Joan Robinson as a teacher

Sraffa's construct, the standard commodity, responds to Ricardo's search for an ‘invariable’ measure of value, since it is a measurement unit invariant to changes in distribution. But Sraffa suggests that there is no ‘counterpart,’ no analogous search or needed construct, for the ‘problem’ of ‘difference’ as distinct from change (‘why two commodities produced by the same quantities of labour are not of the same exchangeable value’). Difference in this sense is crucial to Marx, who distinguishes value and surplus-value from capitalist price and profit in part in order to theorize differences as systematic value transfers. In that effort, Marx repeatedly poses commodities and capitals as ‘aliquot parts’ of the whole, so that profit is a redistributed share of aggregate surplus-value. This paper shows that, when Marx's aliquot part imagery is formalized, the resulting hypothetical system represents a meaningful ‘counterpart,’ a construct with a function in Marx's analysis of difference comparable to that of Sraffa's standard commodity in analyzing distributional change. A Marxian ‘standard system’ posing each commodity as an aliquot part of the social capital (a) defines the needed labor-time unit of social account by homogenizing heterogeneous concrete labors as socially average (‘abstract’) labor while simultaneously (b) allowing the derivation of exchange-value (e.g., capitalist production price) on that scale via summation of directly and indirectly embodied labor. Indeed, Marx's approach to production prices as resulting from an inter-industry redistribution of aggregate surplus-value is shown to be algebraically identical to the calculation of labor-embodied under ‘aliquot part’ production conditions.     

Marx on division of labour,mechanization and technical progress

The paper reconstructs Marx's analysis of the development of the forces of production in terms of the interaction among division of labour in particular processes of production, social division of labour and technical progress. It also brings out Marx's conception of technical progress and establishes his view of the essential interdependence among the development of the forces of production, the process of capital accumulation and the expansion of markets; it further brings out the role of competition as a fundamental driving force in the interrelated processes of accumulation and of development of the social productivity of labour.     

The specificity of manufacturing in Marx's economic thought

Abstract

This article examines Marx's approach to manufacturing and the extent to which manufacturing could be considered to have a special place in Marx's economic thought, especially in relation to accumulation and growth. The important ‘progressive’ features of manufacturing that can be found in Marx's writings and which are discussed here include: division of labour; socialisation of labour; mechanisation; increasing returns to scale; learning-by-doing; technological advancement; and overall, superior potential for cumulative productivity increases. These insights anticipate some of the thinking around the specificity of manufacturing found in twentieth-century structuralist development economics and some heterodox schools of thought such as Kaldorian approaches. This article suggests an interpretation of Marx as having a two-dimensional conceptualisation of activity specificity, with not only sectoral but also ‘technological–organisational’ dimensions, where these two dimensions are not fully independent of each other.     

A Reassessment of Marx's Thought on Labour Exchange

This article reassesses Marx's thought on labour exchange and illuminates its worth. In the Grundrisse and subsequent pre-Capital writings, Marx presented arguments that attached importance to worker subjectivity towards labour performance based on the distinction between labour capacity and labour. This afforded insights into the peculiarities of labour exchange that preclude market determination of wages and other working conditions and necessitate the intervention of class struggle and other socio-political factors in their settlement. The significance of Marx's perspective is further elucidated when compared with the classical tradition and the position of neoclassical economics. Although his emphasis on worker autonomy receded in Capital, his earlier arguments on labour exchange, it is posited, remain highly relevant to understanding industrial relations in today's capitalist economy.     

Contesting the Value(s) of GM Wheat on the Canadian Prairies

This article investigates the ways in which a Canadian coalition of farmers, consumers, and environmental, health, and industry organisations politicised the value of Monsanto's proposed Roundup Ready (RR) wheat in the early 2000s. Eventually pressured to withdraw its application for unconfined release of RR wheat in 2004, I argue that Monsanto's proposed RR wheat economy crossed moral boundaries for the groups involved in the coalition against RR wheat. Specifically, Monsanto's anticipated RR wheat economy violated producers' expectations about their cultural-economic livelihoods: it proposed uncertainty in the realms of exchange and use value, moved public surplus into private hands and infringed on cultural attachments to wheat. My theoretical contribution hinges on the concept of moral economy, which is conventionally understood as promoting a ‘cultural turn’ in economic explanations. Instead, I show how Marx's labour theory of value similarly pointed to the inextricability of economic values and cultural processes and their attachment to all commodities including labour.     

Spatial Variation in Labour Productivity in British Manufacturing

This paper identifies factors underpinning spatial variation in manufacturing labour productivity in Britain at the county level, examining the relative influences of spatial external effects, the degree of capital intensity, industrial structure, and labour force 'quality'. In doing so, it sets out to test the hypothesis that spatial external economies are not only derived from the immediate environment but also exist over more dispersed areas, such that they can be enjoyed by firms in locations outside major centres. The results show that locational externalities continue to have a very small impact on spatial variation in manufacturing labour productivity in Britain. The really large and instrumental effects arise from variation in capital to labour ratios, industrial structure, and labour force characteristics.     

