Are Marginal Products Created ex Nihilo?

June 1, 2024 by

This is Chapter 5 from my book: Ellerman, David. 1995. Intellectual Trespassing as a Way of Life: Essays in Philosophy, Economics, and Mathematics. Lanham MD: Rowman & Littlefield.

When an orthodox economist considers the principle of people getting the fruits of labor, he or she will invariably interpret it in terms of marginal productivity.  The orthodox claim is that under the conditions of competitive equilibrium, each unit of labor “gets what it produces.”  Well-meaning capitalist liberals emphasize that actual capitalism may be neither competitive nor in equilibrium, and in any case, there are enormous difficulties in measuring the “marginal product of each factor of production.”  In other words, they accept that interpretation of marginal productivity theory in principle but fuss about its applicability in practice.

Filed Under: Mathematics, NeoClassical Economic Theory Tagged With: , , , ,

The Libertarian Case for Slavery (A Spoof on Nozick)

June 1, 2024 by

This is Chapter 3 from my book: Ellerman, David. 1995. Intellectual Trespassing as a Way of Life: Essays in Philosophy, Economics, and Mathematics. Lanham MD: Rowman & Littlefield.

Liberalism is living a lie.  It pretends that the contract to sell all of one’s labor, the self-enslavement contract, is an invalid contract beyond the pale while the contract to sell one’s labor piecemeal (by the hour, day, month, or year) is a perfectly valid contract above reproach.  The self-enslavement contract is one of the skeletons in liberalism’s intellectual closet.  Defenders of liberal capitalism are quick to accept even the most superficial arguments against voluntary slavery just to shove the issue back in the closet—just so long as the arguments do not carry over to the current contract to rent oneself out, the employer-employee contract.  Who wants to be seen as, in effect, defending voluntary slavery by showing how most arguments against the self-sale contract are baseless (aside from one “J. Philmore”)?

Filed Under: Classical Liberalism, Inalienable Rights Tagged With: , , , , ,

Myth and Metaphor in Orthodox Economics

June 1, 2024 by

This is Chapter 2 from: Ellerman, David. 1995. Intellectual Trespassing as a Way of Life: Essays in Philosophy, Economics, and Mathematics. Lanham MD: Rowman & Littlefield.

Discussion of the fundamental questions of political economy is today almost completely clouded and distorted by a number of basic myths and metaphors.  Deconstruction is necessary before constructive discussions can begin.  The myths and metaphors are concerned with basic conceptions about property and contract, not with prices and markets.  As layer upon layer of distortions are removed, new facts and new perspectives on old facts will emerge.  These facts have fairly direct normative implications, but the disagreements and controversies are about the facts, not about norms or prescriptions.

Filed Under: Classical Liberalism, Democratic Firm, Inalienable Rights, Property Theory Tagged With: , , , , , ,

Talk: Neo-abolitionism and Marxism

November 28, 2017 by

These are the slides for a talk given in Munich in November 2017 at a conference on the Russian Revolution. The basic argument is that much of what John Stuart Mill said in the middle of the 19th century still sounds radical today. The reason is that Marx, Lenin, and the Russian Revolution set back the Left for a century and a half.

Filed Under: Democratic Firm, Inalienable Rights, Main Blog, Property Theory Tagged With: , , , , ,

Knowledge and Institutional Change

January 5, 2017 by

This paper attempts set forth systematically some of the knowledge questions that determine certain strategies for institutional change.

Filed Under: Development, Main Blog Tagged With: , , ,

Labor theory of property and Marginal productivity theory

April 17, 2016 by

This is a reprint from the journal Economic Thought of a paper on the labor theory of property and the neoclassial theory of marginal productivity.

Filed Under: Democratic Firm, Inalienable Rights, Main Blog, Property Theory Tagged With: , , , , ,

On Property Theory

November 25, 2013 by

This paper is an introduction to property theory including the invisible hand mechanism which handles the initiation and termination of property rights in an on-going private property market economy. The Fundamental Theorem is that when Hume’s conditions of no involuntary transfers and no breached contracts are fulfilled, then the Lockean principle of people getting the fruits of their labor, i.e., imputing legal responsibility in accordance with de facto responsibility is satisfied. The major application is to the current system of a private property market economy based on the renting of persons, i.e., the employment contract.
This is a reprint of the paper in the Journal of Economic Issues in Sept. 2014.

Filed Under: Democratic Firm, Property Theory Tagged With: , , , , , , , ,

Numeraire Illusion: The Final Demise of the Kaldor-Hicks Principle

December 13, 2012 by

The result in this paper undercuts the major applications of the Kaldor-Hicks reasoning in the standard Chicago school (wealth maximization) of law and economics, cost–benefit analysis, policy analysis, and related parts of applied welfare economics.

Filed Under: Property Theory Tagged With: , , ,

Wall Street Capitalism as “The Model” for Market Economies

December 13, 2012 by

This paper addresses the way the American “Wall Street Capitalism” embodies the irresponsible disconnect between action and the results that markets (unlike governments) are supposed to prevent. This paper is in the Slovene journal Theory and Practice that dates back to 1964.

Filed Under: Democratic Firm Tagged With: , , , , ,

Marxism as a Capitalist Tool

December 13, 2012 by

The Great Debate between capitalism and socialism is now in the dustbin of intellectual history, but Marxism still plays an important role in sustaining the misframing of the questions so that the defenders of the present employment system do not have to face the real questions that separate that system from a system of economic democracy. In that sense, Marxism has become the ultimate capitalist tool.

Filed Under: Democratic Firm Tagged With: , ,
Next Page »