Comment on David Ruccio on ‘Changing the story to hide the problem’
Blog-Reference
David Ruccio writes: “Now that the wage share has clearly fallen, and shows no signs of returning to its previous levels, economists have changed their story. In their view, market concentration leads to a lower, not higher, wage share. Why has there been such an about-face in economists’ story about the causes of the declining wage share?” (See intro)
The simple answer is that distribution theory is false because profit theory is false. The fact of the matter is that economists have NO idea about what profit is. This holds for the major approaches Walrasianism, Keynesianism, Marxianism, Austrianism, MMT.
The Profit Theory is false since Adam Smith.#1 Economists have NO idea about the pivotal magnitude of their subject matter. David Ruccio is right in criticizing that there is no valid distribution theory. But he himself is entirely lost in the woods. He maintains: “The actual rule, as it turns out, is that the wage share falls, as the rate of exploitation increases.” This heterodox rubbish is the complement to orthodox rubbish.#2
As Mirowski put it: “... one of the most convoluted and muddled areas in economic theory: the theory of profit.” No surprise then, that the distribution theory is a complete scientific failure.#3 Time to end economists’ storytelling and to throw ALL these incompetent orthodox and heterodox blatherers out of science.
Egmont Kakarot-Handtke
#1 The Profit Theory is False Since Adam Smith
#2 Rethinking the Profit Law
#3 Where economics went wrong
