Salvador Allende's development policy: Lessons after 50 years

Last year, 2020, was the 50th anniversary of the opening of the ‘Chilean road to socialism’ by Salvador Allende. Although the Allende government is the political reference for the 'socialism of the 21st century’ in Latin America, international supporters tend to disregard the primary cause of its downfall, focusing instead on the circumstances of Allende's death. This article explains the link between the Allende government's development policies and its macroeconomic outcomes between 1970 and 1973. It finds that Chile's economic collapse had an endogenous cause related to government policies. This supports the views of Mises and Hayek on the feasibility of socialist economic policies. Policymakers and commentators should recognise essential lessons from the Chilean experience to learn from past errors and effectively promote Latin America's economic development.     

克服我国房地产业的市场失灵和调控失灵

基于我国城镇土地国有的基本国情,本文从马克思政治经济学视角,围绕目前我国房价过高的问题进行了讨论。依据马克思、恩格斯关于地租的本质、地价对房价重大影响、土地不是普通商品、实行土地国有制等论述及所进行的讨论,本文提出应加强对国有土地公共性质的认识,改变用过度市场化的方法去配置国有土地资源,保护公民的基本土地使用权,完善我国普遍住房保障以及进一步强化发展为人民的执政理念等建议。     

Friedman Versus Hayek on Private Outside Monies: New Evidence for the Debate

Friedrich Hayek is often credited with the resurgence of interest in alternative monetary systems. His own proposal, however, received sharp criticism from Milton Friedman, Stanley Fischer, and others at the outset, and never gained much support among academic economists or the wider population. According to Friedman, Hayek erred in believing that the mere admission of competing private currencies will spontaneously generate a more stable monetary system. In Friedman's view, network effects and switching costs discourage alternative systems in general from emerging and prevent Hayek's system in particular from functioning as desired. I offer new evidence provided by events in Somalia since the 1990s as support for Friedman's initial doubts.     

Economic planning and information

Conclusions The central arguments for national planning put forward during the early part of this century were decisively refuted by Mises and Hayek during the 1920s and 30s (see Hayek, 1948). General equilibrium theory of the 1960s provides no more adequate justification for the version of indicative planning proposed in this article. It is disappointing to see that no account has been taken of the important recent developments in economic theory and analysis which provide a more realistic basis on which to compare the private market and government agencies.There is no doubt that the country's future growth and development depend upon identifying more profitable investiment opportunities in the British economy (p. 140). There is equally no doubt that an infinite number of such opportunities exist. But how to identify them? Regrettably, Paul Hare does not tell us.     

Iterated weak dominance and subgame dominance

In this paper, we consider finite normal form games satisfying transference of decisionmaker indifference. We show that any set of strategies surviving k rounds of elimination of some weakly dominated strategies can be reduced to a set of strategies equivalent to the set of strategies surviving k rounds of elimination of all weakly dominated strategies in every round by (at most k) further rounds of elimination of weakly dominated strategies. The result develops work by Gretlein [Gretlein, R., 1983. Dominance elimination procedures on finite alternative games. International Journal of Game Theory 12, 107–113]. We then consider applications and demonstrate how we may obtain a unified approach to the work by Gretlein and recent results by Ewerhart [Ewerhart, C., 2002. Iterated weak dominance in strictly competitive games of perfect information. Journal of Economic Theory 107, 474-482] and Marx and Swinkels [Marx, L.M., Swinkels, J.M., 1997. Order independence for iterated weak dominance. Games and Economic Behavior 18, 219-245].     

The Great Recession and Marx's Crisis Theory

To help understand why the Great Recession occurred, this article focuses on its underlying causes and employs Karl Marx's theory of capitalist economic crisis. It shows that U.S. corporations' rate of return on fixed asset investment fell throughout the half‐century preceding the recession, and that this fall accounts for the entire decline in their rate of capital accumulation (productive investment). The investment slowdown led to a decline in the rate of economic growth, which was a main cause of rising debt burdens, as were stimulative fiscal and monetary policies that delayed but exacerbated the effects of the underlying economic problems. The article also refutes the claim that the rate of profit could not really have fallen because massive redistribution of income from wages to profits took place, and it argues that it is unlikely that major crises of capitalism can be eliminated.     