The Dynamic Effects of the US Productivity Boom on Australia*

How has the USA's ‘new economy’ productivity boom affected Australia? We consider this question using a dynamic multisector growth model of the Australian and US economies. We find that productivity growth in the US durables sector generates small but important gains to Australia. We find that the transmission of growth is generated through increased export demand for agriculture. Consequently, the USA's productivity growth tends to favour Australia's traditional export sectors. Likewise, it increases the relative demand for less skilled labour in Australia and reduces the demand for more skilled labour and higher education.     

The physiocrats' concept of labour: A difficulty in Marx's interpretation

Abstract

This article explains the difference between the concept of labour developed by the Physiocrats and Marx. We show that Marx's interpretation based on Turgot is questionable. Whereas Marx bases his ideas on a Lockian definition of labour which puts labour at the origin of value, Quesnay and his disciples develop a mechanistic definition of labour established on Neo-Cartesian foundations. This particular concept of labour then combines with a bio-physical definition of production. The theory of the net product is therefore re-interpreted.     

Trends and cycles under changing economic conditions

The identification of trends and cycles is often a challenging task under sizeable changes in economic conditions. Business cycles have unique features, varying in duration, intensity and across countries. We propose an unobserved components model with flexible product and labour market equations to cope with evolving economic conditions, namely time-varying inflation processes and labour share trends. Moreover, we augment the information set with data-driven low-frequency movements in real variables before initiating a joint estimation of all unobserved components. We use the same model to establish an international comparison between the euro area and Portugal covering 40 years of data. We conclude that Portugal witnessed (i) a steeper potential output deceleration since the 1990s, driven initially by productivity and afterwards also by the labour and capital inputs; (ii) a pervasively higher volatility in labour and product markets; and (iii) a long-lived interruption in convergence trends after the 2000s.     

UNEMPLOYMENT AND THE PRODUCTIVITY SLOWDOWN: AN EFFCIENCY WAGE PERSPECTIVE

Many OECD economies suffered a productivity slowdown beginning in the early 1970s. However, the increase in unemployment that followed this slowdown was more pronounced in European economies relative to the USA. In this paper we present an efficiency wage model, which enables us to identify two basic channels through which the productivity slowdown can affect workers' effort incentives. Predictions of the model are consistent with the different trends in unemployment across countries over this period in the face of a similar slowdown in productivity. We also demonstrate how the link between growth and unemployment depends upon labour market institutions in such a way that we can reconcile the mixed empirical results observed in the literature.     

Costly investment, complementarities and the skill premium

We propose a new framework to analyse the relationship between the relative high-skilled labour endowment, the skill premium and economic growth. Building on Acemoglu and Zilibotti (2001), we introduce physical capital; internal costly investment in both capital and R&D; and complementarities between intermediate goods. We only find a positive relationship between the relative labour endowment and both the skill premium and economic growth within determined intervals of relative labour endowment values, which vary with the absolute productive advantage of high over low-skilled labour. The model thus accommodates theoretically mixed empirical results on the relative labour endowment-skill premium relationship. We further find that the impact on both the relative labour endowment and the skill premium of a rise in investment costs or in the complementarities degree depends on: (i) the absolute productivity advantage of high over low-skilled labour; and (ii) the relative labour endowment.     

Marx and Schumpeter: A Comparison of their Theories of Development

This paper challenges Paul Samuelson's claim that the development theories of Marx and Schumpeter have little in common. There are indeed broad similarities between the two theories, arising principally from Schumpeter's use of Marx's method (with some interesting modifications), which he calls the ‘economic interpretation of history’. This discussion leads us to ask if we can incorporate into Marx's method some of the insights suggested by Schumpeter's modifications. We show that Marx's method is enriched by the insertion into it of an explicit, although limited, role of the individual (human agency). The paper then turns to the differences between the two theories, concerning the theory of value and the analysis of social classes. We find an unresolved tension in Schumpeter's system of thought, between his attempt to construct a model of a dynamic, evolving economy on Marxian lines (albeit an alternative to Marx's model), and his emphasis on the role of the individual, which he inserts into an essentially static, Walrasian model.     

Modernization,Heterogeneity and Employment in Mexico

The principal objective of this paper is to study the effects of Mexico's recent economic reforms on employment and labour productivity. The author argues that the globalization and modernization entailed by the reforms tended to accentuate the structural heterogeneity and the differentials in productivity levels between different sectors.While in formal activities the growth rate of labour productivity accelerated, the contrary occurred in informal activities. Given the relatively moderate rate of increase in output and employment of formal activities, it is very likely that the greater heterogeneity has contributed to the decrease in the average growth rate of labour productivity as observed in Mexico in the period studied.     

