Consumers and enterprises as actors on the market

This conceptual paper discusses the phenomenon of differentiation made possible through branding or innovation or a combination of the two. Differentiation is eventually the driving force for the development of its own negation, commoditization. When customers have endured a commoditized market long enough the opportunities open up for creative destruction, this concept of Schumpeter (1942), means that an entrepreneur invents a completely new way of satisfying the customers’ unsatisfied needs, making the industry that no longer bothered about their customers. Many researchers have tried to re/brand destructive innovation as their own, with concepts, such as of ”transilience”, and “blue ocean strategy’, as opposed to ‘red ocean strategy’. The paper focuses on innovation as a differentiation strategy and on temporary monopoly rent as a driver of innovation. Increased competition and shortening and life cycles makes capitalism more volatile and the strategies to reduce the risks involved are discussed. These strategies lead to the real-world implementation of the concentration of capital forecasted by Marx and feared by Schumpeter. The paper identifies the need to continuously monitor the concentration of capital and to understand individual markets by studying the firm’s profit.

Intellectual property, technorents and the labour share of production

How does the capture of explicit monopoly rent via intellectual property rights interact with the capture of additional profit via monopsonistic labour markets, and with what consequences? Most analyses of changes in the labour market focus on the distributional struggle between capital and labour over the wage share. This paper examines how the distributional struggle among firms over shares of aggregate profit has affected the labour market, generating rising income inequality. Over the past 40 years, struggles over shares of the value generated in a given commodity chain have driven de jure but not de facto vertical disintegration of those value chains. Firms vertically disintegrated by outsourcing non-core production and support activities, by in-sourcing contingent labour, and, where possible, by adopting a franchise model of corporate organization. The franchise model enables core firms to exert near total control over firms that are technically separate legal entities, while avoiding legal and social responsibility for the workers (and owners) of those subordinate firms. Vertical disintegration has produced three ideal typical kinds of firms whose differing ability to capture value and thus profit stems from their different forms of control over other firms in the value chain. Vertical disintegration generated labour shedding and employment contingency. Differential value capture has concentrated profit into firms with relatively small headcounts, reducing the degree to which profits are (partially) redistributed among workers.

Patent Races for COVID-19 Vaccines and Liability Rules

I analyze a model of patent races for COVID-19 vaccines under alternative liability rules. The first inventor of the vaccine gets the monopoly rent, but must assume full liability from its side effects. In this model, firms choose two kinds of investments, one for inventing a vaccine and the other for its safety. I show that firms have an incentive to overinvest in both activities under strict liability. This is contrasted with the established result established that the injurer takes socially optimal accident-preventing precaution under strict liability. This contrast comes from the competition effect. Overinvestment in inventing vaccines due to competition makes a firm overinvest in safety as well. I also argue that it is undesirable for firms to get full or partial exemption from liability, because it would reduce the incentive to invest in safety. Instead, reducing the monopoly rent by regulating the vaccine price resolves both overinvestment problems.

Vantržišna motivacija tržišta umetničkih dela

Art markets are not homogeneous, the difference being especially between the art products that can be technically reproduced and the unique products. As for the former, regulations of the copyright type introduce certain specificities (the author retains some rights over the object in circulation— for example, she or he can withdraw it). In case of unique goods, the demand is determined by the buyers’ tastes and does not result from some generally valid presupposition: thus, these goods have a price, but they have no value. Since the aesthetic nature of the reproducible works of art is subject to the same laws as the unique artworks, the economy of unique artworks can serve as a paradigm for the economy of artworks in general. According to a theory developed by Rade Pantić, the price of unique artworks is a monopoly rent. As any other rent, it is determined by non-economic mechanisms. These mechanisms should allow for the freedom of individual tastes and at the same time provide a unique field within which these idiosyncratic attitudes can interact. The mechanisms determining the rent (price) of artworks are therefore ideological apparatuses that present themselves and their elements (individual taste judgments) as non-ideological, and moreover formulate the judgments as individual receptions open to “interpretation,” i.e. as cognitive-affective material to be processed in specific symbolic formations (in curatorial practices, art criticism, philosophical interventions, and alike). In contemporary art, the structure of ideological apparatuses reproduces domination-through-fragmentation, typical of contemporary capitalism.

USE OF MONOPOLY RENT AS A BASIS FOR THE FORMATION OF THE EAEU BUDGET

The article considers the problem of financing of the Eurasian Economic Union budget. The author propose the use of rent method for calculation of the size of the contributions of the EAEU member states. The burden of formation a budget between the member states of the Union is distributed in accordance with the ratio of the amount of monopoly rent received in the reviewed states. The application of the proposed method will be an establishing of more economically justified contributions. The author believes it will allow the Republic of Belarus to save several million dollars of budgetary funds per year. The article also reveals the discrepancy between the criteria for including business entities among companies that occupies a dominant position in the market of the EAEU member states. The correction of such discrepancy will contribute to improvement of overall Antimonopoly Policy and further successful integration of Union’s member states.