hogar es igualitario. La desigualdad en el acceso a los recursos familiares (entre mujeres y hombres por un lado, y entre adultos, ancianos y niños por otro) se entiende como input (por ejemplo, que las mujeres coman menos y peor que los hombres), y como output (por ejemplo, que las mujeres tengan peor salud, mayor sobre-mortalidad epidémica o menor altura por estar peor alimentadas y peor atendidas médicamente). A pesar de que la desigualdad en el consumo intra-familiar es hoy objeto de análisis por parte de la Economía y los organismos económicos internacionales, apenas ha sido desarrollado por la Historia económica. En este artículo estudiamos la desigualdad en el acceso de hombres y mujeres a algunos de los recursos que consumían las familias en la España del siglo XIX: alimentos, bebidas alcohólicas, vestido y calzado. Las Topografías médicas que usamos como fuente principal sugieren que el acceso desigual a los recursos familiares tuvo un fuerte impacto en la salud y el bienestar de sus miembros. |
| Keywords: | consumo, desigualdad, economía familiar, género, bienestar. |
| JEL: | I14 I15 I31 N13 N33 R20 |
| Date: | 2014–05 |
| URL: | http://d.repec.org/n?u=RePEc:ahe:dtaehe:1411&r=hme |
| By: | Anke Hassel |
| Abstract: | This paper investigates the causes of, and reactions to, the Eurozone crisis, focusing in particular on the institutional foundations of the four Southern European Eurozone countries that have encountered an acute sovereign debt crisis. Applying the basic arguments featured in the Varieties of Capitalism literature, the paper aims to show how the interaction of the institutional set-up of coordinated and mixed market economies, with the effects of the common currency area, can explain both the evolution of the crisis, as well as the reactions to it. This paper interprets the sovereign debt crisis in the Eurozone as the combination of two features: firstly, the architecture of the common currency area, which instituted a common interest rate for widely heterogeneous regional economies, and secondly, the specific institutional foundations of two types of economies participating in the Eurozone, namely coordinated market economies and mixed market economies. Understanding these two factors and their interaction not only helps to explain why the Southern European countries were particularly vulnerable to exploding public debt, but also why, during the on-going resolution of the Eurozone crisis over the last two years, policy makers have persistently preferred austerity over the mutualisation of debt. The compensatory role of the state in mixed-market economies thereby undermines the effectiveness of financial bail-outs for economic growth strategies. |
| Keywords: | comparative political economy, Varieties of Capitalism, European Monetary Union, institutional analysis |
| Date: | 2014–05 |
| URL: | http://d.repec.org/n?u=RePEc:eiq:eileqs:76&r=hme |
| By: | van Dijk, M.A. |
| Abstract: | __Abstract__ Address delivered in shortened form at the occasion of accepting the appointment as Extraordinary Professor of Financial markets on behalf of Vereniging Trustfonds EUR at the Rotterdam School of Management, on Frifay march 7, 2014. "In this address, I consider “The Social Value of Finance” from two perspectives. First, I reflect on the value for society of finance as an academic field. The recent global financial crisis has undermined the reputation of the field of finance, with the inability to foresee the crisis as one of the most prominent criticisms voiced by the media and the general public. I argue that this criticism is by and large unwarranted, primarily because the financial system has grown to be so complex that it is virtually impossible to predict the occurrence (let alone the timing and extent) of severe financial crises. However, I do believe that there are other reasons for concern about the academic field of finance. As a field, we do not get the balance right in what questions to focus on. Also, we sometimes lose ourselves in largely academic debates. One likely explanation is the “physics envy” that many economists seem to suffer from and that has led us to seek refuge in sophisticated mathematics and statistics. This development has resulted in a focus on narrow questions that can be answered quite precisely, instead of broad questions that are much harder to answer. The social value of finance as an academic field could be greater if we would be more focused on broader questions, more open minded about other fields and methodologies, and more modest about the extent of our knowledge. Second, to follow up on these aspirations, I present a new research agenda on the value for society of finance in the sense of a financial system (that is, the social value of banks and financial markets). Although the belief that financial systems fulfill an important role in society is widespread, there is surprisingly little evidence on whether and how financial systems in different countries actually fulfill their social functions. The first project in this research agenda shows that the costs to society when finance goes wrong can be large. Using data on 187 banking crises in 126 countries, I find a significant decline in average life expectancy, birth rates, and primary school enrollment, and a significant increase in poverty and adolescent fertility in the six years after the start of a banking crisis. These effects mainly stem from less-developed countries. In the second project, I propose a cross-country empirical analysis on the extent to which financial systems fulfill two of their key social functions: capital allocation (that is, channeling capital in the economy to its most productive use) and consumption smoothing (that is, allowing households to cope with income shocks). In the third project, I will examine the development and contribution to society of a considerable number of newly established stock markets (or “nascent markets”) over the past 25 years. " |
| Keywords: | social value, financial research, financial systems, financial crises, capital allocation, consumption smoothing, nascent stock markets |
| JEL: | F3 G1 G2 G01 |
| Date: | 2014–03–07 |
| URL: | http://d.repec.org/n?u=RePEc:ems:euriar:51323&r=hme |
| By: | Benjamin David |
| Abstract: | This paper analyses the role of Information and Communication Technologies (ICT) on the job market polarization. We rely on an evolutionary framework by applying a “distance from mean approach”. Using data for 8 industrialized economies, we account for probable heterogeneous and timevarying effects through the estimation of a semi parametric smooth coefficient model. Our results show a significant contribution of ICT on polarization dynamics with some differences between countries and industries. We also find evidence that diffusion of ICT is initially accompanied by a Skill Bias Technological Change (SBTC), then contributing to job market polarization. Finally, our findings highlight a progressive weakening of the positive link between ICT diffusion and the increasing demand for high-skilled workers over time. |
| Keywords: | ICT, Evolutionary economics, Polarization of labor market, Semiparametric Smooth Coefficient Model. |
| JEL: | C14 E11 J21 O33 |
| Date: | 2014 |
| URL: | http://d.repec.org/n?u=RePEc:drm:wpaper:2014-25&r=hme |
| By: | Didier Le Maitre (GRANEM - Groupe de Recherche Angevin en Economie et Management - Université d'Angers) |
| Abstract: | Le management privilégie souvent, en se fondant sur diverses théories, le point de vue des dirigeants et des actionnaires, au détriment de celui des salariés. L'article postule que la source essentielle de la pénalisation est liée aux intérêts et aux comportements d'individus. La section I évoque les fondements historiques du concept d'intérêt matériel et la prééminence de cette passion en se référant à des travaux de Hirschman. La section II traite de la nature de l'action humaine et propose un guide d'action du chercheur en gestion en se référant à la praxéologie de Von Mises. |
| Date: | 2013–05–31 |
| URL: | http://d.repec.org/n?u=RePEc:hal:journl:hal-00991951&r=hme |