A Critique of A Marxist Critique Of Thorstein Veblen

Over his career, Thorstein Veblen provided the economics profession with a magnificent economic theory which later proved superior to other economic theories. His principle theory concerns the microeconomic foundations of reserve productive capacity and mark-up pricing. He also examines macroeconomic theory dealing with inflation, unemployment, the business cycle, productivity and income distribution, and economic development. His entire economic theory is ultimately critical of imperialism, militarism, and patriotism, as well as the higher plane capitalism in its zenith of large corporations and financial magnates. Given all these contributions, Marxist economists such as Sweezy, Baran, Dowd, and Hunt have criticized Veblen’s work as being grounded in Say’s Law. They criticize Veblen for having no adequate theory of investment and employment, a weak theory of imperialism, an incomplete theory of the business cycle, a tendency to racism, weak materialism, and so on. This paper aims at providing a condensed review of Veblen’s economic theory within his evolutionary framework, and criticizes the Marxist critique of Veblen’s work. It is hoped that this paper will convince Veblen’s critics of the significant value of his work.

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Recovering Keynesian Phillips curve theory: hysteresis of ideas and the natural rate of unemployment

Review of Keynesian Economics ◽

10.4337/roke.2018.04.07 ◽

2018 ◽

Vol 6 (4) ◽

pp. 473-492 ◽

Cited By ~ 3

Author(s):

Thomas Palley

Keyword(s):

Economic Theory ◽

Phillips Curve ◽

50Th Anniversary ◽

Theoretical Argument ◽

Natural Rate ◽

Macroeconomic Theory ◽

Natural Rate Of Unemployment ◽

Economics Profession ◽

Curve Theory

Economic theory is prone to hysteresis. Once an idea is adopted, it is difficult to change. In the 1970s, the economics profession abandoned the Keynesian Phillips curve and adopted Milton Friedman's natural rate of unemployment (NRU) hypothesis. The shift was facilitated by a series of lucky breaks. Despite much evidence against the NRU, and much evidence and theoretical argument supportive of the Keynesian Phillips curve, the NRU hypothesis remains ascendant. The hypothesis has had an enormous impact on macroeconomic theory and policy. 2018 is the 50th anniversary of Friedman's introduction of the NRU hypothesis. The anniversary offers an opportunity to challenge rather than celebrate it.

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Dynamic Modeling of Private Investment in Agricultural Sector of Pakistan

The Pakistan Development Review ◽

10.30541/v47i4iipp.517-530 ◽

2008 ◽

Vol 47 (4II) ◽

pp. 517-530 ◽

Cited By ~ 4

Author(s):

Imtiaz Ahmad ◽

Abdul Qayyum

Keyword(s):

Economic Growth ◽

Developing Countries ◽

Agricultural Sector ◽

Government Intervention ◽

Private Investment ◽

Productive Capacity ◽

Free Markets ◽

Macroeconomic Theory ◽

The Business Cycle ◽

Investment Spending

Agriculture is the single largest sector of the economy of Pakistan, which has a large number of for warding and back warding linkages. This sector is contributing 21 percent to GDP and employing 44 percent of the workforce. Like other developing countries, poverty in Pakistan is a rural phenomenon; therefore, its development will be a principal vehicle for alleviating poverty. Recent global food crises again providing an opportunity for developing countries like Pakistan to give more serious attention to the development of agriculture. There is no doubt that development of agriculture depends on investment in this sector. Investment is a central issue in macroeconomic theory; it plays an important role in economic growth of a country as it raises the productive capacity of the economy and promotes technological progress through embodiment of new techniques. Investment spending is usually volatile because it depends on multiple factors, and is responsible for much of the fluctuations of GDP over the business cycle [Dornbush, et al. (1999)]. Therefore, it is very important to explore the determinants of investment. The Classicals (Smith, Ricardo, Say, Marshall, and others) maintained that free markets are the best route to national prosperity and economic growth, and there is no need of government intervention to activate and regulate the economy. Keynesians (1936), on the other hand, believed that there is need for government intervention to activate and regulate the saving and investment behaviour of the society.

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Post-Keynesian Macroeconomic Models

Post-Keynesian Empirical Research and the Debate on Financial Market Development ◽

10.4018/978-1-4666-6018-2.ch004 ◽

2014 ◽

pp. 61-95

Keyword(s):

Business Cycle ◽

Financial Markets ◽

Full Employment ◽

Aggregate Demand ◽

Financial Sector ◽

Economic Equilibrium ◽

Productive Capacity ◽

Productivity Analysis ◽

Macroeconomic Models ◽

The Business Cycle

The idea that the financial sector can amplify the business cycle dates back to the early 1900s. The main focus of finance and growth literature is the way in which financial markets influence the main drivers of growth (such as investment and savings) and the fluctuations of business cycle indirectly, via their impact on the firms and consumers. Keynesians and post-Keynesians believe that aggregate demand is responsible for achieving full employment and economic equilibrium, and investment is placed at the centre stage to stimulate aggregate demand. Classical theorists favour equilibrium with equalised profit rates, process of production, and full utilisation of productive capacity. Accordingly, this chapter extensively discusses the post-Keynesian literature in investment and productivity analysis, and their approaches to macroeconomic modelling.

