## Monday, February 27, 2023

### Prices Of Production For A Model Of Extensive And Intensive Rent

This post continues the treatment of this model.

A number of conditions must be satisfied by quantity flows and prices to allow the economy to undergo smooth reproduction. The net output of each produced commodity meets the requirements for use:

(B - A) q = d

The amount of each quality of land that is farmed cannot exceed the available quantity:

C qt

A vector is greater than or equal to another if each element of the vector is greater or equal to the corresponding element of the other vector. The level of operation of each process is non-negative:

qi, i = 1, 2, ..., n + m - 1

The costs of each process cannot fall below the revenues for that process:

p A (1 + r) + ρ C + w a0p B

In other words, no process returns supernormal profits. The required net output is the numeraire:

p d = 1

The price of each produced commodity is non-negative:

pj ≥ 0; j = 1, 2, ..., n

The rent on each type of land is nonnegative:

ρj ≥ 0; j = 1, 2, ..., k

The specification of prices of production includes a duality condition, the rule of non-operated processes. The following display shows the application of this rule to this model:

[p B - p A (1 + r) - ρ C - w a0] q = 0

According to the fourth display above, the quantity in parenthesis above is non-positive. Thus, if costs exceed revenues in a process, that process is not operated.

Consider a non-trivial solution to the price and quantity systems, with a given rate of profits, that also satisfies the rule of non-operated processes. The first three equations specify the quantity system. The next four equations specify the price system. Such a solution consists of a cost-minimizing technique, the wage, and prices of production. The prices of production include the rents on each type of land. Kurz and Salvadori (1995) prove an existence theorem for a more general model of rent that encompasses this model.

The next step in my development of this model would be to find some interesting numerical examples. I do not expect to be fast about doing this.

## Tuesday, February 21, 2023

### Some Books About History Of Socialism And So On

 Ryan Chapman On (The History Of) Socialism

I found the above video fairly reasonable. Chapman tends to depict history as a debate about ideas, with little about material developments. In other videos, he seems unreliable on the new left, post modernism, and identity politics. My Marx includes a mathematical economist.

This post provides some lists. As usual, I expect my lists are quite idiosyncratic. Some items, with more investigation, I might dislike.

I have recently stumbled upon Midwestern Marx.

I suppose if I want to understand the history of socialism, I should know the meaning of at least some of these terms. I have previously listed terminology for Marxism.

• Anarchism
• Anarcho-Syndicalism
• Autonomism
• Bolsheviks
• Catastrophism: See Maximalism.
• Communards: The members of the Paris commune, the result of a revolution in 1871, defeated by mass murder.
• Communism
• Council Communism
• Critical Theory: See Franfurt School.
• Democratic Centralism
• Democratic Socialism
• Dialectical Materialism: Also known as Historical Materialism.
• Economism: The doctrine, held especially by leaders of labor unions, that political agitation should be confined to shorter hours, better pay, and better working conditions, without challenging the existence of capitalism. See Lenin's What Is To Be Done?
• Entryism
• Eurocomminism
• Fabianism
• Fordism
• Frankfurt School: A school of thought associated with the Frankfurt Institute for Social Research. Theodor Adorno, Walter Benjamin, Fromm, Habermas, Max Horkheimer, Herbert Marcuse, and Friedrich Pollock are some noted members. See Critical Theory.
• Idealism
• Jacobinism
• Keynesianism
• Leninism: See Democratic Centralism, Vanguard Party.
• Maoism
• Mass Worker
• Marxism
• Maximalism
• Mensheviks
• New Left
• Operaismo (Workerism)
• Orthodox Marxism
• Popular Front: Alliance of all non-Nazi parties. Contrast with United Front.
• Revisionism
• Ricardian Socialism
• Sewer Socialism:
• Social Democracy
• Social Worker
• Socialism
• Stalinism
• Structuralism: Louis Althusser, Nicos Poulantzas
• Trotskyism
• United Front: Alliance of leftist parties. Contrast with Popular Front.
• Utopian Socialism
• Vanguard Party
• Voluntarism
• Western Marxism: Karl Korsch, Lukacs, Gramsci, Althusser, for example.

