Capitalism: Competition, Conflict, Crises

1019 Pages·2015·25.58 MB·English

Capitalism

Capitalism
Competition, Conflict, Crises
AnwarShaikh
3
3
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LibraryofCongressCataloging-in-PublicationData
Names:Shaikh,Anwar,author.
Title:Capitalism:competition,conflict,crises/AnwarShaikh.
Description:Oxford;NewYork,NY:OxfordUniversityPress,[2016]|
Includesbibliographicalreferencesandindex.
Identifiers:LCCN2015034905|ISBN9780199390632(alk.paper)
Subjects:LCSH:Capitalism.|Competition.
Classification:LCCHB501.S56962016|DDC330.12/2—dc23
LCrecordavailableathttp://lccn.loc.gov/2015034905
1 3 5 7 9 8 6 4 2
PrintedbySheridanBooks,USA.
CONTENTS
ListofFigures xx
ListofTables xxix
PrefaceandAcknowledgments xxxv
PartI:FoundationsoftheAnalysis
1. Introduction 3
I. TheApproachoftheBook 3
1. Orderanddisorder 3
2. Neoclassicalresponsetotherealduality 4
3. Keynesianandpost-Keynesianresponsetotherealduality 4
4. Differentpurposeofthisbook 4
II. OutlineoftheBook 7
1. PartI:Foundationsoftheanalysis(chapters1–6) 8
2. PartII:Realcompetition(chapters7–11) 14
3. PartIII:Turbulentmacro-dynamics(chapters12–17) 31
2. TurbulentTrendsandHiddenStructures 56
I. TurbulentGrowth 56
II. Productivity,RealWages,andRealUnitLaborCosts 59
III. TheRateofUnemployment 61
IV. Prices,Inflation,andtheGoldenWave 62
V. TheGeneralRateofProfit 65
VI. TurbulentArbitrage 66
VII. RelativePrices 69
VIII. ConvergenceandDivergenceonaWorldScale 70
IX. SummaryandConclusions 72
3. MicroFoundationsandMacroPatterns 75
I. Introduction 75
II. MicroProcessesandMacroPatterns 78
1. Representingindividualhumanbehavior 78
2. Representingaggregatebehavior 84
3. Aggregaterelations,microfoundations,andthe
questionofrigor 87
III. ShapingStructures,EconomicGradients,andAggregate
EmergentProperties 89
1. Analyticalframeworkforrobustmicroeconomics 90
2. Downwardslopingdemandcurves 91
vi Contents
3. IncomeelasticitiesandEngel’sLaw 92
4. AggregateConsumptionandSavingsFunctions 95
5. Simulations:Insensitivityofaggregaterelationsto
microfoundations 96
IV. MethodologyforEconomicAnalysis 101
V. TurbulentGravitation 104
1. Equilibrationasaturbulentprocessversusequilibrium
asanachievedstate 104
2. Statics,dynamics,andgrowthcycles 105
3. Differencesinthetemporaldimensionsofkey
economicvariables 105
VI. SummaryandCentralImplications 109
4. ProductionandCosts 120
I. Introduction 120
II. ProductioninEconomicTheories 122
1. Circulatingversusfixedinvestment 122
2. Classicalandconventionalnationalaccounts 123
3. Productionandnon-productionlabor 128
III. ProductionRelationsVersusProductionFunctions 130
1. Structuralandtemporaldimensionsofproduction 130
2. Socialandhistoricaldeterminantsofthelengthand
intensityoftheworkingday 131
3. Empiricalevidenceontherelationsbetweenwork
conditionsandlaborproductivity 134
IV. ProductionattheLevelofaFirm 135
1. Workconditionsand“re-switching”alongthe
microeconomicproductionpossibilitiesfrontier 135
2. Outputandproductioncoefficientundersocially
determinedworkconditions 141
V. Cost,Prices,andProfits 151
1. Assumedshapesofcostcurvesinneoclassical,
neo-Ricardian,andpost-Keynesiantheories 151
2. Costcurvesundergeneralconditionsofthelaborprocess 153
3. Implicationsofgeneralcostcurvesforvarious
economicarguments 157
VI. EmpiricalEvidenceonCostCurves 160
5. Exchange,Money,andPrice 165
I. Introduction 165
II. Theoriginsofmodernmoney 169
1. Moneycommodities 170
2. Coins 173
3. Moneytokens 174
4. Inconvertibletokens,forcedcurrency,andfiatmoney 175
5. Banks,credit,andmoney 180
6. Essentialfunctionsofmoney 182
vii Contents
i. Moneyasmediumofpricing 183
ii. Moneyasmediumofcirculation 183
iii. Moneyasmediumofsafety 184
III. ClassicalTheoriesofMoneyandtheNationalPriceLevel 188
1. Classicaltheoriesofmoney 189
2. ThebasicstructureofMarx’stheoryofmoney 191
3. ThekeyelementsinMarx’stheoryofmoney 194
4. EmpiricalpatternswithrespecttoMarx’stheoryofmoney 198
IV. TowardaClassicalTheoryofthePriceLevelUnder
ModernMoney 200
1. Thedeterminationofrelativepriceswithconvertibletokens 200
2. Thedeterminationofrelativepriceswithinconvertibletokens 203
3. Furtherissues 203
6. CapitalandProfit 206
I. Introduction 206
II. TheTwoSourcesofAggregateProfits 208
III. Production,LaborTime,andProfit 212
1. Noaggregateprofitwithoutsurpluslabor 213
2. Positiveprofitsrequiresurpluslabor 216
3. Generalruleformeasuringrealeconomicprofits 217
4. Thepuzzleoftheeffectsofrelativepricesonaggregateprofit 218
IV. AggregateProfitsandTransfersofValue:aGeneral
