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Inflation and Income Distribution in Capitalist Crisis

herausgegeben von: J. A. Kregel

Verlag: Palgrave Macmillan UK

Enthalten in: Professional Book Archive

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A collection of essays based on the theories of Sidney Weintraub, economic theorist and policy-maker. They all touch on the main theme of crucial importance he accorded to inflation and income distribution in understanding the process of development of capitalism.

Inhaltsverzeichnis

Frontmatter

Editor’s Introduction: In Memory of a Jevonian Seditionist

Abstract

Sidney Weintraub was born in Brooklyn on 28 April 1914 and, like many young Americans, grew up wanting to be a professional baseball player. The aura of Ebbetts Field clearly isolated Flatbush from the Wall Street stock market boom and the subsequent crash which took place across the East River in Manhattan. It was only after he had recognised that a sports career was not to be his that Weintraub concentrated his attention on the economic problems of the day. The result was one of the most original and imaginative approaches to economic theory of the post-war period. In an autobiographical essay written just before his death on 19 June 1983, he described himself as a ’Jevonian seditionist’, recalling a passage from Jevon’s Theory of Political Economy: `. .. authority has ever been the great opponent of truth. A despotic calm is usually the triumph of error. In the republic of sciences sedition and even anarchy are beneficial in the long run to the greatest happiness of the greatest number.’ Weintraub was too original an economist to generate the consensus for his positions required for consideration for a Nobel prize nomination. He was more interested in finding solutions to theoretical questions with practical relevance, solutions which would also have practical applicability. Two interconnected episodes best characterise this aspect of his approach to the subject.

J. A. Kregel

1. The Simple Analytics of Aggregate Demand Price and Aggregate Supply Price Analysis

Abstract

Imagine a circumstance - a fantasy - in which novice economics students were brought up with Keynes’s aggregate demand and supply price framework. They would be taught that entrepreneurial production and, hence , employment decisions are made under the weight of a shroud of impenetrable uncertainty. They need not have been puzzled by the phenomenon of stagflation. They would not have been troubled by evidence of procyclical movements in real wages. They could argue with students exposed to conventional texts that the stickiness of nominal wages is peripheral to the substantive explanation for the occurrence of less than full employment output. Instead, they could contend that a fall in the nominal wage need not raise the level of employment. They would have absorbed, implicitly, a Marshallian approach to microeconomics - through Keynes’s iconoclastic filter - without troubling themselves with the incompatible and inconsistent mixture of topics that infest introductory textbooks

William Darity Jr

2. The Restructuring of the American Economy

Abstract

The de-industrialisation of America, the economy in transition, the loss of American competitiveness, and many other popular phrases have become commonplace. Perhaps the earliest massive statement was provided by Business Week’s cover story on de-industrialisation in 1980. It was sensational, as were so many of the subsequent pronouncements on the subject. We should not be surprised at the changes in industrial composition of the economy during the past several years. There was adequate warning and a thrashing out of the problems.

Lawrence R. Klein

3. A Macroeconomic Perspective on Tax-based Incomes Policies

Abstract

How to contain the money wage level while maintaining full employment and without breeding unacceptable interferences in labour markets, comes close to being the most important policy issue of our day. (Weintraub, 1960)

This quote from the writings of Sidney Weintraub twenty-five years ago demonstrates four important aspects of his significant intellectual contributions to the economics profession and society at large. First, he considered inflation to be a matter of keen social concern, even at the relatively modest rates experienced during the 1950s and well before the dramatic acceleration of inflation that occurred during the 1970s.

Henry C. Wallich, David J. Stockton

4. Money Wages in the Keynesian and Monetarist Explanations of the Transmission Mechanism Linking Money and Prices

Abstract

Two currents run consistently through Sidney Weintraub’s approach to economics: the proposition that the level of money prices is primarily determined by the level of money wage rates and labour productivity, and the corollary proposition that full employment can be facilitated by control of inflation through incomes policies to provide the necessary co-ordination between the rate of change in money wages and productivity. While these points were characteristic of his approach to the subject, they appeared alien to the profession when Weintraub first put them forward, even though they reflected a long tradition in economics that pre-dates Adam Smith and which was revived by Keynes: the central role of labour in the economic process.

J. A. Kregel

5. The Further Theoretical Development of the Weintraub Aggregate Price Equation

Abstract

It was Sidney Weintraub (1959) who first pointed out that the aggregate price level depends on the growth of money wages relative to the growth of labour productivity. The Weintraub aggregate price equation takes the following form:

Alfred S. Eichner

6. Inflation as a Cause of Economic Stagnation: A Dual Model

Abstract

One of the main arguments of this paper is that under existing institutions in the developed capitalist economies, inflation of the type experienced in the late 1960s and early 1970s leads to prolonged periods of high unemployment and low to zero rates of growth of productivity, i.e., economic stagnation. Furthermore, it is argued that without radical changes in certain key institutions, the current economic breakdown will continue indefinitely and will spread worldwide.

