Michele I. Naples

A Radical Economic Revision of the Transformation Problem

The transformation problem results from extending Marxs analysis to include reproduction. Existing resolutions assume equilibrium and accept Ricardos conclusion that production conditions in basics determine the profit rate. But capitalism cannot be shown to reach a Neo-Ricardian equilibrium. And the Ricardian basics theory of the profit rate is either a physical-standard theory of the profit rate or a capital-productivity theory. Without equilibrium, Marns exploitation theory of the profit rate is consistent with capitalist pricing and implies that capitalism cannot achieve long-run equilibrium, and decentralized pricing behavior can generate nominal-price movements as well as equalizing profit rates.

Dynamic Adjustment and Long-Run Inflation in a Marxian Model

In the division of labor between Post Keynesian and Sraffian theory, inflation has been the province of the former and long-period price theory that of the latter. Pierangelo Garegnani (1983) has contended that natural prices are the center of gravity towards which the economy tends. Yet H. Nikaido (1983) has shown that when the machine-goods sector is more capital-intensive than the economy as a whole, the system will tend to move away from, not towards, its long-run position (see also Roemer, 1980). Interestingly, Nikaido assumes away inflation under simple reproduction, by setting the aggregate change in moneycapital in the system equal to zero. This paper explores the consistency between Marxs hypothesized mechanism whereby the profit rate is equalized, and Sraffian long-run positions. To anticipate, it is found that the Marxian adjustment process implies that chronic, pure inflation is likely to characterize the long period. First a standard of price for the long-run model that allows for the recognition of purely nominal changes in prices will be defined. Then the likelihood of long-period inflation will be derived. It is shown that for Marxs dynamic adjustment mechanism to be rendered consistent with postulated constant prices, it would be necessary to posit irrational

The Unraveling of the Union-Capital Truce and the U.S. Industrial Productivity Crisis

This paper historically and econometrically explores the hypothesis that the productivity slowdown is in part due to the secular increase in industrial conflict, and that this increase derives from the unraveling of the postwar structure of union-management relations (or truce) and historically low unemployment. The empirical investigation of conflict outside the truce and secular productivity growth provides statistical evidence for this hypothesis.

Unperceived Inflation in Shaikh, and Kliman and McGlone: Equilibrium, Disequilibrium, or Nonequilibrium?

The two ‘iterative’ models discussed exhibit unanticipated inflation. Real industry profit rates are not uniform; then why should nominal profit rates be? Even at Marxs first iteration, the real average (non-uniform) profit rate corrected for inflation does not equal the value rate. There is no iterative reconciliation of Marx with Sraffian equilibrium.