What is the Source of Profit and Interest? A Classical Conundrum Reconsidered

Tomasson, Gunnar and Bezemer, Dirk J (2010): What is the Source of Profit and Interest? A Classical Conundrum Reconsidered. Unpublished.

Abstract

Classical political economy was underpinned by a shared view of the economy as a circular flow. This begged the question of how the value of produce can exceed the value of factor inputs: the ‘Profit Puzzle’. In this paper we advocate an understanding of the Profit Puzzle as a monetary paradox arising from Say’s Law. We trace how Classical, Keynesian and Neoclassical economists addressed the Puzzle. We suggest a solution based on the work of Bentham.

• Item Type: MPRA Paper
• Language: English
• Keywords: Circular Flow, Say's Law, Profit, Credit, Marx, Schumpeter, Keynes
• Subjects: B - History of Economic Thought, Methodology, and Heterodox Approaches > B1 - History of Economic Thought through 1925 > B12 - Classical; E - Macroeconomics and Monetary Economics > E4 - Money and Interest Rates > E44 - Financial Markets and the Macroeconomy

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