First Postulate Pilloried: Policy as Analytical Tool for Sketching a Heterodox Citadel

100 %
0 %
Information about First Postulate Pilloried: Policy as Analytical Tool for Sketching a...
Economy & Finance

Published on October 15, 2014

Author: pkconference

Source: slideshare.net

Description

Post Keynesian Economic Policy session at 12th International Conference

1. 12th International Post Keynesian Conference Where Do We Go From Here? September 25, 2014 First Postulate Pilloried: Policy as Analytical Tool for Sketching a Heterodox Citadel John Casey Nicolarsen 12th International Post Keynesian Conference ///// First Postulate Pilloried

2. Introduction • Outline of Presentation – Advancement of “classically”-inspired policy proposal path for wage system (“Labor Conversion”) – Investigate: anticipated tendencies resulting from policy path propositions – Further examination: current political, institutional and historical dynamics – Theoretical Appeal: policy evaluated from traditions of – Keynesian / Post Keynesian – Sraffian – Marxian 12th International Post Keynesian Conference ///// First Postulate Pilloried 2

3. Introduction • Outline of Presentation – Analytical Pillorying: Marginal Productivity Theory with Respect to Income (First Postulate: “the wage is equal to the marginal product of labour”) – Implications Resulting from Policy: Epochal Adjustment? – Where is the Citadel? It’s Located Beyond the Capitalist Epoch – Restatement, Main Points, Conclusion 12th International Post Keynesian Conference ///// First Postulate Pilloried 3

4. Policy Proposal Path for Wage System • “Classically” Re-Imagined: Minimum Wage Policy – “Labor Conversion” [not “Tax Inversion”] • Redefined: Full-Time Employment • Restructured: Competition • Required: Political Organization [setting aside for the moment] 12th International Post Keynesian Conference ///// First Postulate Pilloried 4

5. Policy Proposal Path for Wage System • Minimum Wage Policy: “Labor Conversion” (not ‘Tax Inversion’) – Federal Minimum Wage set to $20.00 per hour note: figures are purely demonstrative • $15.00 per hour take-home for labor • Corporations pay $7.50 of hourly wage (roughly what is paid now) • Government pays $12.50 (‘pass-through’ or ‘piggy-back’ on labor unit) – $15.00 an hour purchasing power for $7.50 – $7.50 “Demand Gap” is directly in the Wage Bill – $5.00 “Fiscal Push” to States is in the Wage Bill – … in sum, a $12.50 Federal Government funded labor unit “pass-through” to State, Local, and Municipal Governments (‘back of the envelope’) 12th International Post Keynesian Conference ///// First Postulate Pilloried 5

6. Policy Proposal Path for Wage System • Minimum Wage Policy: “Labor Conversion” – Distribution of “Fiscal Push” ($5.00) … • $2.00 to State Governments – Education, Pension/Retirement Funds, Infrastructure • $2.00 to Local / Municipal Government Bodies – Education, Pension/Retirement Funds, Local Investment • $1.00 pure “Float” component – T.B.D.; but, perhaps per capita Federal tax credits – $7.50 is, again, the “Demand Gap,” or localized and domestic purchasing power 12th International Post Keynesian Conference ///// First Postulate Pilloried 6

7. Policy Proposal Path for Wage System • Minimum Wage Policy: “Labor Conversion” – Business Enterprises, Entrepreneurs, “Nature of the Firm” – fundamentally altered, different tendencies, adjusted conception – profit-seeking enterprises will tend to “place” labor and production domestically and compete for “real” goods (infrastructure, labor) – State and Local Governments – will have available funds based directly on labor units for social services – Jobs with/for State and Local governments (rebuilding, development, green industrialization) » a given level of socially necessary output - based on the labor unit - is classically determined in advance [has theoretical implications] 12th International Post Keynesian Conference ///// First Postulate Pilloried 7

