tag:blogger.com,1999:blog-26706564.comments2024-03-12T13:51:41.094-04:00Thoughts On EconomicsRobert Vienneauhttp://www.blogger.com/profile/14748118392842775431noreply@blogger.comBlogger3274125tag:blogger.com,1999:blog-26706564.post-1511227751545408242024-03-12T13:51:41.094-04:002024-03-12T13:51:41.094-04:00«it is not necessary to have a system of large sca...«<i>it is not necessary to have a system of large scale industrial production (labour specialization and big machinery) even if powered by expensive low density fuels</i>»<br /><br />I meant to write that as "it is not inconceivable to have ...".Blissexnoreply@blogger.comtag:blogger.com,1999:blog-26706564.post-24267142053828808622024-03-11T16:45:21.035-04:002024-03-11T16:45:21.035-04:00“praises the tremendous increase of productivity b...“praises the tremendous increase of productivity brought about by the bourgeoisie”<br /><br />«<i>My understanding is that he praises the productivity of *capitalism*, not of *capitalists*. That is a pretty important difference.</i>»<br /><br />My understanding is that by doing so he committed a grave mistake, because almost all the productivity came not from the use of the industrial system but the use of very cheap very high energy density fuel. In my readings of Marx he seems to have understand that the fuel (coal in his time) was important, but not quite how determinant it is; like the more recent Ayn-Rand style propagandists who preach that productivity comes solely from "technical progress" gifted to us by geniuses of creativity and enterprise ("wealth creators") instead of by the enormous consumer surplus embedded in mineral wood (coal) and mineral oil.<br /><br />There seems to be considerable confusion between the productivity of cheap dense fuel and that of the industrial system because to reap the benefits of cheap dense fuels a system of large scale industrial production seems necessary.<br /><br />But the vice-versa is not right: it is not necessary to have a system of large scale industrial production (labour specialization and big machinery) even if powered by expensive low density fuels like animal or human labour, wood or hay, wind or running water, but it would be nowhere as productive as one based on mineral wood and oil; and arguably it would be futile, because huge transport costs without coal and oil would means that "large scale" industrial could not happen, because that depends on having a cheaply reachable large scale market too (see the enormous impact of cheap oil powered ships and containers on the scale of industrial production).Blissexnoreply@blogger.comtag:blogger.com,1999:blog-26706564.post-19158094838842883512024-03-11T16:31:40.313-04:002024-03-11T16:31:40.313-04:00«argues markets are computing automata, and comput...«<i>argues markets are computing automata, and computers are often taken as models of the mind these days</i>»<br /><br />Every age has its overarching metaphor or simile for "systems": once it was biology,as in trees, humans, farms, then it became machinery, such as orreries, then it became computers. For example marginalism was clearly inspired by "orreries", the mechanistic classical physics of Laplace etc., variational methods in particular.<br /><br />The political economy is like the elephant before the three sages with the blindfold: it is multidimensional complex system that can be modeled by analogy with biology, machinery, computers; as a system of complementary markets, as a giant integrated factory, as a system of interlocking balance sheets, as a huge farm, as a collection of social institutions, as a set of anthepological relationships, etc. Blissexnoreply@blogger.comtag:blogger.com,1999:blog-26706564.post-74405576254597991452024-03-11T16:20:05.952-04:002024-03-11T16:20:05.952-04:00«praises the tremendous increase of productivity b...«<i>praises the tremendous increase of productivity brought about by the bourgeoisie</i>»<br /><br />My understanding is that he praises the productivity of *capitalism*, not of *capitalists*. That is a pretty important difference. Indeed his prediction is that capitalism will be replaced by *more* capitalism, in the form of socialism (capitalism with society ownership of capital via the state instead of private ownership), and that will be replaced with more capitalism still, in the form of communism (capitalism with communal ownership of capital, when the state "withers away").