## Saturday, February 18, 2023

### A Fluke Case For Extensive Rent

 Figure 1: Wage Curves and Rent for an Example of Extensive Rent

I more-or-less have a draft research article in five posts: post 1 post 2 post 3 post 4 post 5. I suggest that the current post can replace the fourth post. It is a variant on on this post.

The analysis of the choice of technique in models of extensive rent can be based on the construction of wage curves, even though the outer envelope does not represent the cost-minimizing technique. The orders of fertility and rentability are emphasized here. The order of fertility is defined for specified techniques, in which specified qualities of land are farmed, with one quality only partially farmed. Being in excess supply, the partially farmed land pays no rent. At a given rate of profits, the qualities of land are ordered by wages, with the most fertile land paying the highest wage. The order of rentability specifies the sequence of different qualities of lands from high rent per acre to low rent per acre. Both orders may vary with the wage or the rate of profits. Table 1 presents coefficients of production for an example.

 Input Iron Industry Corn Industry I II III IV Labor 1 a0,2 91/250 67/100 Type 1 Land 0 49/100 0 0 Type 2 Land 0 0 59/100 0 Type 3 Land 0 0 0 9/20 Iron 9/20 a1,2 9/10000 67/1000 Corn 2 6/125 27/100 3/20

The quantity of corn that can be produced is constrained by the available quantities of each type of land. Endowments of land and requirements for use must be among the givens to analyze the choice of technique in this example. Suppose one hundred acres of each type of land are available, and net output is somewhere between 302 and 424 bushels of corn. Then all three types of land must be farmed with the parameters specified in Figure 1. One type will be only partially farmed. The iron-producing process must be operated in each of the three economically viable techniques. Table 2 describes which type of lands are fully cultivated and which type of land is left partially fallow in each of the Alpha, Beta, and Gamma techniques.

 Technique Land Type 1 Type 2 Type 3 Alpha Fully farmed Fully farmed Partially farmed Beta Partially farmed Fully farmed Fully farmed Gamma Fully farmed Partially farmed Fully farmed

For a given technique, the rent on a type of land only partially farmed is zero since it is not scarce. The wage curves in the left pane in Figure 1 are constructed, for each technique, from the price equations provided by the iron-producing process and the corn-producing process for the land that pays no rent. The choice of technique depends on both income distribution and requirements for use (Quadrio-Curzio 1980). Suppose the rate of profits is taken as given. Then the r–order of efficiency or fertility is the order of the wage curves downwards, until requirements for use are satisfied. Since all three types of land must be somewhat cultivated in the example, the wage frontier is the inner envelope of the wage curves. For the illustrated parameters, Alpha is cost-minimizing, and the order of fertility for any rate of profits below the maximum rate of profits is Type 1, Type 2, and Type 3 lands.

 Figure 2: The Parameter Space for an Example of Extensive Rent

One can calculate the cost of capital goods at the given rate of profits and the cost of labor inputs for corn-producing processes on each of Type 1 and Type 2 lands. Since coefficients of production are specified per bushel corn produced, the revenues from each of these processes, at a unit level, are the same as the process operated on Type 3 land. Rent is the difference between revenues and non-land costs on Type 1 and Type 2 lands. Rent per acre is plotted in the right pane for Figure 1. The order of rentability is the order of lands by rent per acre. The order of rentability is the same as the order of fertility for any rate of profits below the maximum rate of profits for the given parameters.

The fluke switch point in Figure 1 does not lie on the (inner) wage frontier. The maximum rate of profits for the wage curve for Alpha is the maximum rate of profits for this example. The switch point for the wage curves for the Beta and Gamma techniques is at this maximum rate of profits. Likewise, the rent curves in the right pane in Figure 1 intersect at this maximum rate of profits. As seen in Figure 2, this is another edge case, a fluke that arises in models of extensive rent.