EUROPE AND CHINA: THE FATAL CONCEIT1

China's recent economic growth has been driven by an apparent acceptance by the Chinese government of many of the key insights of Hayek's economic and social thought. Current Chinese economic policies stand in stark contrast to those being pursued by the EU and many European countries, where interventionist policies of the kind Hayek predicted would lead to relative impoverishment and declining freedom are being pursued. The long‐term consequence of these two trends is likely to be the economic dominance of China over Europe in the present century.     

CONTRACTS,ENTREPRENEURS, MARKET CREATION AND JUDGEMENT: THE CONTEMPORARY MAINSTREAM THEORY OF THE FIRM IN PERSPECTIVE

This survey gives an overview of the theory of the firm as it is formulated within the contemporary ‘mainstream’ of economics. Two groupings of theories are briefly discussed: principal–agent and incomplete contract models. Next, three of the most recent contributions regarding firms are considered. The reference point approach is looked at first followed by a discussion of Spulber's book The Theory of the Firm. Last, we consider the entrepreneurial judgement perspective.     

LIBERTY BETWEEN THE LINES IN A STATIST AND MODERNIST AGE: UNFOLDING THE ADAM SMITH IN FRIEDRICH HAYEK

This article interprets F. A. Hayek as having been constrained by the statism and modernism of his times, and as writing in a way that obscured some of his central ideas. I suggest that between the lines we can see a focus on liberty understood hardily as others not messing with one's stuff– even though Hayek in The Constitution of Liberty defined liberty in ways that tended to obscure this hardy definition, and Hayek often used code words like ‘competition,’‘the market,’ and ‘spontaneous’ where ‘liberty’ or ‘freedom’ would have been plainer, albeit more offensive to the culture. Seeing the hardy definition of liberty between the lines in Hayek enables us to see his focus on the liberty principle and his case for a presumption of liberty. Such a reading of Hayek, I suggest, is true to Adam Smith, who expounded a central message that by and large the liberty principle holds, and that it deserves the presumption in our culture and politics.     

Austrian Policy for the Thatcher Government

'Austrian' economics – an approach developed by a succession of Austrian economists, Menger, Wieser, Böhm-Bawerk, Mises and now the latest and greatest, F. A. Hayek – whose influence is reflected in this New Statesman cartoon – has developed new adherents among younger economists in America, Britain and around the world. Here Alex Shand outlines the main elements of government policy as they could be if based on 'Austrian' economics.     

The Division of Labour,Capitalism and Socialism: An Alternative to Sayer

Sayer (1995) has argued that the division of labour has a structure that is distinct from capitalist relations of production, and, following Hayek, that it is determined most strongly by the use of knowledge by enterprises. Conscious coordination or alteration of the division of labour therefore usually result in reduced efficiency and in an authoritarian suppression of difference. In this article we argue that the division of labour in capitalism is strongly determined by conflict within and between classes, and that in the short term socialist policy can and should aim to alter it. A model of socialist economic coordination is presented which is feasible and ameliorates many of the problems of the capitalist division of labour. This model would enable the development rather than suppression of positive differences.     

Schumpeter's Challenge to Economists: History,Theory, and Statistics as Key Competencies and Sociology as a Vision for the Future

Schumpeter wrote that a “scientific” economist is competent in three “techniques”: economic theory, economic history, and statistics. In addition, he mentions economic sociology. The current interpretation is that theory, history, and statistics refer to aspects of research that can emerge in any field of science. Their content and relations can be clarified with Mach's writings. Economic sociology is not a technique within economics, but a part of general sociology. The rationale of economic and general sociology becomes clear by considering Schumpeter's interpretations of Marx's ideas. Schumpeter's ultimate ambition may have been a grand theory following Marx's vision.     

Toward an Integrated Theory of Social Stratification

In the discipline of sociology, Marx, Durkheim, and Weber represent “classical” approaches to the study of stratification, from one or another of which most modern theory derives. In economics, Veblen's Theory of the Leisure Class represents an under‐utilized alternative to Marxian class analysis. The argument advanced in this article is that a close reading of the introductory chapter to Veblen's Theory of the Leisure Class provides a useful framework for productive integration of the diverse traditions of stratification theory and class analysis descending in sociological thought from Marx, Durkheim, and Weber.     