<br /><br />Reminder: my understanding is that by "capital" Marx does not mean all means of production, what other political economists call "capital", but only those means of production involved in industrial production, where workers do not own them. and by "capitalism" he means the social relationship between workers without means of production and the means of production and their owners, whatever the form of ownership of that capital.<br /><br />Put another way "capitalism" means the industrial system of production. Nowadays that seems redundant, as by and large it is the only system of production of importance, but even in the time of Marx many if not most households especially in rural areas made their own bread, sausages, cloth and dresses, and most remaining production was done in the same way by artisans for sale to third parties.<br /><br />At the same time as an historical materialist he acknowledges that in the historical context capitalism had to begin as private capitalism (in its successive firms as personal, private company, public company, managerial forms), but the form of ownership of capitalism is not what gives it its main characteristics, it is the use of capital not personally owned by the workers.<br /><br />«<i>He downplays the accompanying environmental degradation.</i>»<br /><br />I am not so sure, IIRC it is described as another form of exploitation. <br /><br />BTW as to "exploitation" and other ills of "private capitalism" my understanding is that he actually blames *competitive markets*: it is competition in markets that forces capitalists to behave badly, trying to externalize losses and squeeze profits out of everything. The less competitive capitalists are bought out or bankrupted by the more vicious ones. This if applicable also means that a change of the form of ownership of capital has the same issue, for example to cooperative capitalism.<br /><br />I think that the marxian conceit or hope is that once socialism is achieved, the state, as the steward of the interests of the whole of society, can achieve the same optimum-seeking effects as competitive markets without the downsides. Actually existing state capitalism has largely failed to do so, as perverse incentives still apply.<br /><br />«<i>Imperialism extends capitalism into non-European colonies. Marx deplores the violence, but thinks rationalization of such societies is progress.</i>»<br /><br />As was the introduction of the industrial system in the home countries, despite the exploitation and pollution of the "Manchester system" well described by Engels. But many imperialist home countries suppressed or repressed the creation of industrial production in the colonies, for example in New England before the revolution it was illegal to manufacture *nails*, which had to be imported from England (because the nail industry magnates of England had a lot of influence at Westminster, but not the wannabe ones of New England).<br /><br />However in order to facilitate the export of cheap raw materials from the colonies, and the import of expensive industrial products to the colonies, some colonial powers nonetheless created significant amounts of social and infrastructure capital that came quite useful later. For example I guess it is not entirely unrelated that most "asian tigers" were oppressed (as most of Japan itself) by japanese colonialism for a while at least.Blissexnoreply@blogger.comtag:blogger.com,1999:blog-26706564.post-60011490624546258622024-02-26T07:52:59.000-05:002024-02-26T07:52:59.000-05:00That is me. I guess a default reddit account is gi...That is me. I guess a default reddit account is given some pseudonym. I am not sure why I have not changed it.Robert Vienneauhttps://www.blogger.com/profile/00872510108133281526noreply@blogger.comtag:blogger.com,1999:blog-26706564.post-24736102583185191302024-02-25T20:07:17.441-05:002024-02-25T20:07:17.441-05:00Very oddly, someone has copy and pasted this post ...Very oddly, someone has copy and pasted this post onto reddit and not given any props to you: https://www.reddit.com/r/CapitalismVSocialism/comments/1ayuv58/utility_maximization_a_tautology/<br /><br />Someone on the r/AskEconomics subreddit has also apparently "refuted it": https://www.reddit.com/r/badeconomics/comments/1ayzdue/comment/krzbt4v/?context=3&share_id=cYGtfZ5VMWBJX2V3wYCNa&utm_content=1&utm_medium=ios_app&utm_name=ioscss&utm_source=share&utm_term=1KeynesianSpacemanhttps://www.blogger.com/profile/17560339094582766778noreply@blogger.comtag:blogger.com,1999:blog-26706564.post-56881468362827952372024-02-24T08:00:51.775-05:002024-02-24T08:00:51.775-05:00I think it could be interesting to study that syst...I think it could be interesting to study that system. For example how prices behave with different numeraires, how capital-labor and capital-output ratios behave and how differential rates of profits influences the formers.