8. Policy Proposal Path for Wage System • Minimum Wage Policy: “Labor Conversion” – HYPER-INFLATION!!! • Nope … no real limits are being crossed • still high unemployment (“slack”), nowhere near capacity utilization • But … yes, the inflation that policy-makers are trying for solely with monetary policy will occur (‘naturally’) – $7.50 labor-cost to Firms (and non-profits) is a floor … can offer more … and have ‘pass-through’ ($12.50) on top of a higher wage – Firms (Business Enterprises, Entrepreneurs) will compete through benefits, perks, paid vacation days 12th International Post Keynesian Conference ///// First Postulate Pilloried 8

9. Policy Proposal Path for Wage System • Full-Time Employment – Federal Law defining “full-time” employment as 25 hours per week • That’s crazy! Is it? – What do the Germans work? • 1,397 avg. annual hours per worker = ~ 27 hour per week (OECD figures, 2012) – What for United States? • 1,790 avg. annual hours per worker = ~ 34.5 hours per week (OECD figures, 2012) 12th International Post Keynesian Conference ///// First Postulate Pilloried 9

10. Policy Proposal Path for Wage System • Full-Time Employment – Greater potential for rebuilding middle class … – Two “full-time” jobs would be 50 hours per week • hard, but doable – Point: 25 hour work week is not crazy – NOTE: Higher minimum wage ($20 here) is still not in real terms what it was in the 1970s (would be $26 today) • but … local production/consumption of real social goods compensates for shortfall (education, infrastructure, retirement services) “wealth is disposable time and nothing more” Source: Anonymous (1821, pamphlet); cited by Marx in the Grundrisse (1857) 12th International Post Keynesian Conference ///// First Postulate Pilloried 10

11. Policy Proposal Path for Wage System • Competition (at Government Level) – A different sort of “Border War” – States and Local/Municipal Governments will compete for workers, not through tax breaks for Corporations – e.g., one minimum wage job means $6,500 net local funds • 25 hours * $20 = $26,000 (total) • 25 hours * $15 = $19,500 (take-home / disposable) – $6,500 annual split into … » $5,200 (State & Local Funds) » $1,300 (T.B.D / float) again: figures are purely demonstrative (‘back of the envelope’) 12th International Post Keynesian Conference ///// First Postulate Pilloried 11

12. Policy Proposal Path for Wage System • Competition … some familiar objections … – DEBT!!! How will we fund it? • sham issue … Federal Government is the monopoly issuer of the currency (it can be afforded) – infrastructure / public investment determined at polity-level … rebirth of a “political economy” (i.e., State/Local/Municipal level) – implications for social mobility; i.e., do you like more private enterprise, or more socialized investment? 12th International Post Keynesian Conference ///// First Postulate Pilloried 12

13. Anticipated Tendencies • Increased Productivity … – due to … less hours … better pay … • Investment decisions of Firms / Business Enterprises … – Cost of importing demand from abroad vs. local/domestic production? – Firms weigh $15.00 purchasing power for $7.50 … plus labor unit “pass through” funds at State/Local level for roads, bridges, trolley cars, etc. … – changes structure of production … more production and consumption goods (real goods) and less financialization (more to-the-asset-finance though) – Environmental implications? Shipping and fuel costs? • Rebuilds communities (polities) from the ground up … – educational institutions, infrastructure, pension funds 12th International Post Keynesian Conference ///// First Postulate Pilloried 13

14. Anticipated Tendencies • Terms of Trade … – Revealed: who owns the U.S. debt is increasingly answered and confirmed (no more scary stories re borrowing from China) – Reduces trade deficit, decreases imported demand from abroad and increases exports (while providing jobs, skills, and production) – tendency for manufacturing to “re-shore” production in a new “style” … high tech • potential exists for small scale, high output production … via machine process … • integrated and competitive production ‘cells’ for domestic manufacturing 12th International Post Keynesian Conference ///// First Postulate Pilloried 14

