The Information Economy and the Labor Theory of Value

This article discusses aspects of the labor theory of value in the context of the information industries. First, taking the Temporal Single-System Interpretation (TSSI) of Marx’s labor theory of value as methodology, the paper calculates economic demographics at the level of socially necessary labor time and prices of an example case. Second, the paper questions the assumption that the labor theory of value cannot be applied to the information industries. This paper tests this hypothesis with an analysis of the development of labor productivity in six countries. The paper concludes that the labor theory of value is an important tool for understanding the information economy and the peculiarities of the information commodity

Social Learning and Innovation Cycles

We study social learning and innovation in an overlapping generations model, emphasizing the trade-off between marginal innovation (combining existing technologies) and radical innovation (breaking new ground). We characterize both short-term and long-term dynamics of innovation, and the intergenerational accumulation of knowledge. Innovation cycles emerge endogenously, but the number of cycles is finite almost surely, and radical innovation terminates in finite time. We identify a negative relationship between past successes and the magnitude of radical innovation, combining insights from the multi-armed bandit literature with a spatial representation of innovation. Past successes reduce the incremental value of experimentation, and result in less ambitious innovation. In our framework, patents promote radical innovation through two channels: by increasing the expected benefit of radical innovation and by increasing the cost of marginal innovation. Our analysis suggests that sustaining radical innovation in the long-run requires external intervention

De jure determinants of new firm formation: how the pillars of constitutions influence entrepreneurship

This paper provides empirical evidence supporting the view that constitutions are the primary and fundamental institutional determinant of entrepreneurship. It shows that some of the provisions contained in national constitutions are positively and significantly associated with a standard measure of entrepreneurial dynamics, namely the rate of new business density. Using for 115 countries a novel dataset containing the characteristics of the constitutions enacted in the world, applying an IV-GMM treatment to deal with the endogeneity of constitutional rules, and controlling for de facto variables, the paper finds that provisions about the right to conduct/establish a business, the right to strike, consumer protection, anti-corruption, and compulsory education promote higher rates of new firm formation. Contrasting results are instead obtained for provisions concerning protection of intellectual property rights

Are the affluent prepared to pay for the planet? Explaining willingness to pay for public and quasi-private environmental goods in Switzerland

A large number of ‘environmental justice’ studies show that wealthier people are less affected by environmental burdens and also consume more resources than poorer people. Given this double inequity, we ask, to what extent are affluent people prepared to pay to protect the environment? The analyses are couched within the compensation/affluence hypothesis, which states that wealthier persons are able to spend more for environmental protection than their poorer counterparts. Further, we take into account various competing economic, psychological and sociological determinants of individuals’ willingness to pay (WTP) for both public environmental goods (e.g., general environmental protection) and quasi-private environmental goods (e.g., CO2-neutral cars). Such a comprehensive approach contrasts with most other studies in this field that focus on a limited number of determinants and goods. Multivariate analyses are based on a general population survey in Switzerland (N = 3,369). Although income has a positive and significant effect on WTP supporting the compensation hypothesis, determinants such as generalized interpersonal trust that is assumed to be positively associated with civic engagement and environmental concern prove to be equally important. Moreover, we demonstrate for the first time that time preferences can considerably influence survey-based WTP for environmental goods; since investments in the environment typically pay off in the distant future, persons with a high subjective discount rate are less likely to commit

Drivers of Health Care Expenditure: Does Baumol's Cost Disease Loom Large?

According to Baumol (1993) health care epitomises Baumol's cost disease. Sectors that suffer from Baumol's cost disease are characterised by slow productivity growth due to a high labour coefficient. As a result, unit costs of these sectors rise inexorably if the respective wages increase with productivity growth of the progressive industries such as manufacturing. Thus, according to Baumol (1993) the secular rise in health-care expenditure has been unavoidable. This present paper demonstrates that health care is contracted by Baumol's cost disease, but only to a minor extent. Consequently, policy-makers have more leeway to curbever-increasing health-care expenditure than is suggested by Baumol (1993) and other authors. In addition, we test the implications of Baumol's cost disease for health care by avoiding the well-known flaws in constructing medical price indices. Therefore, the adjusted Baumol variable derived in this paper is also extremely appropriate to test the validity of Baumol's cost diseases of other service industries such as education or the live performing arts. Additionally, our analysis suggests that health care is rather a necessity than a luxury at the national level, which conflicts with macroeconomic evidence provided in the relevant literature

Standardising Clinical Caremaps: Model, Method and Graphical Notation for Caremap Specification

Standardising care can improve patient safety and outcomes, and reduce the cost of providing healthcare services. Caremaps were developed to standardise care, but contemporary caremaps are not standardised. Confusion persists in terms of terminology, structure, content and development process. Unlike existing methods in the literature, the approach, model and notation presented in this chapter pays special attention to incorporation of clinical decision points as first-class citizens within the modelling process. The resulting caremap with decision points is evaluated through creation of a caremap for women with gestational diabetes mellitus. The proposed method was found to be an effective way for comprehensively specifying all features of caremaps in a standardised way that can be easily understood by clinicians. This chapter contributes a new standardised method, model and notation for caremap content, structure and development

Deindustrialization and the Polarization of Household Incomes: The Example of Urban Agglomerations in Germany

The tertiarization, or perhaps more accurately, the deindustrialization of the economy has left deep scars on cities. It is evident not only in the industrial wastelands and empty factory buildings scattered throughout the urban landscape, but also in the income and social structures of cities. Industrialization, collective wage setting and the welfare state led to a stark reduction in income differences over the course of the twentieth century. Conversely, deindustrialization and the shift to tertiary sectors could result in increasing wage differentiation. Moreover, numerous studies on global cities, the dual city, and divided cities have also identified income polarization as a central phenomenon in the development of major cities. Using data from the German Socio-Economic Panel (SOEP), we find an increasing polarization of household income structures since the mid-1990. In agglomerations, this income polarization is even more pronounced than in the more rural regions. The income polarization in Germany is likely to have multiple causes, some of which are directly linked to policies such as the deregulation of the labor market. But extensive deindustrialization is probably also one of the drivers, that has led directly to the weakening of middle income groups