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-26706564.post-50834926282149698302024-02-24T07:52:49.627-05:002024-02-24T07:52:49.627-05:00Thanks. I have not worked through that example.Thanks. I have not worked through that example.Robert Vienneauhttps://www.blogger.com/profile/00872510108133281526noreply@blogger.comtag:blogger.com,1999:blog-26706564.post-9955675928318188002024-02-19T11:02:52.586-05:002024-02-19T11:02:52.586-05:00I think there is a third. The so called Average In...I think there is a third. The so called Average Industry System where all industries are proportional and the matrix is of rank 1.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-26706564.post-76671867712709774582024-02-06T08:07:09.894-05:002024-02-06T08:07:09.894-05:00I guess the October revolution was immediately ins...I guess the October revolution was immediately inspiring for many at the time. It certainly can see it as a step up for a backwards capitalism.Robert Vienneauhttps://www.blogger.com/profile/00872510108133281526noreply@blogger.comtag:blogger.com,1999:blog-26706564.post-72227617200458239642024-02-05T10:39:31.812-05:002024-02-05T10:39:31.812-05:00Personally, even if the most pessimistic accounts ...Personally, even if the most pessimistic accounts of USSR-as-busted-state-capitalist are correct, with the benefit of hindsight we can still identify that flawed system as an objective step up from anything else on the world stage at that point.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-26706564.post-11544093440644595252024-02-02T09:27:53.152-05:002024-02-02T09:27:53.152-05:00"Many to the left of liberals, that is, socia..."Many to the left of liberals, that is, socialists, communists, and anarchists of various stripes, were opposed to the Soviet Union since its founding."<br /><br />Well, not quite the case. Many of these supported the November 1917 revolution on the assumption that it meant "all power to the soviets", in the sense of workers' councils running things (plus workers' control and peasants seizing and working the land). When it became obvious that it was, in reality, "all power to the Bolsheviks" and they were imposing state-capitalism rather than socialism, then they started to oppose it. <br /><br />This was the case with the Russian anarchists, the Mensheviks were somewhat different -- they opposed the October Revolution but eventually came to take the position of "official opposition" and recognised the regime, urging the Bolsheviks to apply the constitution and opposed the party dictatorship in favour of soviet democracy.<br /><br />Foreign anarchists, like Emma Goldman, supported the regime until they saw it in practice (she was deported there in 1920) and only then opposed the Bolshevik dictatorship (and it was that since the Soviet Congress of mid-1918 and acknowledged as such by the Bolsheviks from 1919 onwards). Those not able to visit came to oppose it based on reliable testimony given by those, like Emma Goldman, who did.<br /><br />Those Marxists who became known as council communists got there a little later, prompted by Comintern interference with German affairs and confirmed by reliable reports.<br /><br />Needless to say, none of these groups supported the Whites -- the Mensheviks expelling anyone who joined attempts to overthrown the regime by force, for example.<br /><br />Goldman's "My Disillusionment in Russia" (not her title) is a good account of the Bolshevik regime and its failings. Russell's is worth reading (he considered himself a Guild Socialist at the time).<br /><br />Iain<br /><a href="https://www.anarchistfaq.org" rel="nofollow">An Anarchist FAQ</a>Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-26706564.post-414096798735389512024-01-23T14:56:06.286-05:002024-01-23T14:56:06.286-05:00To the commenter named Blissex,
