Definition & Reality in the General Theory of Political Economy

Transcription

1 Definition & Reality in the General Theory of Political Economy Thomas Colignatus Samuel van Houten Genootschap B

2 Contents Book I Order of presentation The general theory Methodology 14 Book II Trias Politica and Economic Supreme Court The Trias Politica _ The economic record of the 20 th century An Economic Supreme Court Position of the Court in economic theory The record of economics itself Economics 'as usual' and its inadequacy Four empirical cases The moral imperative 33 Book III Economics 'as usual' Stylized history 38 Structure of the argument 41 The difference that it means Unemployment via taxes and minimum wage 43 The earnings distribution 44 Analysing the minimum wage 44 The Tax Void 47 Cause of the Tax Void 48 Development of the Tax Void 51 Marginal tax rate & VAT 53 Marginal tax rate & dynamics 54 Spillover and domino effects 56 Diagnosis and Therapy 56 Stagflation resolved The 1974 Duisenberg disaster 59 Book FV Presentations for the general public Unemployment solved! Enable Russia to help itself 64 Parallel 64 Risk not chance 65 Internal not external Will the West repeat Versailles? 66 Book V Methodology: Definition & Reality How to check? Dealing economically with concepts 70 Maximising information power 70

3 Pythagoras and the circle 73 Falsification 76 Determinism and free will 78 From stylized fact to definition 82 Relating to Hicks Structural and reduced form Direct application to the Economic Supreme Court Methodological summary 85 Book VI Structural models A textbook macro-economic model 87 The IS-LM model 87 The production function. 89 Dynamics versus statics 90 Phillipscurve 90 Macro-economic interactions Heterogeneity and nonlinear taxation 92 Heterogeneity versus homogeneity 92 Nonlinear versus proportional taxation 93 Some literature Summary of current views 94 A simple view 94 A complex view 96 Efficiency wages intermezzo 96 A more sophisticated view 97 Confusions Heterogeneous labour 99 Dromedary supply 99 Dutch income distribution data 100 Definitions and formulas 102 Amendment to the textbook model on the Phillipscurve Subsistence 106 Definitions 107 Economic literature 109 Types of indexation 109 Formal development Phillipscurve 115 Concepts 115 A homogeneous Phillipscurve 118 On expectations 121 Heterogeneous Phillipscurves 122 More factors that cause a shift 122 Crowding out 123 Poverty 124 The submarket Phillipscurves 125 Shifting back Tax basics 126 Taxes and premiums 126 Common structure 127 Nonlinear tax function 128 Exemption 129 The marginal rate 140

4 Balanced growth Off balanced growth 30. Dynamic curvature of the tax wedge Formulas Graphs 31. Differential impact of the minimum wage on exposed and sheltered sectors Model Graphs Tables 32. Dynamic optimality The Phillipscurve revisited Investment, growth and productivity Book VII Social Choice The solution to Arrow's difficulty in social choice Basic concepts Restatement of Arrow's Theorem A note on the name of APDM A lemma Rejection of the Arrow Moral Claim (AMC) Rejection of the Arrow Reasonableness Claim (ARC) Selection of the culprit axiom. Examples of consistent constitutions A reappraisal of the literature Addendum: Sen's restatement in "Development as freedom" Addendum: Mas-colell, Whinston and Green, "Microeconomic Theory" 35. Without time, no morality Control of natural forces in the social process Three traditional methods Borda Fixed point Relation to Saari's work Pareto A note on cheating 36. Some notes on ethics Book VIII Supportive notions 37. On the nature and significance of a free lunch Some quotes Consumers surplus Economic growth 38. Proper definitions for uncertainty and risk Uncertainty Risk

5 Example 195 Wrong use in economics Book IX Reduced form The possibility of full employment in the welfare state Stylized facts 198 Concepts 199 The theorem 201 Graphical presentation The possibility of co-ordination 206 Stylized facts 206 Concepts 207 The special theorem 211 The general theorem 213 On the interaction of the reduced form theorems 214 More on chance 215 Book X s Relating to Mankiw's "Principles" Relating to Krugman, Phelps, Ormerod and Heilbroner & Milberg Review of positions and qualities 220 Krugman: "We don't know" 222 Phelps: "Structural slumps" 224 Ormerod: "Death of economics" 228 H&M: "Crisis of vision" 230 All authors Relating to Sen, Galbraith and Cox & Aim 232 Sen: "Development as freedom" 232 Galbraith: "Created Unequal" 235 Cox & Aim: "Myths of rich and poor" Relating to the OECD and some of its authors 246 The OECD in general 246 The EITC, direct payroll tax reduction and wage cost subsidies After 35 years of mass unemployment: An advice to boycott Holland 250 Summary First considerations 251 The realism of my advice 254 George W. Bush and Iraq and the American economy 254 More on Paul Krugman 256 The Dutch tragedy of the murder of Pim Fortuyn in On the European Enlargement 259 Advice to vote NO on the current proposals for a European Constitution 260 A note on my own position 261 Appendix: After 20 years of mass unemployment: Why we might wish for a parliamentary inquiry Final conclusion 263 Epilogue 264 Appendices 266

6 On the definition of economics 266 Biographical note on Montesquieu 270 Price inflation and wage growth in Holland Income distribution in Holland 1950 and Program used in the analysis on exposed and sheltered sectors 275 A note on Hayek 276 A note on Barrow's "Impossibility" 278 A constitutional amendment for an Economic Supreme Court 279 A parallel argument on the Central Bank 281 About the US Council of Economic Advisers" 282 From the "Employment Act of 1946" 282 Martin Feldstein on the US Council of Economic Advisers 283 Commenting on this 288 Presentation for the National Press in Washington Clinton administration EITC plans for Summaries of additional papers 298 A note on the New Economy (2000) 299 On the 2005 edition of this book 300 Autobiographical note 303 What is new in this analysis? 305 Abstract.^ 306 For the 3 rd edition: the crisis since Papers : A note on competing economic theories on the financial crisis: The case for (hidden) stagflation ' a: Consumer durables as investments that can help us out of the current economic crisis b: The current economic crisis: A solution that "lies buried and obscured in a mass of false theory" c: The Tinbergen & Hueting Approach in the Economics of Ecological Survival d: The macro-economics of repressed stagflation. Part 2: The crisis of and a reduction of the working week e: A macro-economic lesson from Holland f: Gliding into the Bush-Obama Depression / g: A win-win measure out of the crisis: A graphical discussion of the tax void h: Comparison of DRGTPE (2005) and Bezemer (2009) - See the web a: How the Dutch helped cause Iceland's plight - See the web b: Don't tax sweat - See the web c: The crisis and the raison d'etre and prospect for the UK office for budget responsibility versus an economic supreme Court a: The Ricardian Vice anno See the web lb: High Noon at the EU corral. An economic plan for Europe, September f: The ghost of the Berlin Wall of 1989 and the crisis of See the web314 Literature and index 315 Literature ' 315 Index 332