Qualitative properties of the analysis of the choice of technique do not vary within each numbered region. In region 1 in Figure 2, the intersections between the wage and rent curves occur at a rate of profits greater the maximum rate of profits for Alpha. The order of fertility matches the order of rentability. The switch point between the wage curves is at a rate of profits less than the maximum rate of profits in region 2. The order of fertility varies with the rate of profits and deviates from the order of rentability at high rates of profits. Figure 3 illustrates region 3. The intersection between rent curves now also occurs at a rate of profits less than the maximum. In region 4, the intersection between rent curves occurs at a rate of profits less that the rate at which wage curves intersect, in contrast to region 3. In both regions, the orders of fertility and rentability do not match at rates of profits between these intersections. In region 5, the intersection between wage curves occurs at a rate of profits greater than the maximum rate. The orders of fertility and rentability continue to match at rate of profits less than the rate of profits at which rent curves intersect.

 Figure 3: Wage Curves and Rent for Region 3

This example illustrates how both the variation of the order of fertility and of the order of rentability with the rate of profits can emerge from perturbations of coefficients of production. It is not necessary for more fertile lands to pay a higher rent. Whether or not these orders match can vary with distribution. Fluke cases specific to models of extensive rent partition the part of the parameter space examined here.

## Friday, February 17, 2023

### Noam Chomsky Praising America

 Noam Chomsky Having A Discussion With An Idiot

This is more about current events than usual with me.

Patrick Bet David talks to quite a range of people. But he is incapable of listening, partly because he 'thinks' there are two sides, Democrats and Republicans, in the United States today. I stumbled on the above after listening to a discussion with David Pakman, in which Pakman responds at one point with something like, "Some of those words mirror some of what I said." When Pakman explains that some of those who support Trump were previously non-voters, disengaged and disaffected, who do not care about policy, Bet David responds by asking if some of those who voted for Obama voted for him solely because he is black. Since Pakman is on the other side, he must have been insulting Bet David and needs to be countered with a tu quoque fallacy. Bet David asks Richard Wolff, "Why do you hate rich people?" He cannot fathom Roland Martin who tells him that activists came up with the idea of "defund the police" and, generally, such activists dislike both the Republician and Democratic parties.

For another podcaster, consider Lex Friedman. He conducts himself with more seriousness, sometimes a bit too ponderous for my taste. He has something to talk to Noam Chomsky about other than politics.

One view I disagree with is actually existing capitalism is not real capitalism. Crony capitalism and monopoly capitalism do not count. I find that propertarians will sometimes argue this. Chomsky says something like the same in talking to Bet David. I agree with Chomsky that Adam Smith was not advocating for something like the United States economy today.

Anyway, I like to point out Chomsky has written the following:

"We live entangled in webs of endless deceit, often self-deceit, but with a little honest effort, it is possible to extricate ourselves from them. If we do, we will see a world that is rather different from the one presented to us by a remarkably effective ideological system, a world that is much uglier, often horrifying. We will also learn that our own actions, or passive acquiescence, contribute quite substantially to misery and oppression, and perhaps eventual global destruction.

But there is a brighter side. We are fortunate to live in a society that is not only rich and powerful - and hence, as any student of history would expect, dangerous and destructive - but also relatively free and open, perhaps more so than any other, though this may change if the reactionary jingoists who have misappropriated the term 'conservative' succeed in their current project of diminishing civil liberties, strengthening the power of the state, and protecting it from public scrutiny. For those who are relatively wealthy and privileged, a very large sector of a society as rich as ours, there are ample opportunities to discover the truth about who we are and what we do in the world. Furthermore, by international standards the state is limited at home in its capacity to coerce. Hence those who enjoy a measure of wealth and privilege are free to act in many ways, without undue fear of state terror, to bring about crucial changes in policy and even more fundamental institutional changes. We are fortunate, perhaps uniquely so, in the range of opportunities we enjoy for free inquiry and effective action. The significance of these facts can hardly be exaggerated." -- Noam Chomsky, Turning The Tide: US Intervention in Central America and the Struggle for Peace 1985.