I'm an editor...To the commenter named Blissex,<br /><br />I'm an editor at Strange Matters, a socialist journal friendly to the heterodox schools of economics and engaged in research on the origins of money where money is defined precisely as accounting. Your comments were supremely interesting, and I am very keen to discuss the possibility of publishing your writing on accounting (we pay quite competitive rates for a magazine of our size). Please be in touch at jmc[at]strangematters[dot]coop.John Michael Colonhttp://strangematters.coopnoreply@blogger.comtag:blogger.com,1999:blog-26706564.post-46180258001720519322023-12-13T08:18:24.137-05:002023-12-13T08:18:24.137-05:00Some Marxist textbooks I have read, for example, R...Some Marxist textbooks I have read, for example, Rosa Luxemburg's, draw quite a bit on anthropology. A focus on the generation, distribution, and use of surplus production is not only for economics.<br /><br />I have read some saying that the English could advocate free trade because they were ahead in industrial development. It is not an abstract theoretical argument.Robert Vienneauhttps://www.blogger.com/profile/00872510108133281526noreply@blogger.comtag:blogger.com,1999:blog-26706564.post-36051782564266187132023-12-10T08:43:39.522-05:002023-12-10T08:43:39.522-05:00«“Of these institutions the gold standard proved c...«“Of these institutions the gold standard proved crucial; its fall was the proximate cause of the catastrophe. By the time it failed, most of the other institutions had been sacrificed in a vain effort to save it. But the fount and matrix of the system was the self-regulating market. It was this innovation which gave rise to a specific civilization.”»<br /><br />In retrospect I disagree with Polanyi not because he was wrong but because the gold standard and the "free markets" were just means to an end, and the end was the supremacy of the english class of owners of industry, which itself depended on the two really big deals, the industrial mode of production (secondarily) and cheap coal fuel (primarily).<br /><br />The best pithy summary of the history, economics and politics (except for reproductive issues) of the past 200 years (it is a tall claim, but please consider it seriously) I have found is this short quote (use your imagination to extend it to post-Victorian periods and other countries):<br /><br />Tony Wrigley, "Energy and the english industrial revolution" (2010)<br />https://www.cambridge.org/core/books/energy-and-the-english-industrial-revolution/A18E48989B4A915D0E77A29D57D85763<br />«Approximately two-thirds of the European production of cotton textiles took place in the UK. The comparable percentages for iron production and coal production were 64 and 76 per cent. [...] The total of installed steam engine horsepower was far larger than on the continent. In 1840, 75 per cent of the combined total capacity of stationary steam engines in Britain, France, Prussia and Belgium was in Britain alone (the other three countries accounted for the great bulk of installed capacity on the continent.»<br /><br />The story is well summarised in this article: https://royalsocietypublishing.org/doi/10.1098/rsta.2011.0568<br />There is also this 1865 paper by Jevons: https://oll.libertyfund.org/titles/jevons-the-coal-question<br /><br />More details here:<br /><br />Andres Malm "Fossil capital" (2016)<br />https://www.versobooks.com/en-gb/products/135-fossil-capital<br />«One method used by Wrigley and his followers to illustrate the logic is to convert coal into acres of land required to generate the same amount of energy. In 1750, all coal produced in England would have equalled 4.3 million acres of woodland, or 13 percent of the national territory. In 1800, substituting wood for all coal would have demanded 11.2 million acres, or 35 percent of the British land surface; by 1850, the figures had risen to 48.1 million acres and 150 percent, respectively. As early as in 1750, then, a hypothetical total conversion from coal to wood in the British economy would have ‘represented a significant proportion of the land surface for which there were many other competing uses’; in 1800, it would have been ‘quite impractical’; in 1850 – the threshold of 100 percent crossed – ‘self-evidently an impossibility’. In other words, ‘in the absence of coal as an energy source, Ricardian pressures would have become acute’: forests denuded, soils exhausted, growth grinding to a halt. In a similar computation inspired by Wrigley, Rolf Pieter Sieferle concludes that, already by the 1820s, coal had freed an area equivalent to the total surface of Britain, while Paolo Malanima, likewise standing on the shoulders of Wrigley, estimates that in the absence of fossil fuels, Europe would have needed a land area more than 2.7 times its entire continental surface in 1900, rising to more than 20 times in 2000.»Blissexnoreply@blogger.comtag:blogger.com,1999:blog-26706564.post-10010368382489161482023-12-10T08:19:44.164-05:002023-12-10T08:19:44.164-05:00«Labor And Land Are No Commodities»