John Cornwall

7. Uncertainty and the Residual Hypothesis

Abstract

A well-known criticism raised against the use of probability as a measure of uncertainty can be summarised as follows: it is very doubtful whether a single number (probability) has any meaning when it is attributed to events which are not repeatable or, in general, when the probability assessment is vague for whatever reason. In such cases the reliability of the evidence should also be taken into account in making decisions and assessed as distinct from the determination of probability. Keynes suggested the notion of ’weight of the argument’ as distinct from the notion of probability: ’New evidence will sometimes decrease the probability of an argument, but it will always increase its weight.’¹ According to other proposals the reliability of a probability assessment can be measured by the probability of a statement of probability. This idea appears in the work of Reichenbach² and a similar concept has subseyuently been proposed by J. Marschak³ and criticized by de Finetti.⁴

Sergio Parrinello

8. Attitudes, Rationality and Consumer Demand

Abstract

Ever since the marginalist revolution, the analysis of consumer behaviour has occupied a central place in economic thought. Indeed, its development has moulded much of the apparatus and technique that forms today’s economic tool kit. In the heyday of nineteenth century neo-classicism, preoccupation with this subject substantially absorbed the economic landscape. The notion of maximisation and its counterpart of equality at the margin carried thinking about the consumer, along with the science of economics itself, to new intellectual heights.

Donald W. Katzner

9. The Money Capital Constraint and Decisions in the Firm

Abstract

It is a significant distinguishing feature of the revolution in economic thought that Keynes accomplished — though it has not been maintained in clear perspective in the context of the neo-classical counterrevolution – that economic decisions and performances are generally constrained by the availability of money and its flow through the economy. Against the ’real’ economics of the classical system and its assumedly effective analytical dichotomisation, and against the recrudescence of the primacy of the ’real’ in the neo-classical-monetarist-supply side revival, Keynes reminds us that in a sagging economy

Douglas Vickers

10. The Veil of Barter: The Solution to ’The Task of Obtaining Representations of an Economy in which Money is Essential’

Abstract

In his battle against what he called ’classical Keynesianism’, Sidney Weintraub constantly exhorted his readers to bear in mind that Keynes’s The General Theory offered an analysis of a monetary economy and not ’a barter economy analysis’:

It can be charged that the dominant brand of Keynesianism ... has accomplished a literal return to a barter economy when the veil of money and the complications of a price system have been removed. Even a superficial examination of its form reveals that all its analyses devolve about a real system that is relieved of the basic characteristics of a money economy. (Weintraub, 1961, p. 3— 1st and 2nd italics ours).

Gunnar Heinsohn, Otto Steiger

11. On the Extension of Sraffa’s Theory to a Growing Economy

Abstract

In the Preface to Production of Commodities by Means of Commodities Sraffa declares that the fundamental ideas contained in his book matured towards the end of the 1920s. This statement has aroused much academic curiosity concerning the ties between the theoretical model, developed in Production of Commodities, and the author’s previous contributions to economics — and thus in his intellectual development, which spanned thirty years among the most fascinating in the history of economic thought.

Fausto Vicarelli

Backmatter

Titel: Inflation and Income Distribution in Capitalist Crisis
herausgegeben von: J. A. Kregel
Verlag: Palgrave Macmillan UK
Electronic ISBN: 978-1-349-08833-1
Print ISBN: 978-1-349-08835-5
DOI: https://doi.org/10.1007/978-1-349-08833-1

Springer Professional

Über dieses Buch

Inhaltsverzeichnis

Frontmatter

Editor’s Introduction: In Memory of a Jevonian Seditionist

1. The Simple Analytics of Aggregate Demand Price and Aggregate Supply Price Analysis

2. The Restructuring of the American Economy

3. A Macroeconomic Perspective on Tax-based Incomes Policies

4. Money Wages in the Keynesian and Monetarist Explanations of the Transmission Mechanism Linking Money and Prices

5. The Further Theoretical Development of the Weintraub Aggregate Price Equation

6. Inflation as a Cause of Economic Stagnation: A Dual Model

7. Uncertainty and the Residual Hypothesis

8. Attitudes, Rationality and Consumer Demand

9. The Money Capital Constraint and Decisions in the Firm

10. The Veil of Barter: The Solution to ’The Task of Obtaining Representations of an Economy in which Money is Essential’

11. On the Extension of Sraffa’s Theory to a Growing Economy

Backmatter