Rotta, Tomas ORCID: 0000-0002-5304-9890 (2017) Effective demand and Say’s law in Marxist theory: an evolutionary perspective. [Working Paper]

Preview

PDF (Working Paper) 15511 Rotta 2018 Effective Demand and Says Law in Marxist Theory 101018 GPERC wp3.pdf - Published Version Available under License Creative Commons Attribution Non-commercial No Derivatives. Download (1MB) | Preview

Abstract

In this paper I theorize the roles of effective demand and Say’s Law in the Marxist theory of exploitation and accumulation. I claim that an exogenous rate of exploitation implies deploying the strongest version of Say’s Law, which leads profit rates not to equalize across sectors. Marx’s own procedure in Capital III was therefore logically mistaken. Once Keynes’ principle of effective demand is introduced, the rate of exploitation, and hence the distribution of income between wages and profits, becomes endogenous to aggregate demand. Profit rates can then equalize across sectors and prices of production can function as gravitational centers for market prices in a competitive economy. I develop an innovative evolutionary approach to demonstrate how effective demand, within the Marxist framework, determines the rate of exploitation and the rate of profit. At the intersection of Marx, Keynes, and Kalecki, my evolutionary framework integrates effective demand, functional income distribution, profit rate equalization, technological diffusion, and the gravitation towards prices of production.

Item Type:	Working Paper
Uncontrolled Keywords:	Marxist accumulation theory, exploitation, income distribution, Keynes’ effective demand, Say’s law
Subjects:	H Social Sciences > HB Economic Theory
Faculty / School / Research Centre / Research Group:	Faculty of Business Faculty of Business > Department of International Business & Economics Faculty of Business > Institute of Political Economy, Governance, Finance and Accountability (IPEGFA) > Greenwich Political Economy Research Centre (GPERC)
Last Modified:	04 Aug 2021 16:33
URI:	http://gala.gre.ac.uk/id/eprint/15511

Actions (login required)

View Item

Downloads