Whether they ...«<i>Labor And Land Are No Commodities</i>»<br /><br />Whether they are is ideology. For some labor is a commodity but land is the sacred inheritance of the ancestors, and every other possible combination happens too.<br /><br />There is an old saying in anglo-american law:<br /><br />https://quoteinvestigator.com/2010/07/04/legal-adage/<br />“If you’re weak on the facts and strong on the law, pound the law. If you’re weak on the law and strong on the facts, pound the facts. If you’re weak on both, pound the table.”<br /><br />So for those who strong on either the markets, the land, labor, capital. It is pretty natural.<br /><br />«“Our thesis is that the idea of a self-adjusting market implied a stark Utopia. Such an institution could not exist for any length of time without annihilating the human and natural substance of society”»<br /><br />Polanyi made a great contribution, but I think there is a wider point than his "markets vs. institutions" arguments: what is missing from most of Economics, political economy, political "science", and even a lot of sociology is *anthropology*, in particular the influence of kinship and culture. In particular the overwhelming importance of reproduction in human behaviour and culture as many people will do amazing things for the sake of their children and grandchildren, something that the often aspergery types that get into academic careers, and in particular in Economics, often cannot relate to.<br /><br />As to “could not exist for any length of time without annihilating the human and natural substance of society” I even have a hypothesis that women switching from having sons to owning assets as pensions is what drives civilization cycles.<br /><br />Ben Franklin wrote appositely “When old men plant trees under whose shade they know they will never sit, society flourishes” and that is a good insight, but he did not realize that what matters more is not what men do, but what women choose.Blissexnoreply@blogger.comtag:blogger.com,1999:blog-26706564.post-19066397252370176242023-12-09T07:54:54.373-05:002023-12-09T07:54:54.373-05:00I guess I am using "communist" narrowly,...I guess I am using "communist" narrowly, to mean the parties governing no-longer-actually-existing socialism. I do not know why I do not manage to read more anarchists.Robert Vienneauhttps://www.blogger.com/profile/00872510108133281526noreply@blogger.comtag:blogger.com,1999:blog-26706564.post-52604617733217832742023-12-07T03:38:34.187-05:002023-12-07T03:38:34.187-05:00One thing I would note, that "anti-Communist&...One thing I would note, that "anti-Communist" can include socialists -- Orwell being the classic example. <br /><br />I've seen Emma Goldman listed as an "anti-Communist" in spite of her being an anarchist-communist -- she was anti-Communist because she recognised it was not communism, but state-capitalism. Kropotkin, likewise, could be listed as an "anti-Communist" in spite (or because!) of him being a libertarian communist.<br /><br />The following are of note:<br /><br /><i>My Disillusionment in Russia</i> — Emma Goldman<br /><i>My Further Disillusionment in Russia</i> — Emma Goldman<br /><i>There Is No Communism in Russia</i> — Emma Goldman<br /><br />Plus other writings including in this book: <a href="https://anarchism.pageabode.com/from-russia-with-critique/" rel="nofollow">From Russia with Critique</a><br /><br /><i>Letter to the workers of the west</i> -- Peter Kropotkin (in <i>Direct Struggle Against Capital</i>)<br /><br />There are more critiques of the Soviet Union from a socialist perspective (for example, by council communists like Paul Mattick) -- whether "anti-Communist" is the best term for these is another matter!Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-26706564.post-4328673197917712412023-12-06T07:34:09.363-05:002023-12-06T07:34:09.363-05:00I am getting so I pass up opportunities to put boo...I am getting so I pass up opportunities to put books on to-read list. Angus Deaton's work sounds interesting, but I probably will not read it.