15. Political, Institutional and Historical Dynamics 12th International Post Keynesian Conference ///// First Postulate Pilloried 15 • Politics … – as of now … Austerity … Secular Stagnation – Political Dysfunction, Deadlock – No movement at Federal level for badly needed infrastructure and green energy investment • Policy Proposals … similar in ‘form’ to that here … – Paul Ryan’s “discussion” piece for “Opportunity Grants” to States – The Levy Institute - Jörg Bibow’s proposal for a Euro Treasury Plan based on per capita GDP figures • “the grants would be proportionate to member-states’ shares of eurozone GDP” • “Labor Conversion” proposition is to push Fiscal policy and production directly through the hourly wage …“classical determinacy” – not denying there would be implications for salaried work; abstracting from that here

16. Political, Institutional and Historical Dynamics • “Labor Conversion” policy path also warranted due to … – Failure of more evenly allocating the share of the gains made in productivity (technological advance & stagnating real wages) – failure of distributing gains made in production is real-world reflection and failure of Marginal Productivity Theory with respect to Income – In other words: Neoclassical/Marginal Productivity is not universal or timeless … must consider production relations » Points to inherent conflictual nature of capitalist social arrangement – Reflects failure to recognize ongoing “abstinence”-theoretics of proto-Neoclassicals … i.e., N.W. Senior made “abstinence” a factor of production – “Abstinence” has been directed into Financial Assets (money/equity capital) … since early 70s 12th International Post Keynesian Conference ///// First Postulate Pilloried 16

17. Political, Institutional and Historical Dynamics • “Labor Conversion” policy path also warranted due to … – Unequal distribution of income, wealth, and resources – fundamentally conflictual nature of capitalism is obvious – therefore, policy must “target” or “convert” labor unit “commodity” directly into social production » capitalism is not equipped to handle socialized investment, either logically or ideologically – the nature of Finance Capital (financialization) is to drain demand for production and consumption goods from the future and destroy it in the present – “non-realized” demand in the present … that is, we have a “glut” of non-realized demand from future being wasted today – it’s being imported too 12th International Post Keynesian Conference ///// First Postulate Pilloried 17

18. Theoretical Appeal: Policy Evaluation • “Labor Conversion” policy path is supported by Labor Unit in Keynes, Sraffa, and Marx » provides avenue for communication between theoretical approaches » window to new social formation (‘epoch’) and Heterodox Citadel • Keynes … labor unit is clear measure of output which can be aggregated and made homogeneous • Sraffa … quantitative labor magnitude used as basis for wage payments • Marx … labor unit imparts quantitative information regarding socially necessary [re-]production and social relations in production (potential for class-informed analysis) 12th International Post Keynesian Conference ///// First Postulate Pilloried 18

19. Theoretical Appeal: Policy Evaluation • Keynesian / Post Keynesian Approach – Short-Period Effective Demand under “Labor Conversion” … • further informed when knowing directed production by virtue of labor unit – Uncertainty and Expectations under “Labor Conversion” … • certainty of macro-aggregates based on labor unit • employment figures give magnitudes of State and Local socialized investment, consumption and development funds (“demand gap” and “fiscal push” in money values) – for Keynes the labor unit is the … • sole productive factor of production [labor is sole real physical input into process (w/ money)] • provides clear measure of output – can be reduced to homogeneous unit – can be aggregated – therefore, warranted in pushing Fiscal “socialization of investment” and “Demand Gap” directly through labor unit (hourly wage) 12th International Post Keynesian Conference ///// First Postulate Pilloried 19

