Showing posts with label exploitation. Show all posts
Showing posts with label exploitation. Show all posts

Thursday, May 21, 2015

#tbt Michał Kalecki 1943 Political Aspects of Full Employment

In the 72 years since its publication, Michał Kalecki's Political Aspects of Full Employment has received little in the way of faithful formalization. The currency it has found has been mostly in grave departures from its premises and conclusions. For the most part, the paper has been treated as if it were a theory of the business cycle. Perhaps the most notable of these endeavors was William Nordhaus' 1975 paper, although a nod to this direction was recognized by Joan Robinson in her 1972 speech at Cambridge. This view generally sees Kalecki's theory as saying that political power determines macroeconomic outcomes.

To be sure, the theory does derive from the realization of a consequence of part of what may be considered the business cycle – widespread unemployment. However, the meat of Kalecki's argument is not (necessarily) about what causes economic downturns per se so much as the curious way in which large business interests react to them.

In my reading, the curiosity motivating Kalecki is not one of what causes widespread unemployment, but rather why businesses would have an interest in seeing it persist. In this model, Kalecki takes rampant unemployment as a prior condition to his model, and is interested in why business interests would oppose a full employment program even when such a program is to their own benefit.

What Kalecki argues instead is that the very fact of full employment itself gives workers the leverage to bargain for higher wages. For Kalecki, lack of job security acts as a discipline device. With a larger pool of unemployed, workers are easily replaced, and they know it. Thus, any attempt to bargain for higher wages, better working conditions, etc. can be easily remedied by businesses with the sack. Thus, any attempt to take this discipline tool from the capitalist class is viciously opposed in spite of the fact that they stand to make higher profits.

Download the Article Here

Monday, May 11, 2015

March Against Monsanto

So it appears I'm going to be leading a teach-in with Alexandria Eisenbarth after the March Against Monsanto on Saturday the 23rd. It's gonna be at C-Squat downtown. Never been there before, so I'm kind of excited.

It's kind of a weird topic for me to be talking about since I don't do environmental economics. It's not that I don't care about the environment, nor is it that I think that the environment is somehow separate from the economy. I'm just kind of bored by economic models of the environment. To be honest, I don't really think that "economic" considerations should take all that much precedence over environmental issues.

Instead, I'm going to be talking about how ownership structures in capitalism necessarily lead to the exploitation, impoverishment, and disenfranchisement of the majority of the world. I plan to touch on how and why this inequality tends to manifest along identitarian and geographic lines. Then I'm going to explain how this tendency for exploitation to intensify makes the capitalist system fundamentally unstable.

Saturday, May 9, 2015

The Problem with Human Capital as a Factor of Production

Shaikh's "Humbug" paper should have sounded the death knell for the Cobb-Douglas "production" function. Instead of accepting that the Solow residual (A in the equation below) was identically equal to the share-weighted geometric mean of the factor prices, New Classical economists have turned inward.

$$Y = AK^{\alpha}L^{1 - \alpha}$$

Now, the mainstream theory of growth is in constant search to "endogenize" the Solow residual. Thus, the hunt has been on for additional factors to "explain" the Solow residual as "accumulated" factor productivity.

If you take as given the Shaikhian formulation, then it becomes obvious why "total factor productivity" increases over time. Since average wages have generally been increasing over time while the average rate of profit is roughly constant (per the last two Kaldor facts), the Solow residual will necessarily be increasing over time. Thus anything roughly correlated with the average wage rate should allow for the ad-hoc creation of a "factors only" production function.

Sunday, April 26, 2015

Setting the Record Straight

I didn't watch the Bruce Jenner interview. After the backlash from the horrendous questions they asked Janet Mock and Laverne Cox, mainstream media can probably handle a coming-out story.

But they can also stir one up.

Thursday, April 23, 2015

#tbt Herbert Simon 1951 A Formal Theory of the Employment Relationship

Today, I'm thinking about Herbert Simon on labor. In Simon's view, an important and often overlooked characteristic of the employment relationship is the degree of authority granted the employer over the behavior of the employee. In the extreme, a sales contract - the standard economic approach - would have employers paying merely for the product of labor. However, in practice, the employment relationship is one in which employees would likely prefer to do less work while employers would prefer they do more.

Simon used game theoretic notions of bounded rationality to explain the various situations in the labor market that would result in either sale contracts or employment contracts would arise. According to Simon's model, employment contracts will be preferred to wage contracts as information asymmetry about effort expenditure increases and as labor disutility decreases.

I find his approach interesting, mostly for its relative abandonment of supply and demand curve in favor of satisfaction functions. Rather than simply proving the existing of a point of intersection, Simon proposes that a bounded set of wage-behavior pairs could exist that would be acceptable to both the worker and the employer.

Simon proposes an extension to explain the existence and persistence of unions as well. Unlike mainstream economic models, it does not rely on supply and demand, and hence on so-called "market imperfections." Rather, Simon shows that union administration functions as a shift in authority, reducing uncertainty for all parties involved. I wonder what extensions can be made for public assistance or a reserve army.

Download the article here

Monday, April 6, 2015

Sol Invictus

Looks like LK of SD21C has come up with a sun theory of value based on an admittedly amusing caricature of the labor theory of value. While this theory might provide insight into how a solar deity might account for the exploitation of his energy release, it doesn't seem all that useful for understanding capitalism as an actually existing social system:

The source of most energy that reaches the earth is clearly the sun. Without the sun and the energy it provides, there wouldn’t be any production of any kind.

Energy can be embodied in raw materials and we can measure human work as energy expended and machine work in terms of energy expended too. So therefore all commodities must have a “physically-necessary sun energy” value. All commodities are just embodiments of the “physically-necessary sun energy” required to produce them. We can even – unlike the hopeless Marxists – use a real homogenous unit to calculate energy straight from the natural sciences: the joule.

Certainly, the mythologizing "ruthlessly exploiting the poor, oppressed and innocent sun" might make one admire the odd coincidences required for life on earth. What the labor theory of value is intended to address was the social relations required to explain capitalism. What the labor theory of value states, very simply, is that all value is brought into production through human labor, and that all labor can be measured (and therefore, compensated for) in units of time.