<br /><br />I see that retirement homes have lots of the characteristics of intentional communities. College collective living arrangements too.Robert Vienneauhttps://www.blogger.com/profile/00872510108133281526noreply@blogger.comtag:blogger.com,1999:blog-26706564.post-86289266022520312142023-12-03T12:44:38.944-05:002023-12-03T12:44:38.944-05:00«reaganist/neoliberal governments have delivered m...«<i>reaganist/neoliberal governments have delivered more inequality and won many middle class votes from that.</i>»<br /><br />The main vehicle by far for increasing inequality to win middle class votes has been in the USA, the UK, Australia, etc. to double housing costs every 7-10 years in middle class areas.<br /><br />Real estate inflation has had much bigger economic and political effects than deflation of labour costs. Some tradmarxists keep talking about the exploitation of workers by employers, but that has long been I think rather smaller than rentier exploitation by property owners, who exploit workers both directly via residential property costs and indirectly via commercial property costs; I guess that if one sums them then many workers pay well more than 50% of their after tax income to property owners, at least in some areas.Blissexnoreply@blogger.comtag:blogger.com,1999:blog-26706564.post-9416341724654210762023-12-03T10:02:43.587-05:002023-12-03T10:02:43.587-05:00«Angus Deaton [...] An Immigrant Economist»
His p...«<i>Angus Deaton [...] An Immigrant Economist</i>»<br /><br />His personal story is interesting: he immigrated from England, where the most important social concept is the distinction between "masters" and "servants", and from a "servant" family (that perhaps later became "trustie").<br /><br />He is unlike many people in England born in "servant" families who rather than being opposed to the "masters-servants" divide only want to become "masters" themselves, or at least "trusties", to enjoy the benefits of being in a position to take advantage of the "servants" too.<br /><br />«<i>Explores the Land of Inequality</i>»<br /><br />Brad DeLong (despite being a bit too "aligned" as an Economist sometimes makes useful points) remarked once that reaganism/neoliberalism were the result of popular discontent with too much equality, and indeed reaganist/neoliberal governments have delivered more inequality and won many middle class votes from that.<br /><br />«<i>apparently says, "A reader might be forgiven for thinking we are scoundrels concerned only with our own financial gain."</i>»<br /><br />A similar remark was made by de Tocqueville in "Democracy in America" in 1834...<br /><br />More recently famous "historian" Newt Gingrich realistically observed:<br /><br />https://aspace-uwg.galileo.usg.edu/repositories/2/archival_objects/124552<br />«For most Americans the speed limit is a benchmark of opportunity. This is not a light insight. If you have a society where almost every middle class person routinely fudges the law, that’s telling us something. We have laws that matter – murder, rape, and we have laws that don’t matter. The first thing that every good American says each morning is “What’s the angle?” “How can I get around it?” “What does my lawyer think?” “There must be a loophole!” [...] America is the most incentive-driven society on the planet.»<br /><br />«<i>Intentional communities are another example of a non-capitalist institution.</i>»<br /><br />I know what you mean, but states or townships or even retirement homes are also "intentional communities".<br /><br />Also that is arguably a common misuse of the word "capitalism" which is for political economists a mode of production, where workers do not own individually the means of production, but you know that :-). In most cases where people write "capitalism" they mean "private capitalism", where the means of production are privately (whether by individuals, groups, financial institutions, ...) owned. This is important because "socialism" and "communist" are also "capitalism", that is "social [state] capitalism", and "community capitalism", where the means of production are owned by "society" through the state, and become communally owned later when the state "withers away".<br /><br />That matters because socialists and communists don't want to eliminate capitalism, as the capitalist mode of production has produced great results and there is not yet clear which better mode of production could replace it, but to change the ownership of the means of production. Similar to the difference between "business" and "business owner": socialists and communists are great supporters of businesses, not so much of business owners taking a cut.