Definition & Reality in the General Theory of Political Economy Thomas Colignatus Samuel van Houten Genootschap B 381144
Contents Book I 11 1. Order of presentation 11 2. The general theory 11 3. Methodology 14 Book II Trias Politica and Economic Supreme Court 16 4. The Trias Politica _- 16 5. The economic record of the 20 th century 18 6. An Economic Supreme Court 24 7. Position of the Court in economic theory 26 8. The record of economics itself 26 9. Economics 'as usual' and its inadequacy 30 10. Four empirical cases 32 11. The moral imperative 33 Book III Economics 'as usual' 36 12. 36 Stylized history 38 Structure of the argument 41 The difference that it means 42 13. 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 - 57 14. The 1974 Duisenberg disaster 59 Book FV Presentations for the general public 60 15. Unemployment solved! 60 16. Enable Russia to help itself 64 Parallel 64 Risk not chance 65 Internal not external 65 66 17. Will the West repeat Versailles? 66 Book V Methodology: Definition & Reality 69 18. How to check?. 69 19. Dealing economically with concepts 70 Maximising information power 70
Pythagoras and the circle 73 Falsification 76 Determinism and free will 78 From stylized fact to definition 82 Relating to Hicks 1983 83 20. Structural and reduced form 84 21. Direct application to the Economic Supreme Court 85 22. Methodological summary 85 Book VI Structural models 87 23. A textbook macro-economic model 87 The IS-LM model 87 The production function. 89 Dynamics versus statics 90 Phillipscurve 90 Macro-economic interactions 91 24. Heterogeneity and nonlinear taxation 92 Heterogeneity versus homogeneity 92 Nonlinear versus proportional taxation 93 Some literature 93 25. Summary of current views 94 A simple view 94 A complex view 96 Efficiency wages intermezzo 96 A more sophisticated view 97 Confusions 98 26. Heterogeneous labour 99 Dromedary supply 99 Dutch income distribution data 100 Definitions and formulas 102 Amendment to the textbook model on the Phillipscurve 106 27. Subsistence 106 Definitions 107 Economic literature 109 Types of indexation 109 Formal development 110 28. 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 125 29. Tax basics 126 Taxes and premiums 126 Common structure 127 Nonlinear tax function 128 Exemption 129 The marginal rate 140
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 33. 34. 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 143 144 145 145 145 147 149 149 151 152 154 155 155 155 156 158 158 159 159 162 165 167 167 168 168 169 170 170 172 172 175 175 175 176 177 178 179 182 182 183 183 186 186 186 187 188 192 192 192 193
Example 195 Wrong use in economics 1921-2005 196 Book IX Reduced form 198 39. The possibility of full employment in the welfare state 198 198 Stylized facts 198 Concepts 199 The theorem 201 Graphical presentation 205 40. 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 216 41. Relating to Mankiw's "Principles" 216 42. Relating to Krugman, Phelps, Ormerod and Heilbroner & Milberg 219 220 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 232 43. Relating to Sen, Galbraith and Cox & Aim 232 Sen: "Development as freedom" 232 Galbraith: "Created Unequal" 235 Cox & Aim: "Myths of rich and poor" 242 44. 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 247 45. After 35 years of mass unemployment: An advice to boycott Holland 250 Summary 250 251 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 2002 256 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 262 46. Final conclusion 263 Epilogue 264 Appendices 266
On the definition of economics 266 Biographical note on Montesquieu 270 Price inflation and wage growth in Holland 1950-2002 272 Income distribution in Holland 1950 and 1988 273 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 1993 289 Clinton administration EITC plans for 2000 293 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 2007 311 311 Papers 312 2008: A note on competing economic theories on the 2007-2008+ financial crisis: The case for (hidden) stagflation ' 312 2009a: Consumer durables as investments that can help us out of the current economic crisis 312 2009b: The current economic crisis: A solution that "lies buried and obscured in a mass of false theory" 312 2009c: The Tinbergen & Hueting Approach in the Economics of Ecological Survival 312 2009d: The macro-economics of repressed stagflation. Part 2: The crisis of 2009+ and a reduction of the working week 313 2009e: A macro-economic lesson from Holland 313 2009f: Gliding into the Bush-Obama Depression / 313 2009g: A win-win measure out of the crisis: A graphical discussion of the tax void 313 2009h: Comparison of DRGTPE (2005) and Bezemer (2009) - See the web 314 2010a: How the Dutch helped cause Iceland's plight - See the web 314 2010b: Don't tax sweat - See the web 314 2010c: The crisis and the raison d'etre and prospect for the UK office for budget responsibility versus an economic supreme Court 314 2011a: The Ricardian Vice anno 2011 - See the web 314 201 lb: High Noon at the EU corral. An economic plan for Europe, September 2011 314 2011f: The ghost of the Berlin Wall of 1989 and the crisis of 2011 - See the web314 Literature and index 315 Literature ' 315 Index 332