Notes on Ricardo’s theory of value and taxation

The purpose of this paper is twofold: on the one hand is to discuss Ricardo’s version of the labour theory of value; and on the other hand, is to analyse some crucial aspects of Ricardo’s theory of taxation as an extension and further elaboration of his theory of value. This discussion is illustrated with the use of a formal model based on a generalisation of Ricardo’s numerical examples. The claim that the paper raises is that Ricardo’s analysis of taxation is a kind of a comparative statics exercise, where the real wage, the state of technology and the level of output are taken as givens. Furthermore, it is shown that Ricardo’s claim that money’s role in the presence of taxation of profits is not neutral becomes questionable, when various feedback effects are accounted for.Classical economists, Taxation, Theory of Value, Distribution

The ‘new golden age of accumulation’, the new depression and the Greek economy

Στόχος του άρθρου είναι να ερευνήσει διεξοδι-κά τις βαθύτερες αιτίες της τρέχουσας κρίσης καιτης λεπτομερούς εκδήλωσής της στην περίπτωσητης ελληνικής οικονομίας. Το σημαντικότερο επι-χείρημα του άρθρου είναι ότι η πρωταρχική αι-τία της κρίσης εντοπίζεται στην πτωτική τάση τουποσοστού κέρδους που από ένα σημείο και μετάοδηγεί σε στασιμότητα και εν τέλει πτώση στημάζα των πραγματικών καθαρών κερδών που μετη σειρά τους αποθαρρύνουν τις επενδύσεις καιοδηγούν σε αυξανόμενη ανεργία. Στην περίπτωσητης ελληνικής οικονομίας, αυτή η κρίση της κερ-δοφορίας έχει επιδεινωθεί από τη συστολή τωνσημαντικών παραγωγικών δραστηριοτήτων της,ιδίως τη βιομηχανία και τη γεωργία. Η συστολήαυτών των δραστηριοτήτων όχι μόνο επιδείνωσετην κρίση αλλά επιπλέον προετοίμασε το έδαφοςγια την ανάπτυξη των διαφορετικών μορφών έκ-φρασής της, δηλαδή στη διόγκωση του χρέουςκαι σε πρωτοφανή υψηλά ποσοστά ανεργίας πουφέρνουν ολόκληρη την κοινωνία σε ένα αδιέξοδο.The purpose of this paper is to delve into thedeeper causes of the current crisis and itsdetailed manifestation in the case of the Greekeconomy. The major argument of the paper isthat the root cause of the crisis is fundamentallyidentified in the declining profitability whichpast a point leads to a stagnant mass of realnet profits thereby discouraging investmentspending and leading to rising unemployment.In the case of the Greek economy, this crisisof profitability has been aggravated by thecontraction of its major productive activities,that is, manufacturing and agriculture.The contraction of these activities not onlyworsened the crisis but furthermore paved theway for the development of different formsof its expression; that is, mounting debt andunprecedented high rates of unemploymentbringing the whole society into a stalemat

Economic theory in historical perspective

On the methodological plain this paper outlines the conditions that contribute to the development of economic theories and it continues with an examination of the concrete circumstances that gave rise to modern neoclassical macroeconomic theories. The paper further claims that the current impasse in macroeconomics is indicative of the need for new directions in economic theory which becomes imperative in the long economic downturn that started in 2007 and concludes by suggesting the need for a synthesis between the classical analysis and the theory of effective demand

From Economic Prosperity to the Depression of 1930s

This chapter starts with a discussion of the economic situation in the USA and UK in the 1920s and 1930s and argues that the fundamentals of these two economies in the 1920s were already in a bad shape. In fact, we show that in the US economy the fall in the rate of profit and the stagnation of the mass of real profits preceded the collapse of the stock market in the 1929 and the depression of 1930s. The discussion continues with the economic and political situation in the case of the Greek economy and the way in which she was affected by the depression. From the study of the Greek economy in the 1930s, we derive some useful conclusions that may shed new light to the current depression and debt problems of the Greek economy.Depression of 1930s; Gold exchange standard; Greek economy; debt default

The rate of profit in the Greek economy 1988-1997. an input-output analysis

The evolution of the rate of profit reflects both changes in income distribution and technical conditions of production. The purpose of this paper is to present estimates of the rate of profit for the Greek economy using input-output data spanning the period 1988-1997 and, at the same time, to decompose the evolution of the rate of profit to its constituent components. These estimations are carried out in terms of (i) market prices; (ii) labour values; and (iii) prices of production.Greek Economy, Rate of Profit, Profit-Wage Ratio, Productivity of Labour and Capital, Input-Output Analysis

Falling Rate of Profit and Overaccumulation in Marx and Keynes

The question of the long-run prospects of profitability and its association with the stage of capital accumulation have occupied central importance in the history of economic thought. This paper focuses on Marx and Keynes and argues that Marx’s analysis, despite its incomplete nature, is logically consistent in both explaining the falling tendency of the rate of profit as well as the precise mechanism that leads the economy to its crisis stage. Keynes’s analysis, although sketchy, has more in common with Marx and Smith than with Ricardo and neoclassical economics. Furthermore, Keynes’s views on effective demand and the way in which it affects profitability and capital accumulation might be gainfully used for the formulation of a more advanced theory to explain and at the same time direct, within strictly defined limits, the dynamics of capitalist economies

Falling Rate of Profit and Overaccumulation in Marx and Keynes

The question of the long-run prospects of profitability and its association with the stage of capital accumulation have occupied central importance in the history of economic thought. This paper focuses on Marx and Keynes and argues that Marx’s analysis, despite its incomplete nature, is logically consistent in both explaining the falling tendency of the rate of profit as well as the precise mechanism that leads the economy to its crisis stage. Keynes’s analysis, although sketchy, has more in common with Marx and Smith than with Ricardo and neoclassical economics. Furthermore, Keynes’s views on effective demand and the way in which it affects profitability and capital accumulation might be gainfully used for the formulation of a more advanced theory to explain and at the same time direct, within strictly defined limits, the dynamics of capitalist economies

Από την Οικονομική Άνθηση στην Κρίση του 1930

This chapter starts with a discussion of the economic situation in the USA and UK in the 1920s and 1930s and argues that the fundamentals of these two economies in the 1920s were already in a bad shape. In fact, we show that in the US economy the fall in the rate of profit and the stagnation of the mass of real profits preceded the collapse of the stock market in the 1929 and the depression of 1930s. The discussion continues with the economic and political situation in the case of the Greek economy and the way in which she was affected by the depression. From the study of the Greek economy in the 1930s, we derive some useful conclusions that may shed new light to the current depression and debt problems of the Greek economy

Keynes on the Marginal Efficiency of Capital and the Great Depression

This paper argues that Keynes’s analysis of the marginal efficiency of capital is consistent with the principle of effective demand and is, in this sense, characteristically different from the related classical or neoclassical conceptualisations. Furthermore, the notion of the marginal efficiency of capital is used not only as an explanation of the short term fluctuations in the level of economic activity but also as an interpretation of more serious long term fluctuations such as that of the great depression. Finally, some of Keynes’s economic policy proposals are critically evaluated

Public Debt and J.S. Mill’s Conjecture: A Note

Classical economists mainly Smith, Ricardo and J.S. Mill abhorred public debts because of their interference with capital accumulation. J.S. Mill in particular envisaged that a rising public debt leads to higher interest rates and falling real wages, a combination which may be consistent with a mildly increasing trend in the profit rate