SolutiontotheUniversal“TransformationProblem” 221
1. Transfersofvalueviachangesinrelativeprices 224
2. Theinfluenceofoutputproportionsontransfersof
valueandaggregateprofit 226
V. Financialprofitsandprofit-on-transfer 229
VI. TheoriesofAggregateProfitinVariousSchools 231
VII. CriticalReviewoftheLiteratureontheEffectsofRelative
PricesonAggregateProfit 238
VIII. MeasurementofProfitandCapital 243
PartII:RealCompetition
7. TheTheoryofRealCompetition 259
I. Introduction 259
II. RealCompetitionwithinanIndustry 261
III. Realcompetitionbetweenindustries 264
IV. RealCompetitionandtheNotionofRegulatingCapitals 265
V. GeneralPhenomenaofRealCompetition 267
VI. EvidenceonRealCompetition 272
1. Thebehaviorofthefirm 272
i. OxfordEconomistsResearchGroup(OERG)
andHallandHitch 272
ii. AndrewsandBrunner 274
iii. Harrod’srevisionofimperfectcompetition 278
iv. Price-cuttingandentryinthebusinessliterature 282
viii Contents
2. Empiricalevidenceonoperatingcostsofplants:Salter 284
3. Choiceoftechniqueunderprice-takingversusprice-cutting 288
4. Empiricalevidenceonfirm-levelcosts,capital
intensity,andprofits 290
5. Empiricalevidenceonequalizationofregulatingrates
ofprofit 295
i. Definingmeasuresofaverageandregulating
ratesofprofit 298
ii. EmpiricalevidenceforOECDcountries 301
iii. Econometrictestsofprofitrateequalization 305
VII. DebateonCompetition,ChoiceofTechnique,andProfitRate 313
1. Thefeasiblerangeofcompetitiveprices 316
2. Economy-wideimplicationsofthechoiceoftechnique 317
3. Implicationsofthechoiceoftechniqueforthetime
pathofthegeneralprofitrate 322
8. DebatesonPerfectandImperfectCompetition 327
I. TheoreticalViews 327
1. Classicalviews 330
i. Smith 330
ii. Ricardo 331
2. Marx 333
i. Regulatingcapital 336
ii. Choiceoftechnique 337
iii. Biasoftechnicalchange 339
3. Thetheoryofperfectcompetition 340
i. Riseofthevisionsofperfectcompetitionand
perfectcapitalism 340
ii. Walrasandgeneralequilibrium 341
iii. WalrasandMarshall 343
iv. Walrasandmodernneoclassicaleconomics 343
v. Crucialroleofprice-takingbehavior 343
vi. Critiquesofperfectcompetition 344
vii. ExternalitiesandtheCoaseTheorem 345
4. Perfectcompetitionrequiresirrationalexpectations 346
i. Perfectknowledgecontradictsperfectcompetition 346
ii. ThefailureoftheQuantityTheoryofCompetition 347
iii. Theneedforcompetitivefirmstoconsiderdemand 347
iv. KeynesandKaleckionmacroimplications 348
v. Patinkinonmacroimplications 349
5. Schumpeter’sviews 349
6. Austrianviews 351
i. Hayek 351
ii. VonMises 351
iii. Kirzner 352
iv. Mueller 352
v. GeneralassessmentofAustrianeconomics 352
ix Contents
7. Marxianmonopolycapitalismtheory 353
8. Riseoftheoriesofimperfectcompetition 357
i. Fromperfecttoimperfectcompetition 357
ii. Sraffa’searlycritiqueofthetheoryofthefirm 357
iii. ChamberlinandRobinson 358
iv. Theneoclassicalcounterattack 358
9. Kaleckiandpost-Keynesianviews 359
i. Kalecki’spricetheory 359
ii. Post-Keynesianpricetheory 361
10. Modernclassicalviews 364
i. Basicpositionsontherelationofmarketprices
topricesofproduction 364
ii. Price-takingversusprice-setting 366
iii. Firmsizeandthedegreeofcompetition 367
II. EmpiricalEvidenceonCompetitionandMonopoly 367
1. Introduction 367
2. Traditionalindicatorsofoligopolyandmonopolypower 368
3. Pricerigidityandmonopolypower 370
4. Profitabilityandmonopolypower 372
5. Empiricalevidenceonprofitratesandmonopolypower 373
6. Empiricalevidenceonprofitmarginsandmonopolypower 377
7. CollusionandProfitability 379
9. CompetitionandInter-IndustrialRelativePrices 380
I. Introduction 380
II. SimpleCommodityProduction 381
III. TheFundamentalEquationofPrice:AdamSmith’sDerivation 385
1. FundamentalEquationappliestoallprices 385
2. TheFundamentalEquationforRelativePrice 386
3. Dampingeffectsofverticalintegration 388
IV. MeasuringtheDistanceBetweenRelativePricesandtheirRegulators 388
1. Numericalexampleofeffectsofchangesinunits 389
2. Deficienciesofregressionanalysisforcross-sectionalanalysis 389
3. Definingtheappropriatemeasureofdeviations 391
V. EvidenceonMarketPricesinRelationtoDirectPrices 395
1. Cross-sectionalevidence 395
2. Time-seriesevidence 396
3. TheSchwartz–PutytestsoftheRicardiantime-serieshypothesis 398
VI. PricesofProduction,DirectPrices,andMarketPrices 400
1. Theoreticalissues 400
2. Numericalexample 404
VII. EvidenceonPricesofProductionasFunctionsofthe
RateofProfitinRelationtoDirectPricesandMarketPrices 406
1. Circulatingcapitalmodel 406
2. Implicationsoflinearoutput–capitalratios 406
3. Fixedcapitalmodel 410
VIII. EmpiricalDistanceMeasures 413