## Tuesday, February 14, 2023

### Technology For A Model Of Extensive And Intensive Rent

 Parameter or Variable Description n The number of produced commodities, with n > 1. k The number of types of land, with k > 1. m The number of processes available for producing corn on land, with m > k. a0 A row vector of labor coefficients containing n + m - 1 elements. The element a0, j; j = 1, 2, ..., n + m - 1; is the person-years of labor needed to run the th process at a unit level. A A n x (n + m - 1) matrix. The element ai,j; i = 1, 2, ..., n; j = 1, 2, ..., n + m - 1; is the quantity of the ith commodity produced by the jth process when run at a unit level. B A n x (n + m - 1) sparse matrix. The element bi,j; i = 1, 2, ..., n; j = 1, 2, ..., n + m - 1; is the quantity of the ith produced commodity needed to run the jth process at a unit level. C A k x (n + m - 1) sparse matrix. The element ci,j; i = 1, 2, ..., k; j = 1, 2, ..., n + m - 1; is the acres of the ith type of land needed to run the jth process at a unit level. t A column vector, with k elements, of the available lands. The element ti; i = 1, 2, ..., k; is the number of acres of the ith type of land available. d A column vector, with n elements, specifying the requirements for use. The element di; i = 1, 2, ..., n; is the required net output of the th produced commodity. q A column vector, with n + m - 1 elements, of the level of operation of each process. p A row vector, with n elements, of prices. ρ A row vector, with k elements, of rents per acre. r The rate of profits. If given, the wage is to be found by solving the model. w The wage. If given, the rate of profits is to be found by solving the model.

This post continues the exposition of this model. Sraffa posed the problem of demonstrating some claims:

"the order of fertility ... is not defined independently of the rents; that order, as well as the magnitude of the rents themselves, may vary with the variation of r and w." (Sraffa 1960)

I have yet to consider the possibility of more than one agricultural product; I don't know that I solved the last problems in the Kurz and Salvadori (1995) chapter on rent. But I am starting on the first sentence in the following:

"89. More complex cases can generally be reduced to combinations of the two [extensive and intensive rent] that have been considered. The main type of complication arises from the multiplicity of agricultural products." (Sraffa, 1960)

Technology, endowments of land t, requirements for use d, and either the wage or the rate of profits are given parameters for this model. The level of operation q of each process, prices p, rents ρ, and the remaining distributive variable are found as the solution to the model. Each process takes a year to complete, totally uses up its inputs of produced commodities, and exhibits constant returns to scale (CRS).

Technology is characterized by the arrays a0, A, B, and C. For this to be a model of extensive and intensive rent, these arrays must have more structure than specified in Table 3. Assume all labor coefficients a0 and available endowments of types of land t are positive. Each industrial process produces exactly one commodity, and all agricultural processes produce the same commodity, called 'corn;. That is, the first (n - 1) rows and (n - 1) columns of the output matrix B comprise an identity matrix. The last elements of those rows are zero. The first (n - 1) elements of the last row, that is, the nth row, are zero and the remaining elements are unity. The first (n - 1) columns of the matrix C are zeros. Each of the last m columns has exactly one strictly positive entry; all other elements are zero. Each row of C has at least one positive element.

Let a(i)0; i = 1, 2, ..., m; be a row vector of labor coefficients with n elements. The first n - 1 coefficients are the first n - 1 coefficients in a0. The last coefficient is a0, n + i - 1. Let A(i) be the square input matrix with the corresponding columns from A, and let B(i) be the square output matrix with the corresponding columns from B. Notice that B is the n x n identity matrix. In other words, a vector of labor coefficients a(i)0 and a Leontief matrix A(i) correspond to each process for producing corn.

Corn is assumed to be a basic commodity for each Leontief matrix A(i). Suppose by an appropriate ordering of commodities and industries, the Leontief matrix can be decomposed into the form where the first n - l rows and columns is the submatrix F(i)(n - l) x (n - l). The submatrix G(i)l x (n - l) is the last l rows for the first n - l colomns. The zero matrix 0(i)(n - l) x l is the last l columns for the first n - l rows. The submatrix Â(i)l x l is the last l rows and l columns. The subscripts indicate the size of the submatrices. The matrix Â(i)l x l is assumed not to be further decomposable, and every column of G(i)l x (n - l) is assumed to contain a non-zero element. Then the last l commodities are basic commodities. This ordering of commodities allows corn to be the last commodity in the order. A basic commodity enters either directly or indirectly into the production of all commodities.