The effects of U.S. monetary policy on Colombia and Panama (2002–2007)

I study the economies of Colombia (floating exchange rate) and Panama (dollarized) to illustrate how the monetary policy of a large economy can export capital structure distortions to small open economies that follow different exchange rate regimes. The paper contributes to the literature on international business cycles in two ways. First, it adds to recent research that extends the Mises–Hayek business cycle theory to an international context. Second, most current research abstracts from effects on the production structures of emerging market economies when analyzing the transmission of monetary policy shocks. This paper seeks to fill this gap by studying structural effects of U.S. monetary policy on the economies of Colombia (floating exchange rate) and Panama (dollarized).     

Individualism and Institutionalism Revisited: A Response to Professor Bush

A bstract . In the book which provoked individualist/institutionalist controversy in several journals, including this one, the author emphasized aspects of "muddled" thinking in the work of Clarence E. Ayres which he believes has brought forth neo-institutionalist contributions that are a "hodge-podge." Neo-institutionalism, he is convinced, is a form of historicism in Karl R. Popper's terms. Lord Robbins is quoted to prove that individualists do not necessarily espouse laissez-faire capitalism and extreme income inequality. F. A. Hayek is a conservative but some individualists are socialists. The distinction on which individualists base interpersonal comparisons of utility is not between normative and positive but between science and philosophy; Thorstein Veblen never attempted to build a bridge between science and value. The real issue between individualists and neo-institutionalists is individualism vs. collectivism.     

Experience of Audit Committee Members and Audit Quality

Abstract

We investigate whether the experience of audit committee members is associated with audit quality. In order to comprehensively analyse the experience of audit committee members, we include audit committee member tenure, age and multiple-directorships in our analysis. Using observations from 2001 to 2012, we undertake analysis on 13,155 firm-year observations and find that all our proxies of audit committee member experience are positively associated with audit fees. A range of additional tests, including using discretionary accruals as an alternative measure of audit quality and differences-in-differences analysis, support our main findings and our results consequently make a number of contributions to both the literature and policy making. One possible policy contribution is that regulators may wish to consider audit committee characteristics representing experience when framing recommendations to improve audit quality and thereby, financial reporting by firms.     

Alfred Kahler's Die Theorie der Arbeiterfreisetzung durch die Maschine : An Early Contribution to the Analysis of the Impact of Automation on Workers

This paper provides a critical assessment of Alfred Kahler's pioneering contribution to the analysis of the impact of automation on workers in his 1932 dissertation thesis Die Theorie der Arbeiterfreisetzung durch die Maschine (The theory of the displacement of the worker by the machine). Kahler's analysis is shown to be an elaboration on Ricardo's and Marx's approach to the analysis of the labour displacement and compensation process. It is also shown that the arithmetical 'circulation schemes' developed by Kahler can be interpreted as an early formulation of a closed (static) input-output model. In addition, the paper also examines Kahler's rudimentary discussion of the associated price model and of the choice of technique problem.     

What Marx Means Today

Marx made significant contributions to macroeconomics, laying the grounds for both Keynes's theory of aggregate demand and Schumpeter's theory of creative destruction. His law of the tendency of the rate of profit to fall parallels Alvin Hansen's theory of secular stagnation which has recently received much attention among scholars studying the financial crises in Japan, the US and the Eurozone. This article argues that part of the new stagnation does not result from a natural exhaustion of investment possibilities, but from an overly loose central bank monetary policy that keeps zombie banks and their zombie clients alive and blocks the emergence of new start‐up firms.     

Employees' entrepreneurial contributions to firms in Russia, 1995–2004

This article examines how employee self‐reported entrepreneurial contributions evolved in firms operating in Russia in 1995–2004 and whether changes can be explained by Akerlof's theory of implicit gift exchange in labour contracts. We find that these contributions were indeed influenced by wage premia and shifting work norms, declining by about a half during the period and with a particularly marked fall in contributions by manual workers. The trend was found among foreign‐owned, private Russian‐owned and state‐owned companies. Akerlof's model therefore helps explain Russian workers' changing behaviour.