Classical Theory and Policy Analysis

A new research area [R] ‘Classical Theory and Policy Analysis’ (coordinators: Enrico Sergio Levrero and Franklin Serrano) is now part of the European Association for Evolutionary Political Economy (EAEPE, see here). In collaboration with the “Centro di Ricerche e Documentazione Piero Sraffa” it will promote activities to reconstruct economic theory and policy analysis along the lines of the classical or surplus approach. In particular, it will promote research on the determinants of distribution and capital accumulation, economic policy proposals alternative to those advanced on the basis of the dominant neoclassical theories, and studies on the method of analysis adopted within the classical theory and its relation with Institutionalism. It will also participate to the organisation of the Eaepe Summer School held at Roma Tre University and to the Summer School of Heterodox Economics held at Poznan University of Economics (partners: Review of Keynesian Economics and Forum for Social Economics).

On the occasion of the 26th EAEPE Conference to be held in Nicosia (Cyprus), 6-8 november 2014 on the theme “Unemployment and Austerity in Mediterranean European Countries” the research area [R] will organise a special session on ‘Demand led growth and fiscal policies’. For papers on this theme or subjects relating to the research area [R], the submission deadline is 30 May 2014. For any further information, please contact the coordinators or see the conference website.

Marx on Absolute and Relative Wages and the Modern Theory of Distribution

Given recent reconsiderations of the Marxian 'falling rate of profit' hypothesis, I reckon it be of readers' interest to consider this article by Enrico Sergio Levrero (see here).

From the abstract:

"This paper aims at clarifying some aspects of Marx’s analysis of the determinants of wages and of the peculiarity of labour as a commodity, focusing on three related issues. The first is that of Marx’s notion of the subsistence (or natural) wage rate: the subsistence wage will be shown to stem, according to Marx, from socially determined conditions of reproduction of an efficient labouring class. The second issue refers to the distinction between the natural and the market wage rate that can be found in Marx, and his critique of Ricardo’s analysis of the determinants of the price of labour. Here the ‘law of population peculiar to the capitalist mode of production’ (that is, Marx’s industrial reserve army mechanism) will be considered both with respect to cyclical fluctuations of wages and to their trend over time. Moreover, a classification of the social and institutional factors affecting the average wage rate will be advanced. Finally, the last issue concerns Marx’s analysis of the effects of technical progress on both absolute and relative wages (that is, the wage share). It will also be discussed by relating it back to the longstanding debate on the Marxian law of the falling rate of profit, and addressing some possible scenarios of the trend of wages and distribution."