The Leontief matrix Â(i) is not decomposable, all elements are non-negative, and at least some elements are strictly positive. Then, by a theorem of Perron and Frobenius, the largest eigenvalue in modulus is real and non-negative and a corresponding eigenvector has all positive elements. This largest eigenvalue, λPF(Â(i)), is the Perron-Frobenius root of the Leontief matrix. Assume that the maximum eigenvalue for the submatrix of basic commodities exceeds the maximum eigenvalue for the submatrix for non-basic commodities, so to speak:

λPF(F(i)) < λPF(Â(i))

Then the Perron-Frobenius root of the submatrix of basic commodities is the Perron-Frobenius root of the Leontief matrix A(i). Furthermore, assume that this Perron-Frobenius root does not exceed unity:

0 < λPF(Â(i)) < 1

These assumptions guarantee that a positive level of operation of the industries producing basic commodities exists such that a surplus product remains after replacing the used-up means of production. A Leontief matrix with these properties is a Sraffa matrix (Kurz and Salvadori, 1995).

The maximum rate of profits is related to the Perron-Frobenius root of the Leontief matrix:

Ri = [1 - λPF(Â(i))]/λPF(Â(i)) = [1/λPF(Â(i))] - 1; i = 1, 2, ..., m

The assumption that a surplus product can be produced with each system including a corn-producing producing process implies that the maximum rate of profits is positive. Lands that can never enter into a system of production with a surplus product are not considered in this model.

This model of rent remains open. Net output and wages or the rate of profits are determined outside the model. Following Pasinetti (2007), one can say these variables are determined at the institutional level, not at the structural level characterized by this model. Neither the labor force nor the existing endowments of capital goods are constraints in this model. Employment and the amount of produced means of production are found by solving the model. Whether full employment is achieved or capacity is fully used is a realization problem, to be analyzed after solving the model.

## Saturday, February 11, 2023

### Victoria Chick (1936 - 2023), James Crotty (1940 - 2023), Makoto Itoh (1936 - 2023)

I cannot write as much about these economists as they deserve.

I know even less about Antonia Campus, a Sraffian economist who also recently passed. I have already written about Luigi Pasinetti, but I will here note INET's obituary.

## Thursday, February 09, 2023

### Howard Zinn On 1619

 Neighbors of Zinn Make A Movie

This was a year before my mother's mother's mother's ancesters came to this continent. It is on my mother's mother's father's side I am descended from a murderer's brother. My father's ancesters were probably on this continent in 1919, but in Canada.

"A black American writer, J. Saunders Redding, describes the arrival of a ship in North America in the year 1619:

Sails furled, flag drooping at her rounded stern, she rode the tide in from the sea. She was a strange ship, indeed, by all accounts, a frightening ship, a ship of mystery. Whether she was trader, privateer, or man-of-war no one knows. Through her bulwarks black-mouthed cannon yawned. The flag she flew was Dutch; her crew a motley. Her port of call, an English settlement, Jamestown, in the colony of Virginia. She came, she traded, and shortly afterwards was gone. Probably no ship in modern history has carried a more portentous freight. Her cargo? Twenty slaves.

There is not a country in world history in which racism has been more important, for so long a time, as the United States. And the problem of 'the color line,' as W. E. B. Du Bois put it, is still with us. So it is more than a purely historical question to ask: How does it start? - and an even more urgent question: How might it end? Or, to put it differently: Is it possible for whites and blacks to live together without hatred?

If history can help answer these questions, then the beginnings of slavery in North America - a continent where we can trace the coming of the first whites and the first blacks - might supply at least a few clues." -- Howard Zinn, A People's History of the United States (1980).