20. Theoretical Appeal: Policy Evaluation • Sraffian Approach – the “Labor Conversion” policy path reflects labor unit output taken as given (datum) • conceptually, would be “directed” labor instead of “direct” (current) or “indirect” (past) labor in Sraffian system – the labor unit “pass-through” is given in advance … • therefore … potential to partially “solve” for system – gives magnitudes for educational investment, pensions, and infrastructure – tendencies of the system point to a ‘long period’ effective demand of socialized investment and long-period prices of production to move towards each other • Post Keynesians and Sraffians can “talk” given new policy path 12th International Post Keynesian Conference ///// First Postulate Pilloried 20

21. Theoretical Appeal: Policy Evaluation • Sraffian Approach – “pass through” funds will equalize via inter-State and intra- State Local/Municipal Government competition (“gravitate”) – By use of standardized labor unit … • uncertainty is mitigated and expectations are firmed up – they become theoretically viable in Sraffian (Neo-Ricardian) system • long-period “centers of gravitation” are more theoretically fertile – Sraffians can “do” policy (make policy assumptions) and solve for partial outcomes based upon labor unit ‘pass-through’ in money prices 12th International Post Keynesian Conference ///// First Postulate Pilloried 21

22. Theoretical Appeal: Policy Evaluation • Marxian Approach – “Labor Conversion” is not a revolution, but a movement towards a fundamentally new mode of production (social formation) – the underlying commodification and exchange of labor-power and capital (money capital) are only being reaffirmed in part … » avoids Proudhon’s error – Certain amount of socially necessary production undertaken solely by virtue of labor unit 12th International Post Keynesian Conference ///// First Postulate Pilloried 22

23. Theoretical Appeal: Policy Evaluation • Marxian Approach – a “commons” is being created directly via the ‘property’ of labor unit • commons of: infrastructure, education, green investment, retirement funds, social services, etc. – price formation and system reproduction is founded on “classically-determined” analytical mechanics of an “exchange-based” system beyond supply and demand schematics • analytical distinction – applies to Keynesian / Post Keynesian and Sraffian approaches too 12th International Post Keynesian Conference ///// First Postulate Pilloried 23

24. Analytical Pillorying of Marginal Productivity • First Postulate: “the wage is equal to the marginal product of labour” – “Labor Conversion” policy directly socializes investment and production based on labor unit magnitudes – analytical and “classically-determined” maneuver whereby Marginal Productivity is “turned on its head” and wage (labor unit) is equal to and calls for direct socialized investment and social reproduction – the First Postulate is “pilloried” in that it is … • specifically addressed (Keynes accepted it for the sake of argument) • over-written, in that Neoclassical economics has succeeded in “instilling” this universal maxim into everyday life • noted as being based on ideological framework from classical liberalism of John Locke which Keynes crushed with “The End of Laissez-Faire” (1926) 12th International Post Keynesian Conference ///// First Postulate Pilloried 24

25. Implications Resulting from Policy: Epochal Adjustment? • A Theoretically Coherent Heterodox Citadel is … – based on a renewed articulation of Labor’s apriority over Capital – situated in a mode of production beyond a capitalist social formation • Current policy proposals all call for more of the same … – increase minimum wage – give tax breaks • Increasing nominal minimum wages does nothing to address the conflicting structural features of capitalist epoch or profits as “real” variables claiming “real wages” for capitalist class • Failure of wage advocates and Obama Administration – e.g., $10.10 Federal or $15.00 for fast food workers when over $26.00 is real-wage adjusted level of 1970s when a middle class ‘existed’ 12th International Post Keynesian Conference ///// First Postulate Pilloried 25

26. Restatement, Main Points, Conclusion • “Labor Conversion” … – Put the “Demand Gap” and a “Fiscal Push” in the wage bill based on labor units to direct socially necessary investment: • infrastructure • green energy, environmental, ecological • retirement funding, pensions, social security • educational investments (human capital) – Adjust ‘heat’ - economic activity - with monetary policy – Our economies are “dry” … austerity and secular stagnation reflect that system is at a theoretical end – We are going the wrong way! 12th International Post Keynesian Conference ///// First Postulate Pilloried 26

