Comments on RWER issue no. 70
real-world economics review issue no. 70
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In this issue:
The euro area’s secular stagnation and what can be done about it 2
Leon Podkaminer download pdf
Six core assumptions for a new conceptual framework for economics 17
Gustavo Marqués download pdf
The Federal Reserve and shared prosperity 27
Thomas Palley download pdf
Still about oil? 49
Shimshon Bichler and Jonathan Nitzan download pdf
A monetary case for value-added negative tax 80
Michael Kowalik download pdf
Did globalisation stimulate increased inequality? 92
Mohammad Muaz Jalil download pdf
A population perspective on the steady state economy 106
Herman Daly download pdf
Money and Say’s law: On the macroeconomic models of Kalecki, Keen and Marx 110
José A. Tapia download pdf
Asymmetric information, critical information and the information interface 121
Patrick Spread download pdf
Productivity decline in the Arab world 140
Ali Kadri download pdf
From TREXIT to GREXIT? – Quo vadis hellas? 161
Claude Hillinger download pdf
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Real-World Economics Review Blog 
Patrick:
Great article!
I am a medical ethicist and I find that the issue of asymmetric information also plays a very important role in shaping the relationship between a physician and his/her patients.
In this case the asymmetry favors the physician who usually transforms it into power/authority/governance/rule over the patient.
There are at least two factors that protect the patient: the ethos (moral character of the physician, and the now well established principle of informed consent, but I mean a consent that is really in-form-ed, that is understanding the form/the intelligible of what is being transacted, that cannot happen without respect, prudence and full disclosure.
If either of these two is missing, and obviously, when both are missing, the patient can easily become a victim of the physician’s libido dominandi (See Eric Voegelin).
Your article has enriched my thinking.
Thank you!
Miguel
The billion population with per capita incomes of $12,000 or more who have 2 children emit 13 times as much carbon dioxide as the poorest billion with per capita incomes of less then $1000 who have 4 or more children
Mr Daly’s post about population and steady state economics has many interesting points (e.g. analogy between growth of human population and growth of artifacts, the wishful thinking about demographic shifts on the part of almost everyone.) It accepts the widespread notion that rising living standards reduce birth rates. My question, because it is not explored in the paper or much of anywhere else, is the opposite: is there evidence that reducing birth rates (thru incentives, campaigns, even some compulsion as in China) leads to rise in living standards?
Still in the woods
Comment on ‘Money and Say’s law: on the macroeconomic models of Kalecki, Keen, and Marx’
José Tapia sets out to clarify the interrelations between aggregate income, aggregate demand, money, credit, profit, and Say’s Law in Kalecki’s, Keen’s, and Marx’s respective approaches. This is an absolute theoretical necessity because Heterodoxy cannot claim that Orthodoxy is false and then present a motley of heterodox approaches that do not fit together or are even contradictory. Heterodoxy has to prove its superiority.
It is remarkable that, for example, the profit theories of the Top 20 heterodox economists (link below) are quite different. Clearly, they cannot all be correct at the same time. As a matter of fact, they are all false. This has been demonstrated in a formally rigorous way for Marx (2014a), Keynes (2011b), Kalecki (2011a), and Keen (2013).
And this is why not only the orthodox but also the heterodox stories about the functioning of the market system are false (2014b). For the correct heterodox version of Say’s Law see (2015b).
The general relationship between monetary profit Qm, distributed profit Yd, investment I and saving Sm is given with:
It is easy to see that Minsky, too, is contained in this equation as a limiting case for Yd=0 and S=0. To recall “For Minsky, the notion that profits equals investment was ‘a profound insight into how a capitalist economy works’.” (Tapia, 2015, p. 110)
For the formally correct interrelation between aggregate demand and money see (2015a).
The general relationship between employment, aggregate demand and changes of money/credit is given with:
This equation contains Keen’s relationship beween changes of employment and changes of debt.
José Tapia has shown how major heterodox economists have treated the relationships between aggregate income, aggregate demand, money, credit, profit, and Say’s Law in their idiosyncratic approaches. What is lacking is a consistent synthesis, so he leaves Heterodoxy in the woods.
In marked contrast, the structural axiomatic approach puts the essential building blocks in a formally rigorous way together. This is the prerequisite for a successful paradigm shift.
Given the failure of Orthodoxy, there cannot be the slightest doubt that a paradigm shift is overdue.
Egmont Kakarot-Handtke
References
Kakarot-Handtke, E. (2011a). What is Wrong With Heterodox Economics?
Kalecki’s Profit Theory as an Example. SSRN Working Paper Series, 1845803:
1–9. URL http://ssrn.com/abstract=1845803
Kakarot-Handtke, E. (2011b). Why Post Keynesianism is Not Yet a Science. SSRN
Working Paper Series, 1966438: 1–15. URL http://ssrn.com/abstract=1966438
Kakarot-Handtke, E. (2013). Debunking Squared. SSRN Working Paper Series,
2357902: 1–5. URL http://papers.ssrn.com/sol3/papers.cfm?abstract_id=2357902
Kakarot-Handtke, E. (2014a). Profit for Marxists. SSRN Working Paper Series,
2414301: 1–25. URL http://papers.ssrn.com/sol3/papers.cfm?abstract_id=2414301
Kakarot-Handtke, E. (2014b). The Three Fatal Mistakes of Yesterday Economics:
Profit, I=S, Employment. SSRN Working Paper Series, 2489792: 1–13. URL
http://papers.ssrn.com/sol3/papers.cfm?abstract_id=2489792
Kakarot-Handtke, E. (2015a). Essentials of Constructive Heterodoxy: Aggregate
Demand. SSRN Working Paper Series, 2564590: 1–23. URL http://papers.ssrn.
com/sol3/papers.cfm?abstract_id=2564590
Kakarot-Handtke, E. (2015b). Essentials of Constructive Heterodoxy: Say’s Law.
SSRN Working Paper Series, 2556434: 1–10. URL http://papers.ssrn.com/sol3/
papers.cfm?abstract_id=2556434
Tapia, J. A. (2015). Money and Say’s law: On the Macroeconomic Models of
Kalecki, Keen, and Marx. real-world economics review, (70): 110–120. URL
Click to access Tapia70.pdf
Link to Top 20 Heterodox Economics Books
https://larspsyll.wordpress.com/2014/11/25/top-20-heterodox-economics-books-2/
What do you make of Hans Rosling’s view, that birth rates are coming down rapidly and that non-subsistence is less harmful to the environment? http://www.gapminder.org
Things like higher education, particularly for women, don’t use a lot of resources naturally, but have high impacts on birth rates and family size, giving women choice. So, surely this is an area to put organisation into? As Roger Erickson quotes Deming’s mentor (I forget his name!), “The only thing greater than the cost of co-ordination is the return on co-ordination”.