## Monday, February 06, 2023

### Extensive And Intensive Rent

This post begins the presentation of an example in which extensive and intensive rent can both arise. I do not consider external intensive rent or joint production in general. Kurz and Salvadori (1995), in section 2.2 of Chapter 10, have a more general model that includes external extensive rent and joint production. It does not allow for more than one agricultural commodity, although they treat that in problems, with examples from the literature.

Perhaps developing this example will help me find a insightful way of presenting some of the fluke cases I have found in the theory of rent.

Table 1 presents coefficients of production for the simplest example I can think of in which more than one commodity is produced, intensive and extensive rent are possible, and general joint production does not arise. Here, multiple types of land (that is, two types) exist. Only one agricultural commodity, corn, can be produced on the processes in which land is used. For one type of land, more than one process can be operated on land. Only one process is known for producing each (that is, one) industrial commodity.

 Input Industry Iron Corn I II III IV Labor a0,1 a0,2 a0,3 a0,4 Type I Land 0 c1,2 0 0 Type II Land 0 0 c2,3 c2,4 Iron a1,1 a1,2 a1,3 a1,4 Corn a2,1 a2,2 a2,3 a2,4

Table 2 lists the available techniques of production available. Not all may be feasible. Which are feasible depends on requirements for use (that is, required net output) and how much of each type of land is available. Rent is zero for the Alpha, Beta, and Gamma techniques, since neither type of land is fully used. That is, land is not scarce. Techniques Delta, Epsilon, Zeta, and Eta are examples of extensive rent since only one process is operated on each type of land. The Theta technique resembles an example of intensive rent. Finally, if the Iota technique is adopted, one will observe both extensive and intensive rent.

 Technique Processes Type 1 Land Type 2 Land Alpha I, II Partially farmed Fallow Beta I, III Fallow Partially farmed Gamma I, IV Fallow Partially farmed Delta I, II, III Fully farmed Partially farmed Epsilon I, II, III Partially farmed Fully farmed Zeta I, II, IV Fully farmed Partially farmed Eta I, II, IV Partially farmed Fully farmed Theta I, III, IV Fallow Fully farmed Iota I, II, III, IV Partially farmed Fully farmed

Here are some questions I expect to answer:

• How should the input-output matrices a0, A, B, and C be characterized in general for a case of extensive and intensive rent without full joint production?
• How are prices of production defined for this example, following Kurz and Salvadori's direct method?
• Can one extend the concepts of the order of fertility and the order of efficiency from extensive rent proper to this combination of extensive and intensive rent?
• Can one find numerical examples of 'perverse' behavior with these orders, as in models of extensive rent? Maybe I would want to postulate the availability of a third type of land.
• Can one find numerical examples of non-existence and nonuniqueness of cost-minimizing techniques, as in models of intensive rent?
• Can one find numerical examples of fluke cases?

## Saturday, February 04, 2023

### An Outline Of The History Of Socialist And Communist Parties In The United States

 A Timeline For The United States

This post provides an outline of the development of socialist and communist parties in the United States. The focus is on national political parties, not labor unions, not intentional communities, and not activist groups.

The Socialist Labor Party (SLP), the Socialist Party (SP), the Communist Party of the United States of America (CPUSA), and the Socialist Workers’ Party (SWP) are the most long-lived parties considered here. Democratic Socialists of America (DSA) is currently of some prominence, along with the Green Party (which I am not considering a socialist party). Many of these parties had associated newspapers and youth groups, with factional disputes among them. For example, one does not see in this timeline the division between the League for Industrial Democracy (LID) and Students for a Democratic Society (SDS) after the signing of the 1962 Port Huron statement, since neither the LID nor the SDS were political parties.

