Exchange in the Monetary Economy

Kakarot-Handtke, Egmont (2014): Exchange in the Monetary Economy.

Abstract

It is clear by now that pure exchange models are useless. For two reasons. First, because exchange is the other side of specialization in production, and, second, because a direct exchange of goods does not take place in the monetary economy. The decisive drawback of conventional exchange models, though, is that they cannot explain profit. Standard economics rests on behavioral assumptions that are expressed as axioms. The ultimate reason for the failure of conventional exchange theory is that human behavior and axiomatization are disjunct. Notable progress can be made by replacing the subjective-behavioral axioms by objective-structural axioms.

• Item Type: MPRA Paper
• Language: English
• Keywords: new framework of concepts; structure-centric; axiom set; consumption economy; specialization; exchange; profit
• Subjects: B - History of Economic Thought, Methodology, and Heterodox Approaches > B5 - Current Heterodox Approaches > B59 - Other; D - Microeconomics > D4 - Market Structure, Pricing, and Design > D46 - Value Theory; D - Microeconomics > D5 - General Equilibrium and Disequilibrium > D51 - Exchange and Production Economies

References

Arrow, K. J., and Hahn, F. H. (1991). General Competive Analysis. Amsterdam, New York, NY, etc.: North-Holland.

Debreu, G. (1959). Theory of Value. An Axiomatic Analysis of Economic Equilibrium. New Haven, London: Yale University Press.

Kakarot-Handtke, E. (2012). Primary and Secondary Markets. Levy Economics Institute Working Papers, 741: 1–27. URL http://www.levyinstitute.org/publications/?docid=1654.

Kakarot-Handtke, E. (2013). Confused Confusers: How to Stop Thinking Like an Economist and Start Thinking Like a Scientist. SSRN Working Paper Series, 2207598: 1–16. URL http://ssrn.com/abstract=2207598.

Kirkenfeld, T. (1948). The Paradox of Profit. Science & Society, 12(1): 33–41. URL http://www.jstor.org/stable/40399873.

Kline, M. (1982). Mathematics. The Loss of Certainty. Oxford, New York, NY: Oxford University Press.

Marshall, A. (2009). Principles of Economics. New York, NY: Cosimo, 8th edition.

McKenzie, L. W. (2008). General Equilibrium. In S. N. Durlauf, and L. E. Blume (Eds.), The New Palgrave Dictionary of Economics Online, pages 1–18. Palgrave Macmillan, 2nd edition. URL http://www.dictionaryofeconomics.com/article?id=pde2008_G000023.

Mirowski, P. (1995). More Heat than Light. Cambridge: Cambridge University Press.

Rosenberg, A. (1994). What is the Cognitive Status of Economic Theory? In R. E. Backhouse (Ed.), New Directions in Economic Methodology, pages 216–235. London, New York, NY: Routledge.

Schmiechen, M. (2009). Newton’s Principia and Related ‘Principles’ Revisited, volume 1. Norderstedt: Books on Demand, 2nd edition.

Wilson, R. B. (2008). Exchange. In S. N. Durlauf, and L. E. Blume (Eds.), The New Palgrave Dictionary of Economics Online. Palgrave Macmillan, 2nd edition. URL http://www.dictionaryofeconomics.com.dictionaryeconomics. emedia1.bsb-muenchen.de/article?id=pde2008_E000146&edition=current&q=exchange&topicid=&result_number=2.

Wray, L. R. (2002). State Money. International Journal of Political Economy, 32(3): 23–40. URL http://www.jstor.org/stable/40470809.