It is awful weather where I live. So, I decided to spend the afternoon doing an RI on post-Keynesian economics.
Sraffa and his followers attacked other economists on the subject of capital. In particular, the Sraffians have criticised the precision of marginalist theory. They claim to possess Precise Theory.
It's worth starting with Sraffa's attack on Hayek. I know that this part of the debate was a sideshow, but it will illustrate something important. Bear with me. In Austrian Capital theory there is the concept of "Roundaboutness". Lower interest rates allow production to take more time. Let's say that there are two processes for making a product, X and Y. X is more efficient but takes years longer than Y. Which will be used? It depends on the interest rate. If the interest rate is low it may be best to use process X. It can be funded through to completion by the low interest rates. However, if the interest rate is high then process Y becomes more attractive because the interest cost is lower. Hence lower interest rates make the economy more efficient.
Sraffa and several others pointed out a problem here. Things may not work that way. It may be that lower interest rates actually decrease roundaboutness and higher interest rates increase it. It may even be the case that direction of change also varies with the interest rate. I may talk about these "reswitching" problems in the future, but not today.
We all know that Sraffa and his followers rejected the simple idea of unifying capital into one variable. But the Sraffians also rejected (and still reject) other approaches too. Hayek's approach was more disaggregated than the approach of uniting capital into one variable. But that wasn't good enough for the Sraffian's because it still made some simplifications. What they claim to want is complete theoretical precision.
I'll let the man himself explain it:
"One should emphasize the distinction between two types of measurement. First, there was the one in which the statisticians were mainly interested. Second, there was measurement in theory. The statisticians' measures were only approximate and provided a suitable field for work in solving index number problems. The theoretical measures required absolute precision. Any imperfections in these theoretical measures were not merely upsetting, but knocked down the whole theoretical basis. One could measure capital in pounds or dollars and introduce this into a production function.
... keep reading on reddit ➡G.M. Goshgarian:
>By summer 1966, Althusser had admitted that his critics were right in one crucial respect: the logic of the break isolated the theory required to make the revolution from the realm of the non-theoretical practices in which the revolution had (also) to be made. Theory became theory by virtue of a distantiation that ruled out both its internal determination by Ideology and its direct intervention in ideology: a theory, by definition, had no practical relation to the ideological practices with which it broke. This put philosophy, 'the highest form of the theorization of ideologyl,11 at a double remove from all other practices. It had no practical relation to ideology, one of its objects; nor did it have, as the science of the relation between [theoretical] practice and the other practices', any practical relation to that relation - which, since philosophy, too, was a theoretical practice, included its own relation to itself. Althusser's philosophy thus found itself at odds with two basic contentions of the science on which it claimed to be based: that theory was co-determined - indeed, primarily' determined - by its non-theoretical outside, specifically by the . ideologies, where 'the class struggle figures in person';12 and that the vocation of revolutionary theory was to intervene in ~ the ideological class struggle. What Althusser had called its 'omissions' thus turned out to be symptoms of the fact that he could think the 'union of theory and practice', of theoretical and non-theoretical practice, only as the impossible encounter of two heterogeneous orders ('our union of the body and soul', he quipped in a letter)3 or the tautological consequence of their prior identification.
What I am unable to understand is Goshgarian's point about the distantiation of theory from ideology being a problem. What exactly does he mean by direct intervention in ideology? Isn't Althusser's critique of empiricism as idealist ideology an intervention in ideology and against ideology? Doesn't this critique allow production of Marxist philosophy which shall be able guide all practices ( the economic, political and theoretical) against ideology?
So I was reading about the Cambridge Capital Controversy (CCC) and I came across a multitude of interesting things. Is Sraffa's criticism of the ABCT correct, due to millions of natural rates of interest in the economy because each commodity needs one natural interest rate? Also it would be great if there's a book that addresses this from an Austrian Perspective.
Curious to see something from /u/RobThorpe as I've found they've written before on this.
So I’ve been very active on Twitter and there’s this huge drama going on there because a big account lambasted Taylor’s Capital One commercial and 4 deluxe albums saying it’s very irresponsible of her and gross to do so especially knowing she has a certain influence over her impressionable young fans and some of them might undergo financial struggle just to prove they’re fans.
I personally do not agree with that argument since I feel like it’s taking away the accountability of the individual for their own actions and blaming it on Taylor. I am not a huge fan of credit cards as well but I have one and if used responsibly, they can be very useful. I just don’t get why people are making it super evil now that Taylor partnered with Capital One.
I am not from the US and I can’t really see where they’re coming from so I would like to ask what are your thoughts about it? I feel like Twitter’s super toxic compared to reddit. Even small things there could be blown out of proportions, it’s really crazy.