 Party Time Comments Social-Democratic Party of North America (SDPNA) 1874-1876 Marxist. Merged into SLP, along with the Workingmen's Party of Illinois, the Social Political Workingmen's Society of Cincinnati, and former members of the first international. Socialist Labor Party (SLP) 1876 - 2008 First major socialist party in the USA. Originally named Workingmen's Party of the United States (WPUS). Changed name in 1877 to Socialistic Labor Party and later to SLP. Daniel De Leon editor of The Weekly People from 1890. Social Democratic Federation (SDF) 1889 - 1897 Faction from SLP, merged with SDA. The faction fight involved the Henry George campaign for mayor of New York City. Social Democracy of America (SDA) 1897 - 1898 Eugene Debs involved in founding. Included a faction from SLP. The part of SDA that did not go into SDPA founded the Cooperative Brotherhood, a colony or intentional community on Puget Sound. Social Democratic Party of America (SDPA) 1898 - 1901 Formed out of parts of SDA Socialist Party of America (SPA, SP, SPUSA) 1901 - 1972 Merger of SDPA and De Leon opponents in SLP. Norman Thomas presidential candidate in 1930s, David McReynolds the candidate in 1980 and 2000. Changed name to Social Democrats, USA in 1970s, with the Socialist Party USA as the continuing political party. Communist Party of the United States of America (CPUSA) 1919 - present Founders included Charles Ruthenberg, when expelled from the SPA. Also, Louis Fraina, as seen in the movie Reds. Member of the Communist (Third) International. Earl Browder and Gus Hall were some presidential candidates. Angela Davis was twice the candidate for vice president. Communist Labor Party of America (CLPA) 1919 - 1921 Founders included John Reed, as seen in the movie Reds, when expelled from the SPA. Merged with faction of CP to form United Communist Party of America. United Communist Party of America (UCPA) 1921 Short-lived merger of the CLPA and a faction of the CPUSA. Merged into the CPUSA. Communist League of America (CLA) 1928 - 1934 Founders included James Cannon and Max Shachtman. Expelled from CP for supporting Leon Trotsky. Affiliated with the International Left Opposition (ILO). American Workers Party (AWP) 1933 - 1934 Organized by James Burnham, Sidney Hook, and A. J. Muste. Workers Party of the United States (WPUS) 1934 – 1936 Merger of AWP and CLA. Members joined the SPA on its dissolution. Socialist Workers Party (SWP) 1937 - present Split from SP. Member of the Fourth International, although James Burnham and Max Shachtman split with Trotsky. Workers Party (WP) 1940 - 1957 Founded by members of the SWP who disagreed with Trotsky's view that the USSR was a 'degenerated workers' state'. Renamed in 1949 to be the Independent Socialist League (ISL) Democratic Socialist Organizing Committee (DSOC) 1973 - 1982 Founded by Michael Harrington leading faction out of SPA. Left wing of the possible. New American Movement (NAM) 1971 – 1982 Formed from breakup of Students for a Democratic Society (SDS). Democratic Socialists of America (DSA) 1982 - present Formed by merger of DSOC and NAM. Michael Harrington important here. Affiliated with the Socialist International for much of its life.

We see some commonalities that I expect to arise across many countries. Some sort of consolidation or beginning occurs around the time of the first international. In the United States, there is a tension around parties organized with recent immigrants, various regions, and native-born workers. With a small enough movement, frictions between personalities may be of some moment. Apparently some found De Leon irritating. A split between socialists and communists occurs about the time of World War I and the Russian Revolution. The exile of Trotsky is echoed in a further split among communists. More members join during the Great Depression. The New Left results in more dissension, with organizing among leftists not necessarily focusing on class or being seen in national political parties. On the other hand, some parties and factions keep on thinking about combining forces. Communists, at least, must react to changes in the Soviet Union, including its collapse in 1989. Some parties sometimes also have to consider how to combine legal and illegal activities. And the question of how to relate to electoral politics, including to the leftmost bourgeois party, is frequently posed. This need not be posed at the national level; the United States created a tradition of sewer socialism, with socialists elected as mayor or onto city boards, during the early twentieth century.