27. Restatement, Main Points, Conclusion • Main Points to “Take Home” … – a Heterodox Citadel exists … but … only under socio-provisioning relations that are fundamentally altered beyond and analytically distinct from purely capitalist social relations – Keynesian/Post Keynesian and Sraffian and Marxian approaches can all have simultaneous theoretical coherence under a different mode of production – One path to an alternative socio-provisioning framework and to a “Heterodox Citadel” is through the labor unit as evidenced by the “Labor Conversion” policy path advanced here 12th International Post Keynesian Conference ///// First Postulate Pilloried 27

28. 12th International Post Keynesian Conference Where Do We Go From Here? September 25, 2014 Thank You John Casey Nicolarsen 12th International Post Keynesian Conference ///// First Postulate Pilloried

29. Present Propositions for Social Revolution • Required: Political Organization – Are you truly being represented? (politically) – Does anyone really believe that money is not fully king in politics as of this point? (Citizens United / McCutcheon) • Suggested: Coalition or Unity political party – #1 agenda item: • National Voting Holiday • Mandatory voting requirement for all citizens – a truly representative democracy requires this 12th International Post Keynesian Conference ///// First Postulate Pilloried 29

Add a comment

Related presentations

Rapport Bale III - le texte en français - Comité de Bâle sur le contrôle bancaire

La economía española tiene problemas de 1. productividad del trabajo y 2. de aprov...

El presente trabajo realizará un análisis comparativo del sector de bienes de equi...

- Η προβληματική κατάσταση της ευρωζώνης - ABS -αγορά “τιτλοποιημένων απαιτήσεων...

This presentation gives a short and simple description of the Ponzi Scheme and the...

Neste artigo, analisa-se a estratégia política econômica adotada pelo novo gove...

Related pages

Slides - 2014 - PKConference.com

Slides – 2014; Sponsors – 2014; ... First Postulate Pilloried: Policy as Analytical Tool for Sketching a Heterodox Citadel.
Read more

Median (geometry) - Wikipedia, the free encyclopedia

In geometry, a median of a triangle is a line segment joining a vertex to the midpoint of the opposing side. Every triangle has exactly three medians, ...
Read more

Aesthetics - Wikipedia, the free encyclopedia

Analytic; Aristotelian; Buddhist; Chinese; ... Aesthetics, or the philosophy of ... stating that the latter corresponds to the first derivative of ...
Read more

Phillips Curve: The Concise Encyclopedia of Economics ...

T he Phillips curve represents the relationship between the rate of inflation and the unemployment rate. Although he had precursors, A. W. H. Phillips’s ...
Read more

Linear - definition of linear by The Free Dictionary

... maths of or relating to the first degree: a linear equation. 7. ... Linear Actuator Override Tool; Linear Adaline Algorithm; ... Privacy policy;
Read more

The Foundations of Behavioral Economic Analysis - Sanjit ...

The Foundations of Behavioral Economic Analysis. Sanjit Dhami. September 2016. ISBN: 9780198715535. 1,400 pages Paperback 246x189mm
Read more

Free Geometry Tutorials, Problems and Interactive Applets

Explore interactively topics in geometry. ... Postulates and theorems on congruent triangles are discussed using examples. ... or sketching, to help you ...
Read more

Gilles Deleuze (Stanford Encyclopedia of Philosophy)

The first postulate concerns our ... He does this using resources from analytic philosophy and the Stoics in ... Gilles Deleuze's ...
Read more

A History of Freedom of Thought - Critical Thinking Index Page

Project Gutenberg's A History of Freedom of Thought, ... His compatriots in the first place dislike his ... in which Socrates is pilloried as a typical ...
Read more

another quiz - Innovative Learning Solutions |McGraw Hill ...

El sistema no está respondiendo. ERROR: se ha producido un error en el envío de la prueba. Inténtelo más tarde o remita la URL de la prueba si el ...
Read more