June 22, 2011

Exploitation and its unintended outcomes: an axiomatic view of Marx's surplus value {09}

Working paper at SSRN

Abstract  The present paper scrutinizes the logical foundation of Marx's dialectic analysis of the evolving money economy. The frame of reference is thereby given with the set of structural axioms. It turns out, first, that the commonplace notion of exploitation has to be replaced by crossover exploitation among capitalists and workers; second, that the concept of surplus-value cannot explain the existence and magnitude of overall profits; finally, that the real shares of output are determined in the spheres of income and expenditure and not, as classical, Marxian and neoclassical economists unanimously maintain, in the sphere of production.

June 14, 2011

Properties of an Economy Without Human Beings {08}

Standard economics starts with behavioral axioms and arrives at conclusions about the equilibrium properties of the economy as a whole at point t. The present paper employs objective structural axioms and random changes in order to determine the conditions for market-clearing and budget-balancing in the pure consumption economy until the limit t → ∞. From the conditions of stochastic supersymmetry, six simple behavioral rules are derived that guarantee the desired outcome. These rules contrast with actual behavior and this explains why the plans and expectations of economic man are many times frustrated.

June 6, 2011

The coherency of money, profit, price, and distribution {07}

Working paper at SSRN

Abstract  When anything goes and nothing fits together this can be euphemized as pluralism. Lacking a common point of reference, discussions between various schools of economic thought proceed in the ‘hyperspace of assumptions’ (McCloskey). The incoherency of perspectives is due to self-chosen foundational assumptions. The present paper submits three structural axioms as formal core that is neutral with regard to assumptions about behavior. The objective is to clarify the interrelation of four elementary concepts and to eliminate some logical inconsistencies. Neither neoclassicals nor Keynesians came to grips with the relationship between profit and the distribution of the real product.

June 2, 2011

Beginning, crises, and end of the money economy {06}

Working paper at SSRN

Abstract  A crisis is but a crisis when the long-run outlook is definitively positive. Then a lower turning point must exist. This implicates a vision or, in the ideal case, a formalized theory of the money economy's possible end states. This theory has to provide an endogenous explanation of end states and crises. The equilibrium approach excludes endogenous causes in principle. Thus disturbances can only be explained by exogenous random shocks. The structural axiomatic approach, which is applied in the following, consistently defines the potential systemic crisis point and the conditions of an economic happy end.