## Wednesday, February 01, 2023

### Luigi L. Pasinetti (1930 - 2023)

I have been inspired by Pasinetti's clear expositions. A lot of my work is an attempt to build on his theory of structural economic dynamics. Some highlights of Pasinetti's career as an economist:

• A derivation, in Pasinetti (1962), of the Cambridge equation, r = g/sc. Along a steady-state growth path, the rate of profit must be equal to the quotient of the rate of growth and the savings rate out of profits. This is an extension of Keynes' theory that investment creates the needed savings to the long run, and it applies whether or not workers save.
• First numerical example of the reswitching of techniques in a model of an economy as a whole, with multiple industries producing inputs for one another. Pasinetti (1966) is an update of a paper presented previously in Rome and a refutation of Levhari's supposed non-switching theorem. Pasinetti (1969), in which he points out Solow relies on an 'unobtrusive postulate' that a lower rate of profits is always associated with the adoption of a more capital-intensive technique, is another classic contribution to the Cambridge Capital Controversy.
• Pasinetti (1973) develops tools for understanding vertical and hyper-vertical integration in input-output models.
• Pasinetti (1977), although not considering joint production, is a typically clear exposition of post-Sraffian price theory. I also often turn to Pasinetti (1980).
• Pasinetti (1981) and Pasinetti (1993) set out the theory of structural economic dynamics. In the second, for clarity, he considers production in which labor is the only input.

In industrial economies, production and consumption take place in a man-built world, with technology embodied in the plant and equipment available at the start of a production period. Pasinetti argues that one should analyze such an economy on two levels, a 'natural' level and an institutional level. The term 'natural' suggests a connection to Adam Smith's analysis. He attempts to provide a theory organized around nine principles.

The 'natural' level considers prices of production. Pasinetti allows the coefficients of production to decline with human learning. The composition of demand evolves as described by Engel curves. He notes that, at this level, a macroeconomic principle arises that must be met if effective demand is to be such that prices of production are to be realized. So, like Richard Goodwin, he draws a connection between Leontief's input-output analysis and Keynes' theory. Much of Keynes' theory, such as liquidity preference, I think is about what Pasinetti calls the institutional level. Pasinetti's work has inspired many, for example, Ian Wright.

References
• Baranzini, Mauro L. and G. C. Harcourt (eds.) 1993. The Dynamics of the Wealth of Nations: Growth, Distribution and Structural Change: Essays in Honour of Luigi L. Pasinetti. Macmillan.
• Baranzini, Mauro L. and Amalia Mirante. 2018. Luigi L. Pasinetti: An Intellectual BiographyPalgrave Macmillan.
• Bellino, Enrico and Sebastiano Nerozzi (eds.) 2021. Pasinetti and the Classical Keynesians: Nine Methodological Issues. Cambridge University Press.
• Pasinetti, L. L. 1960. A mathematical formulation of the Ricardian system. Review of Economic Studies 27 (2): 78 - 98.
• Pasinetti, L. L. 1962. Rate of profit and income distribution in relation to the rate of economic growth. Review of Economic Studies 29 (4): 267 - 279.
• Pasinetti, L. L. 1966. Changes in the rate of profit and switches of technique. Quarterly Journal of Economics 80 (4): 503 - 517.
• Pasinetti, L. L. 1969. Switches of technique and the 'rate of return' in capital theory. Economic Journal, 79(315): 508 - 531.
• Pasinetti, L. L. 1973. The notion of vertical integration in economic analysis. Metroeconomica. 25 (1): 1 - 29.
• Pasinetti, L. L. 1974. Growth and Income Distribution: Essays in Economic Theory. Cambridge: Cambridge University Press.
• Pasinetti, L. L. 1977. Lectures on the Theory of Production. Columbia University Press.
• Pasinetti, L. L. (ed.) 1980. Essays on the Theory of Joint Production. Columbia University Press.
• Pasinetti, L. L. 1981. Structural Change and Economic Growth: A Theoretical Essay on the Dynamics of the Wealth of Nations. Cambridge: Cambridge University Press.
• Pasinetti, L. L. 1993. Structural Economic Dynamics: A Theory of the Economic Consequences of Human Learning. Cambridge: Cambridge University Press.
• Pasinetti, L. L. 2007. Keynes and the Cambridge Keynesians: A 'Revolution in Economics' to be Accomplished. Cambridge: Cambridge University Press.