Effective Demand and Say's Law in Marxist Theory: An Evolutionary Perspective
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Rotta, Tomas. 2018. Effective Demand and Say's Law in Marxist Theory: An Evolutionary Perspective. Working Paper. Greenwich Papers in Political Economy, London. [Report]
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Rotta (2018) - Effective Demand and Says Law in Marxist Theory An Evolutionary Perspective - [10october2018] - GPERC wp3.pdf - Published Version Available under License Creative Commons Attribution Non-commercial No Derivatives. Download (1MB) | Preview |
Abstract or Description
In this paper I theorize the roles of effective demand and Say's Law in the Marxist theory of exploitation and accumulation. I claim that an exogenous rate of exploitation implies deploying the strongest version of Say's Law, which leads profit rates not to equalize across sectors. Marx's own procedure in Capital III was therefore logically mistaken. Once Keynes' principle of effective demand is introduced, the rate of exploitation, and hence the distribution of income between wages and profits, becomes endogenous to aggregate demand. Profit rates can then equalize across sectors and prices of production can function as gravitational centers for market prices in a competitive economy. I develop an innovative evolutionary approach to demonstrate how effective demand, within the Marxist framework, determines the rate of exploitation and the rate of profit. At the intersection of Marx, Keynes, and Kalecki, my evolutionary framework integrates effective demand, functional income distribution, profit rate equalization, technological diffusion, and the gravitation towards prices of production.
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Item Type: |
Report (Working Paper) |
| Additional Information: |
JEL Codes: B51, C73, D20 |
| Keywords: |
Marx, Keynes, Kalecki, Effective Demand, Say’s Law |
| Departments, Centres and Research Units: |
Institute of Management Studies |
| Date: |
10 October 2018 |
| Item ID: |
26882 |
| Date Deposited: |
11 Sep 2019 13:56 |
| Last Modified: |
19 Feb 2024 16:30 |
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URI: |
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