<br /><br />Outside political economy "capitalism" is usually used to mean a *political* system in which the class of private owners of means of production have paramount political power.Blissexnoreply@blogger.comtag:blogger.com,1999:blog-26706564.post-81787629628538413002023-11-22T16:55:19.501-05:002023-11-22T16:55:19.501-05:00I have a draft book which I have been drawing on f...I have a draft book which I have been drawing on for blog posts and article submissions. As I do this I am increasingly dissatisfied. So I am not anywhere near submission to a publisher.<br /><br />Thorpe could also read Steedman's Marx after Sraffa. Yes, I agree he does not understand.Robert Vienneauhttps://www.blogger.com/profile/00872510108133281526noreply@blogger.comtag:blogger.com,1999:blog-26706564.post-28441097140795747412023-11-22T14:14:21.611-05:002023-11-22T14:14:21.611-05:00It was on Discord, I'm not sure how familiar y...It was on Discord, I'm not sure how familiar you are with the usage of it, but there is a (relatively popular) discord server dedicated to the study of Austrian Economics, they even have their own <a href="https://www.austrianlibrary.com//" rel="nofollow">website</a>. <br /><br />There is that Reddit post, there is also <a href="https://www.reddit.com/r/badeconomics/comments/qo7eo8/theoretical_precision_and_the_cambridge_capital////" rel="nofollow">this</a> from Thorpe, which seems to me to not be particularly compelling, a bundle of misinterpretations and misunderstandings that most likely could be soundly resolved by a reading of Kurz & Salvadori (1995). Interestingly, in the one you linked the user 'Eleutheria' is mentioned who was a former Austrian who "converted" to Sraffian economics, I believe there's a post somewhere in one of your Elsewheres where you cover a blog post he wrote criticising Murphy's CCC-commentary. <br /><br />On a more general topic, <a href="https://www.rethinkeconomics.org/2020/08/13/sraffian-economics/////" rel="nofollow">this</a> seems to mention that you were in the midst of writing a book in 2020. I'm curious, is it on the way soon, or is it stuck in development hell like, for instance, the English translation of Michael Heinrich's book the Science of Value? And if it is soon on the way, will it be largely inspired by the contents of your blog posts, or will it be entirely new? KeynesianSpacemanhttps://www.blogger.com/profile/17560339094582766778noreply@blogger.comtag:blogger.com,1999:blog-26706564.post-17798907956594591772023-11-22T06:58:44.211-05:002023-11-22T06:58:44.211-05:00Where does Thorpe express this muddle? I found a c...Where does Thorpe express this muddle? I found a <a href="https://www.reddit.com/r/NewAustrianSociety/comments/ntpx0p/valuefree_reswitching_capital_theory_and_more/" rel="nofollow">conversation</a> on Reddit from two years ago.<br /><br />I see that Thorpe accepts that commodities can be simultaneously in several orders at once and that the existence of price Wicksell effects is valid. Mayhaps he could explain this to Mateusz Machaj, since this is enough to make some of his <a href="https://mises.org/library/interest-rate-and-length-production-attempt-reformulation" rel="nofollow">work</a> pointless.<br /><br />I think it of interest to show that some of the processes operating today are going to produce commodities for immediate consumption, for use as capital goods in producing consumption goods in the next periods, for use as capital goods in producing capital goods for use in producing consumption goods two periods hence, and so on.<br /><br />Maybe Thorpe has forgotten some of what he reads. Which axis is which is not consistent in presentations of Hayekian triangles. No point of substance is involved.<br /><br />Anyways, Thorpe's comments on the limitations of the simple counterexamples is confused in logic. You do not require generality in counter-examples.<br /><br />Furthermore, reswitching, capital-reversing, reverse labor substitution, recurrence of processes, and so on are consistent with the existence of many sectors, alternative processes in all of them, the existence of <a href="http://www.centrosraffa.org/cswp_details.aspx?id=53" rel="nofollow">fixed capital</a>, and so on.<br /><br />I do not know what I promised to "sort out" years ago. I think my work with fluke cases demonstrates that, say, capital-reversing is not a fluke case. Bertram Schefold's work on random matrices implies that the choice of technique is hardly likely to work out as exploded theorists imagined. Schefold's work was inspired by empirical work.