Question: Check out this graph of income distribution in the U.S. over time https://www.u.arizona.edu/~lkenwor/inequalitygraph.pdf and explain what the graph demonstrates:
a) Using the neo-classical (NC) framework (get creative including using shortcomings or critiques).
b) Using the Keynesian framework.
c) Using the labor theory of value framework.
Question: How do the different theoretical approaches explain a situation where an unemployed worker who has a hungry family accepts a job for below-subsistence wages? What about a situation where this worker can’t find a job? Use arguments of the different Dead White Guys (DWGs) we’ve studied here. Is it even possible that a job is offered below subsistence wages according to the different theories?
a) Within the neo-classical framework? (A critique is okay.)
b) Within the Keynesian framework? (Can be considered NC, but with important changes. Explain why this is the case.)
c) Within the labor theory of value framework?
Question: Demonstrate your understanding of the critiques of the marginal productivity theory of distribution. Pick five assumptions from the following table. The table is an incomplete representation of all the facets you will cover in your answer.
• Write out your answers to explain all facets of each of your five assumptions. The table only provides an example of a starting point for your answers.
• Label your short answers “part 1” etc.
• Rely on the text for your answers –they’re in there- but use your own words to explain.
Question: Position essay.
• Label your answers (with “part a”, etc).
• Make every effort to relate/contrast your views to those of economists we’ve studied.
• Demonstrate that you’ve given the material some thought and that you understand the differences in approach amongst economic theorists (DWGs) by explaining your answers thoroughly.
a) What theory of value represents your viewpoint? Where do profits come from –through the process of exchange, or through the production process or with an adding-up cost of production? Do your views represent a mixed bag like Smith and Marshall?
b) What is your theory of human behavior? i.e., do you see humans as profit-maximizing individualists, or as community-minded workers who get great satisfaction from their work like Veblen’s idea of “workmanship,” or something else?
c) Likewise, how are wages and profits determined in your economic theory? By subsistence level like Malthus or by social/historical determinants like Marx or by supply and demand in the market, like NC theorists?
d) Is reform (change in the distribution of income) possible or desirable within your theory of economics? Are humans expected to accept their position “in the great lottery of life?” If reform is possible, is it possible by means of social evolution (i.e., through the educational systems, the media, etc.), political means (through activism /lobbying or at the polls), or by revolutionary means, or etc.? Please explain what you mean in detail.
e) Are there “natural laws” or tendencies in your economic theory that apply? i.e. Malthus’s Theory of Population or Marx’s idea that competition in capitalistic economies tended to lead to the concentration of wealth and economic power in the hands of fewer and fewer even as there was a fall in the rate of profit? Or Marx’s or Veblen’s idea of the “increasing misery of the worker?” What about private property, including the ownership of land and capital as a “natural law” like Bastiat, etc.
f) What is your social theory? For example, what is the relationship between governments/laws and capitalists and citizens? Do you see it as a mutually beneficial relationship or is government doing a poor job representing the interests of the people? Should government’s role be to enforce private property laws, to distribute income, or to impose stability on the system?
g) For you, is economics is a “pure” science that operates with laws like the “hard sciences” (Bastiat and Menger believed this.)? If you believe that economics is a hard science, how do you explain the “swing of the pendulum” that happens as different economic ideas come into vogue?
h) On what grounds can you make any policy recommendations? i.e. How can you make judgments about what things “should” look like or what “should” be done in the realm where economics has an impact on people’s lives like externalities, unemployment rates, etc?
i) What is your approach/process for understanding economic events (what is your methodology)? Do you try to explain phenomena by trying to make exceptions or adjustments within the economic model (like the new NC theorists do) or by looking at data (like the “old institutionalists”) or by looking for changes in socio-political-economic institutions and/or culture (like “radical institutionalists” such as Veblen)?
j) How do economic systems evolve if they do? Is your theory of economics deterministic (that is, do you believe, like Adam Smith, that there are stages of progress through which different socio-economic systems evolve and capitalism is the highest socio-political form) or are humans free to create the system they want or something in-between? Explain.
k) What is your vision for the full expression of humankind? You can answer in terms of resource allocation, expression/freedom, humankind’s fulfillment, etc. Does your vision require change/reform (revisit part “d”) cultural, governmental, and institutional, etc.? Explain.
l) Is your theory unified (is it a “general theory”)? Are there inconsistencies or shortcomings?
m) How has your position changed on any number of the above since taking this class or since you launched your study of economics? Recall that Bentham switched his position significantly over the course of his life (and it turns out that Hodgskin, who, in our textbook appears to be a socialist leaned right-wing after his first decade of writing).
n) What do you want to learn more about? How will you investigate this? i.e. Do you have an interest in unemployment and/or adjustment of markets in the short-run vs. the long-run, in Veblen-style institutionalism, etc.
Question: According to Veblen, capitalists rely on two principal means of cultural discipline and social control to keep profit rates up: (a) patriotism, nationalism, militarism, and imperialism; and (b) emulative consumption or consumerism.
a) Explain how for Veblen capitalists emotionally and ideologically control the population on the basis of patriotism, nationalism, militarism, and imperialism? Explain how this means of control is related to the internationalization of capital and absentee owners? (Bring Hobson’s and Luxemburg’s views of imperialism into the picture here.)
b) What does Veblen mean by pecuniary culture? How do conspicuous consumption and emulative consumption explain pecuniary culture? How does the capitalist class control society by using patriotism and emulative consumption (or consumerism)?