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Einleitung

Jahrbuch für Wirtschaftsgeschichte / Economic History Yearbook ◽

10.1524/jbwg.2011.52.1.9 ◽

2011 ◽

Vol 52 (1) ◽

Author(s):

Reinhard Spree

Keyword(s):

Economic Theory ◽

Structural Change ◽

Business Cycle ◽

Processes Of Change ◽

Special Issue ◽

Economic Crises ◽

Political Conflicts ◽

History Of ◽

Individual Contributions ◽

The Business Cycle

AbstractThis introduction to the special issue on “Cycles and Crises” offers in part a critical look at developments in economic theory that have diverted interest from the business cycle, now considered to be obsolete. To the contrary, we argue here that all economic crises including the most recent are based on cyclical downtrends that are reinforced, prolonged and transformed by externalities.Moreover, these pages present the thesis that cyclical downtrends turn into profound and long-lasting economic crises when they occur during phases of accelerated structural change in economy and society. Thus they happen simultaneously with political conflicts among the larger groups of winners and losers in the processes of change.These contributions question what, if anything, might be learned from the history of cycles and crises. Probably very little, because the desire for excessive profit prompts investors to ignore larger lessons. Instead, people brush aside whatever rules and guidelines are suggested by the study of history. Finally, individual contributions on the topic are briefly introduced.

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Influence of the Information Background on the Economic Behavior of Households

Economic Policy ◽

10.18288/1994-5124-2018-5-66-79 ◽

2018 ◽

Vol 13 (5) ◽

pp. 66-79

Keyword(s):

Economic Theory ◽

Business Cycle ◽

Semantic Analysis ◽

Interdisciplinary Studies ◽

Economic Behavior ◽

Homo Economicus ◽

Economic News ◽

The Business Cycle ◽

The Impact ◽

The Relationship

The article is devoted to the role of the information background in household decisions on consumption-savings. The issue of behavioral prerequisites for decision-making has lately become the mainstream of economic theory. The crisis of the “absolutely rational subject” as a concept led to the development of theories of bounded rationality and to the search for noneconomic determinants of micro- and macroeconomic processes. As a result of interdisciplinary studies conducted at the intersection of psychology, sociology, political science and economics, modern economic theory has been enriched with new approaches and concepts that better describe the reality than models based on the axiom of homo economicus. The main limitations of the rationality of economic entities include the imperfection of information that is available and is at the same time reliable, as well as the necessary costs of its processing plus the probability of errors. The present study is intended to make a contribution to this theory by investigating the impact of the information component in the form of economic news on the behavior of Russian households in terms of disposition of available incomes. The research was based on a selection of news for 2006–2016 by the main television channels of the Russian Federation — the most accessible and trustworthy source of information for households according to public opinion polls. The news was evaluated as negative or positive with the help of linguistic and semantic analysis, and afterwards an econometric analysis of the relationship with economic indicators was performed. It turned out that an increase in uncertainty (expansion of the “spread of negativity and positivity” news) leads to a choice in favor of current consumption, which leads to a reduction of savings as the national investment base. In addition, the authors analyzed the relationship between the tonality of news and its dynamics with the business cycle. The analysis revealed that the “information” cycle correlates, with a certain lag, with the business cycle.

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The Economics of Bernard Lonergan: Context, Modelling and Assessment

10.31219/osf.io/wytpq ◽

2020 ◽

Author(s):

Paul Oslington

Keyword(s):

Economic Theory ◽

Twentieth Century ◽

Business Cycle ◽

Economic Research ◽

Bernard Lonergan ◽

Macroeconomic Model ◽

Graduate Course ◽

Boston College ◽

Context Modelling ◽

The Business Cycle

Bernard Lonergan S.J. (1904-84) is unusual among major theologians in engaging deeply with economic theory. In the 1940s he developed his own dynamic multisectoral macroeconomic model, informed by reading of Smith, Marx, Keynes, Hayek, Schumpeter, and later Kalecki. Lonergan’s economic research is little known because the economic manuscripts were not published in his lifetime, and his interactions with professional economists were limited. In the 1970s, however, when he returned to economics he engaged with Post-Keynesians and taught a graduate course on macroeconomics at Boston College until illness overtook him. This paper places Lonergan’s economic research in the context of his overall intellectual project, outlines his macroeconomic model and associated theory of the business cycle, then evaluates his contribution in relation to mid-twentieth century macroeconomics and considers whether it has anything to offer contemporary economists. Whatever view we take of his theoretical contributions, Lonergan’s work opens up connections between economics and theology.

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