The evolving patterns of global production of multi‐product firms

We extend the framework of Antràs and Helpman (2004) to investigate how multi‐product firms choose different production structures for producing various products and derive four equilibrium patterns of global production. We show that the evolving patterns of inward foreign direct investment and outward processing trade observed in China can be explained by the rapid increase in labour productivity relative to wages. The model predicts that, as labour productivity increases, outsourcing activities will eventually exhibit an inverse U‐shape. We also find that technology spillover increases outsourcing but reduces FDI; the increase in labour productivity, however, could raise both FDI and outsourcing activities.     

Do Workplace Contracts Harm Labour Productivity Growth? A Reconsideration of the Macroeconomic Evidence from New Zealand

This article reconsiders the argument advanced or endorsed by a large number of leading Australian academics and others that labour productivity growth in New Zealand fell markedly during the period in which New Zealand's Employment Contracts Act 1991 (ECA) was operative—that is, for most of the 1990s. On the one hand, based on total economy estimates developed by The Conference Board and the Groningen Growth and Development Centre, labour productivity growth was unexceptional though a little higher than the New Zealand average of the last three decades or so. On the other hand, based on newly released official estimates of New Zealand's ‘measured sector’ (which accounts for about two‐thirds of the total economy), labour productivity growth was almost identical to that of Australia during the EC A period. This in turn suggests that New Zealand's labour productivity growth rose markedly for the measured sector during the EC A years. All in all, the evidence presented in this article is inconsistent with claims that the period of the EC A was associated with relatively weak New Zealand productivity growth. Selected issues arising from these findings are briefly canvassed.     

Marx's Legacy,Régulation Theory and Contemporary Capitalism

ABSTRACT

The 2008 financial crisis has challenged the merits of standard economic theories and sparked surprising references to Marxist analyses. A monetary economy is prone to crises, the interaction of competition with capital–labour relations launches relentless accumulation and over-accumulation crises exacerbate the built-in contradictions of the capitalist mode of production. Nevertheless, until now, these imbalances have not unfolded into its rapid and complete collapse. From the social and political struggles of labour and citizens, the 1929 crisis and finally the Second World War, new configurations emerge for the wage–labour nexus, the form of competition and the monetary and credit regime. These delineate an unprecedented accumulation regime, Fordism. In turn, Fordism enters a structural crisis and a dramatic change in institutionalized compromises favours a still different accumulation regime (finance-led) that evolved from one speculative boom to another till the 2008 American financial collapse. Thus the mobilization of Marx's foundational hypotheses by Régulation theory allows a better understanding than most alternative theories of major contemporary stylized facts: productivity slow-down and social polarization in mature economies, tensions between capitalism and democracy, new industrial capitalisms and limits to globalization.     

Structural transformation and productivity growth in India during 1960–2010

In this paper, we examine the role of structural change and sectoral productivity growth in explaining the aggregate productivity of India relative to the United Sates during 1960–2010. We set up a simple two sector general equilibrium model and calibrate it to fit the structural transformation of United States. Our calibrated model for India highlights the relative importance of agricultural productivity growth in explaining its slow process of catching up in terms of aggregate productivity. We show that India could have progressed at a much faster rate and closed a substantial part of its aggregate productivity gap if its agricultural sector had grown at a rate at par with the United States. It is India's relative productivity growth in the non-agricultural sector that explains all the recent success in its closing the aggregate productivity gap with the United States. We also found that an elimination of relative distortion in agriculture in India could result into a modest improvement in the aggregate labour productivity.     

The impact of process innovations on firm's productivity growth: the case of Spain

The main aim of this paper is to investigate about the effect that a measure of the process innovation performance of a firm has on its labour productivity growth. This analysis is mainly a consequence of two considerations. The first one results from a clear differentiation of the role that product and process innovations have on a firm's performance. The second one is to assume that the knowledge capital of a firm is mainly composed by its successful research. The study demonstrates that process innovation has a positive and significant effect on firm's productivity growth. Moreover, this result is robust under a wide range of alternative specifications and, in any case, the variable behaves much better than R&D intensity. Following previous research, the detected quadratic relationship between vertical product differentiation and process innovation performance leads to the existence of some firms for which there exist a trade–off between quality and productivity.     

JOB FLOWS AND UNEMPLOYMENT IN AN EQUILIBRIUM UNEMPLOYMENT MODEL WITH FIRM‐SPECIFIC SKILL TRAINING*

We introduce productivity enhancing firm‐specific skill training into the labour search model in which the firm‐specific skill training intensity and the job destruction rate are endogenously determined. It is shown that the higher the intensity of such training, the lower the rates of unemployment, job creation and job destruction. The paper's model provides a theoretical framework to understand the often mentioned peculiarity of the Japanese labour market; prevalently low rates of unemployment, job creation and job destruction in Japan are due to its training system which promotes workers to acquire firm‐specific skills.