Freeman, Alan (2007): Explaining national inequality: the relevance of Marx and the irrelevance of equilibrium.
Download (57Kb) | Preview
This paper was originally presented at the ‘Marxism and Political Economy’ conference called by the International Socialist Journal on Saturday 29th September 2007. A revised version was presented to the Historical Materialism conference on 13th November 2007. It enquires why, although national economic equality is one of the most persistent features of the history of capitalism, economics as yet lacks a coherent economic explanation of it. It also enquires why Marxism has failed to develop such an explanation, and concludes that in both cases the inadequacies of existing theory arise from the constraints of the general equilibrium paradigm. In the second case, however, this paradigm is wrongly attributed to Marx. The paper argues that Marx’s own, original theory of value, contains the basis for an economic mechanism of divergence in the formation of market value as the average of many producers of differing productivities. The persistence of productivity differentials – excluded by the general equilibrium paradigm – is maintained by a positive feedback mechanism. It yields a surplus (above average) profit to the high productivity producers, who become geographically concentrated within a definite and very stable block of nation-states at an early point in the history of capitalism. From then on, this extra profit could be invested in maintaining a permanent productivity lead. This is an entirely temporal effect and cannot be predicted or reproduced if it is pre-supposed that productivity differentials are ignorable.
|Item Type:||MPRA Paper|
|Original Title:||Explaining national inequality: the relevance of Marx and the irrelevance of equilibrium|
|Keywords:||Inequality; Development; Value Theory; Temporalism, World Systems Theory, Dependency Theory, Globalization, TSSI, General Equilibrium|
|Subjects:||O - Economic Development, Technological Change, and Growth > O1 - Economic Development
O - Economic Development, Technological Change, and Growth > O1 - Economic Development > O10 - General
O - Economic Development, Technological Change, and Growth > O3 - Technological Change; Research and Development; Intellectual Property Rights > O30 - General
B - History of Economic Thought, Methodology, and Heterodox Approaches > B4 - Economic Methodology
O - Economic Development, Technological Change, and Growth > O3 - Technological Change; Research and Development; Intellectual Property Rights > O33 - Technological Change: Choices and Consequences; Diffusion Processes
B - History of Economic Thought, Methodology, and Heterodox Approaches > B2 - History of Economic Thought since 1925
B - History of Economic Thought, Methodology, and Heterodox Approaches > B0 - General > B00 - General
|Depositing User:||Alan Freeman|
|Date Deposited:||22. Jan 2008 16:30|
|Last Modified:||16. Feb 2013 07:09|
Amin, S. (1974), Accumulation on a World Scale. New York: Monthly Review Press.
Amin, S. (1977), Imperialism and Unequal Development. Sussex: Harvester Press.
Braudel, F (1979) Civilisation matérielle, économie et capitalisme XV-XVIIIe siècle. Tome I: Les Structures du quotidien. Paris: Armind Collin
Braudel, F (1979) Civilisation matérielle, économie et capitalisme XV-XVIIIe siècle . Tome II: Les Jeux de l'échange. Paris: Armind Collin
Braudel, F (1979) Civilisation matérielle, économie et capitalisme XV-XVIIIe siècle . Tome III: Le Temps du MondeParis: Armand Collin
Brenner (1974), 'The Origins of Capitalist Development:a Critique of Neo-Smithian Marxism' New Left Review
Carchedi, G. (1991), Frontiers of Political Economy. London: Verso.
Dobb, M (1946), Studies in the Development of Capitalism (London: Routledge and Kegan Paul, 1946).
Dobb, M (1950), 'Reply to Sweezy' Science and Society, XIV, 2, Spring 1950, 134-57,
Dos Santos, Theontonio (1968), La Nueva Dependencia. (Buenos Aires: s/ediciones, 1968)
Emmanuel, A. (1972), Unequal Exchange, New York: Publisher TBA Febvre, L.
Freeman, A. (2004b), 'The Inequality of Nations' in Freeman, A, and Boris Kagarlitsky (eds) (2004) The Politics of Empire: Globalisation in crisis. London: Pluto Press.
Freeman, A., Andrew Kliman and Julian Wells (eds) (2001), The New Value Controversy in Economics, pp55-67. Cheltenham: Edward Elgar.
Freeman, A.. and Carchedi, G. (eds) (1996), Marx and Non-Equilibrium Economics, pp1-29. Cheltenham: Edward Elgar.
Gunder Frank, A. (1967), Capitalism and Underdevelopment in Latin America, New York: Monthly Review Press
Gunder Frank, A. (1969), The Development of Underdevelopment, in Latin America: Underdevelopment or Revolution, New York and London.
Gunder Frank, A. (1972), Lumpenbourgeoisie: Lumpendevelopment. Dependence, Class, and Politics in Latin America, New York: Publisher TBA
Hilferding, R. (1981). Finance Capital, a Study of the Latest Phase of Capitalist Development. London: Routledge and Kegan Paul
Hobson, J (1938). Imperialism: a study. London: George Allen and Unwin
Kliman, A. (1988), 'The Profit Rate Under Continuous Technological Change', Review of Radical Political Economics, 20:2 & 3.
Kliman, A.(2007), Reclaiming Marx's "Capital": A Refutation of the Myth of Inconsistency (Lanham, MD: Lexington Books), 2007
Laclau, E. (1971), 'Feudalism and Capitalism in Latin America', New Left Review, No. 67, May-June 1971, 37-8
Lenin, V. (1952). Imperialism, the Highest Stage of Capitalism, in Lenin, V. (1952) Selected Works, vol I., Moscow: Foreign Languages Publishing House
Mandel, E. (1978), Late Capitalism. London: Verso.
Mandel, E. and Freeman, A. (1984) Marx, Ricardo and Sraffa. London: Verso
Palloix, C. (1975), 'The Self-Expansion of Capital on a World Scale'. Translated from L'internationalisation du capital. Paris: Maspero.
Rostow, W (1960), The Stages of Economic Growth: A Non-Communist Manifesto. Cambridge: Cambridge University Press, 1960
Sweezy, P(1950), 'The Transition from Feudalism to Capitalism', Science and Society, XIV, 2, Spring 1950, 134-57,
Wahl, Jenny.(2001) "Slavery in the United States". EH.Net Encyclopedia, edited by Robert Whaples. August 15, 2001. URL http://eh.net/encyclopedia/article/wahl.slavery.us;
Wallerstein, E. (1974a), The Modern World-System: Capitalist Agriculture and the Origins of the European World-Economy in the Sixteenth Century, New York: Academic Press. Volume I of a three-volume work of which volumes II and III appeared after Brenner's article.
Wallerstein, E. (1974b), 'The Rise and Future Demise of the World Capitalist System: Concepts for Comparative Analysis', Comparative Studies in Society and History, XVI, pp. 387-415
Wallerstein, E.. (1974b), 'From Feudalism to Capitalism: Transition or Transitions?', Social Forces, LV , pp. 273-81
Weber, M. (1930). The Protestant Ethic and the Spirit of Capitalism. London: Unwin
Wells, J.P. (2001). 'What is the distribution of the rate of profit?'. Paper presented to the 2001 mini-conference of the IWGVT at the Eastern Economic Association.