Here's a decent summary of the Aggregation Problem:
> In neoclassical economics, a production function is often assumed, for example,
Q = A f(K, L)
> where Q is output, A is factor representing technology, K is the sum of the value of capital goods, and L is the labor input. The price of the homogeneous output is taken as the numéraire, so that the value of each capital good is taken as homogeneous with output. Different types of labor are assumed reduced to a common unit, usually unskilled labor. Both inputs have a positive impact on output, with diminishing marginal returns.
> In some more complicated general equilibrium models developed by the neoclassical school, labor and capital are assumed to be heterogeneous and measured in physical units. In most versions of neoclassical growth theory (for example, in the Solow growth model), however, the function is assumed to apply to the entire economy. This view portrays an economy as one big factory rather than as a collection of a large number of heterogeneous workplaces.
> This vision produces a core proposition in textbook neoclassical economics, i.e., that the income earned by each "factor of production" (essentially, labor and "capital") is equal to its marginal product. Thus, with perfect product and input markets, the wage (divided by the price of the product) is alleged to equal the marginal physical product of labor. More importantly for the discussion here, the rate of profit (sometimes confused with the rate of interest, i.e., the cost of borrowing funds) is supposed to equal the marginal physical product of capital. (For simplicity, abbreviate "capital goods" as "capital.") A second core proposition is that a change in the price of a factor of production will lead to a change in the use of that factor – an increase in the rate of profit (associated with falling wages) will lead to more of that factor being used in production. The law of diminishing marginal returns implies that greater use of this input will imply a lower marginal product, all else equal: since a firm is getting less from adding a unit of capital goods than is received from the previous one, the rate of profit must increase to encourage the employment of that extra unit, assuming profit maximization.
> **Piero Sraffa and Joan Robinson, whose work set off the Cambridge controversy, pointed out that there was an inhe
... keep reading on reddit ➡I am confused about this situation with Trump announcing Jerusalem as the capital of Israel. How can the president of the United States determine what the capital of another country is? And I still don't quite understand the controversy
The reason white people have no culture is that capitalism first sunk its roots in Europe, and has festered among western peoples the longest. The first cultural genocide committed by capitalism was white culture.
This is not a 'feel sorry for whites/the west' post. I'm an historian of the Middle Ages, and it is amazing to me how much of a vibrant culture existed in Europe before capitalism really took hold in the 16th-17th centuries and began commodifying every aspect of life. It is also amazing how much barbarism and intolerance continues to be attributed to the Middle Ages in popular culture and some sectors of academia based on little to no evidence, and indeed is actually projection of later barbarism backward to a time in which it did not exist or was rare. The explanation for this is that the idea of 'modern' was crafted explicitly in opposition to several concepts, one of which being the idea of 'medieval.' 'Modern' only became synonymous with good and progressive because 'medieval' was made into something synonymous with primitive and barbaric. It is projection, very similar to how the western world continues to project its own barbarism onto other peoples, like China. The Middle Ages is the time before capitalism in Europe, so of course bourgeois society demonizes it and fashions it into something the average person abhors without actually knowing what it is. Hmmm, what else gets that kind of treatment in western culture?
Experiences varied, obviously, just like anywhere else, but seriously, almost every popular belief about medieval Europe is almost a complete fabrication or myth. Women were far LESS oppressed in 11th century Europe than 18th century Europe. People had BETTER hygiene in 13th century Europe than 17th century Europe (and maybe some 21st century people, honestly). 14th century Italy, with all its roving bands of mercenary companies, had LESS violent crime than 21st century America. Rural peasants in the 12th century had FAR BETTER nutrition than rural lower-classes in 21st century America. Before the 16th century, marriage was not the only type of union, and there's actually very little evidence that homosexual relationships were condemned at all, there's much more evidence for people openly having homosexual relationships without difficulty. The only reason why we can't claim there WASN'T gay marriage is because it's very difficult to define what the fuck marriage was back then because neither the state nor the church played an
... keep reading on reddit ➡I'm surprised I haven't seen this on this subreddit, and it's a shame the Fine Brother's controversy seems not to be understood by Reddit. If people understood what - as a theory - Fine Brothers were trying to do, they'd see it all around them in capitalist society.
Basically, Fine Brothers want to trademark (enclose) a style of video which is, and has been, in the public domain. Following this ownership new creators will need to pay rent to use this style and gain access to the means of production.
https://en.wikipedia.org/wiki/Primitive_accumulation_of_capital
Basically just what the title says. I've been told that "neoclassicals" or mainstream economics has not sufficiently replied to the debate, and that it is not taught in most economics courses. Is this because the "mainstream" side of the debate truly doesn't have a response to Sraffa and Robinson or is the debate resolved?
What even is the debate (I know it's quite technical)?
Thanks
