March 25, 2015
Comment on Nick Rowe on ‘Wren-Lewis Takes a Stab at It’
You write: “Firms are worker-owned cooperatives, so we don't need to distinguish wages from profits.”
That is, of course, a fatal error/mistake. You have to distinguish between wage income, distributed profit and profit. These are quite different things. It is irrelevant whether the firm is a cooperative or a joint-stock company. Your error/mistake, though, is pardonable because the profit theory is false since Adam Smith and the models of Stephen, Simon, Nick E. and all the rest are not one iota better in this respect. Time to realize that RBC, NK and NC models are logically defective.