<br /><br />The more confusion I see from Austrian school economists, the more impressed I am that Fratini convinced some Austrian school economists to <a href="https://link.springer.com/article/10.1007/s11138-019-0432-0" rel="nofollow">accept</a> one of his publications.Robert Vienneauhttps://www.blogger.com/profile/00872510108133281526noreply@blogger.comtag:blogger.com,1999:blog-26706564.post-53230799262093358692023-11-21T16:40:58.667-05:002023-11-21T16:40:58.667-05:00Hi Robert, I was wondering what you thought of the...Hi Robert, I was wondering what you thought of the Austrian economist Rob Thorpe's response to your paper "Some Capital-Theoretic Fallacies of Austrian Economics," I saw that he said the following:<br /><br />"The idea that a good can have more than one "order" is correct. The concept is not exact in the sense that each good has only one order. General purpose goods like steel and oil occupy many orders. I don't think this is a big problem, maybe Dabchick or someone here disagrees. Notice that Vienneau's example isn't really useful here because it's a conceptual example with only two very simple processes in it. The real issue of "orders" is whether the concept works in the real world.<br /><br />I more of less agree with the points Vienneau quotes from Lewin. I don't think that any of these are really fatal to ABCT. Again, I'd be interested in what Dab and thunderbbx think here.<br /><br />Vienneau's numerical example in table 1 and table 2 is very limited. There is no potential to change production technique. There are no fixed capital goods, only circulating capital goods. Although a good is called "steel" it is consumed each year. This is why interest rates in his model just change the distribution of incomes between wages and interest. It is because of this extreme simplicity that all of the prices in the model are found once the interest rate is decided.<br /><br />In table 1 & table 2 all of Vienneau's talk about what entrepreneurs think is irrelevant. There is one process in each industry. Entrepreneurs either take it or leave it, it's a binary choice. If they take it they expand until all labour is employed. If they leave it nothing is produced and there is no economy. Notice if the steel industry refuses to make steel then nothing can happen, and if the corn industry refuses to make corn nothing can happen. So, to get any economy at all we must assume that entrepreneurs in both industries decide to operate, that is all.<br />-<br />Vienneau discusses how varying the interest rate produces differences in the value of inputs. Notice that Vienneau presents his Hayekian triangle rotated by 90 degrees, that with the x-axis and y-axis swapped compared to the normal convention. Vienneau claims that the shape of the Hayekian triangle changes even if the constituent capital goods used does not. The prices change, with the interest rate, so the shape changes. This is not wrong and certainly happens in practice. It's relevant in recent property bubbles especially. Due to zoning and planning limits it's not possible to build more housing in certain areas. So, as the interest falls and financing becomes cheaper houses in such areas become more expensive but it is rarely possible to build more of them. This price-Wicksell effect is real, and Hayek actually makes this point himself in Prices and Production. However, in the majority of cases it is actually possible to build more capital when capital prices are high! The real world offers many different processes to select from, unlike Vienneau's simple models.<br /><br />Later in section 3.4 Vienneau introduces choice-of-technique. Here we have reswitching. We have all of the usual problems of the pro-reswitching side. They constantly present extremely simple models. They provide no evidence that reswitching actually occurs in practice and have no theory to explain why we should expect it to occur. To get reswitching in any sort of economy which has real complexity you need fixed capital costs to be paid after goods have been sold, which makes no sense. Vienneau said he was going to sort all this stuff out years ago, but he never has. I won't go into Vienneau's note 35 here since I don't have the time."<br /><br />Would be curious on your thoughtsKeynesianSpacemanhttps://www.blogger.com/profile/17560339094582766778noreply@blogger.com