Using Micro Data to Test the Divergence between Prices and Labour Values

An extremely robust finding in Marxian empirical economics is the 'Shaikh result' that estimates of labour values are closely correlated with prices. This result is established using input-output data together with a standard procedure in which variations in money wages are assumed to reflect labour quality. Two problems with this standard procedure can be identified. First, there is no translation between money units of wages and labour value units of output produced by different types of heterogeneous labour. Second, the standard procedure assumes perfectly competitive labour markets. In this paper, a new micro procedure for estimating labour values is developed in which both of these problems are addressed. To translate between money wage rates and the labour value of outputs a practical starting point for empirical analysis is suggested using some of the readily available tools of neoclassical economics. The assumption of perfect competition is accordingly relaxed by estimating a microeconometric wage equation using data from the UK Family Expenditure Survey. Conjoining this micro data with input-output data, estimates of labour values are used to test the Shaikh result, which is found not to hold in this particular exercise; with labour values diverging substantially from money prices.     

Archetyping relationships with companion animals to understand disaster risk-taking propensity

Pets factor into the daily decision-making of many people. Importantly, various characteristics of these human–animal relationships are known to strongly influence pet owners’ risk behaviour and, consequently, their animals’ welfare during disasters. Yet, few studies have examined a range of such characteristics concurrently in order to describe risk propensity differences in these relationships. In this study, 437 Australian companion-animal (pet) owners reported human–animal relational, personality and attitudinal characteristics, to examine differences in stated tendency to act to secure their pet’s welfare whilst risking potential harm in a hypothetical disaster dilemma. Cluster analysis identified five archetypal profiles differing in relational, personality, attitude and risk-propensity characteristics, as well as in stated willingness to risk personal safety for the well-being of a pet. Results suggest that relational archetypes are an effective means of examining pet–owner risk propensity, to better understand owners’ risk-taking to protect their animals from harm during a disaster.     

The ‘Earth summit’ and environmental economics: The case of the missing link

While environmentalists insist that economic planning by government should pay much greater attention to the environment, they have tended to ignore environmental economics. This lapse is all the more serious because the conventional economic remedy for environmental degradation is the ‘market solution’. This article reviews the orthodox microeconomic analysis of environmental problems, assesses the shortcomings of the market solution and, in the light of this, outlines the alternative strategy for sustainable development. Some concluding comments are offered on the chances of success in implementing sustainable development in South Africa.     

Comparing pension systems in the circular flow of income

The neoliberal consensus is that state funded pensions are not sustainable in the long term, due to declining fertility and longevity. In response, policymakers have pointed to the advantages of privately funded pension systems. This article compares the social provisioning of these two systems using the circular flow of income as an organizing framework. A series of pitfalls in the private model are examined, including inequality of provision, mis-selling of investment products, and punitive charges.     

Pasinetti,Keynes and the multiplier

This paper explores the relationship between the Keynesian multiplier and Pasinetti's model of pure production. Key assumptions of Pasinetti's model are its multisectoral structure, the definition of all income as a reward to labouring activities and, as a consequence, the operation of a pure labour theory of value. A translation between these models is effected by introducing investment as an exogenous determinant. By drawing from Keynes to apply his concept of the wage unit, it is possible to aggregate from Pasinetti's multisectoral model to a genuinely macroeconomic multiplier. This provides a way of using the scalar Keynesian multiplier without making the restrictive one-commodity assumption. In addition, this formal demonstration enhances our understanding of the relationship between the wage unit and the labour theory of value. Finally, critics have argued that Pasinetti downgrades the importance of institutional analysis; in contrast, the derivation of a scalar Keynesian multiplier contributes to an understanding of how relevant Pasinetti's approach is to the analysis of a monetary production economy.     

Towards a sustainable energy strategy for South Africa: Landfill gas as a renewable energy option

Insufficient attention has been paid to the energy problems faced by oil‐importing developing countries (OIDCs). For these countries, the solution lies not so much in following the energy development paths of their more developed neighbours, but rather in seeking to make more efficient use of non‐conventional energy sources. This article explores one such non‐conventional energy option ‐ landfill gas ‐for South Africa, where the energy problem is complicated by a heavy reliance on coal‐fired electricity, which is unsustainable and unfriendly to the environment and yet remains the focal point of the government's energy strategy as expressed in the Reconstruction and Development Programme.     

Deriving the Engel Curve: Pierre Bourdieu and the Social Critique of Maslow's Hierarchy of Needs

In Post Keynesian Economics, theorists have sought an alternative to neoclassical choice theory by turning to Maslow's hierarchy of needs (Pasinetti 1981 Pasinetti LL 1981 Structural Change and Economic Growth Cambridge: Cambridge University Press  , Lavoie 1992 Lavoie M 1992 Foundations of Post-Keynesian Economic Analysis London: Edward Elgar  ). Instead of each individual surveying a complete choice set, individuals prioritize (basic) physiological needs, moving with increasing incomes to satisfy safety and social needs, through to the higher needs associated with self-actualization. This framework provides a theoretical foundation for the Engel curve, since as incomes increase consumers become satiated when particular needs are satisfied. As an alternative to the neoclassical preoccupation with prices and substitution, a Post Keynesian theory of consumption has been formulated with income effects as the cornerstone. The main problem with Maslow's approach is that individual needs are innate, so that questions of social interaction and culture are seriously downgraded. In this article, the social theory of Pierre Bourdieu is offered as an alternative to the Maslow approach, providing the basis for a social critique of consumerism and an alternative evolutionary theory of consumption. In this approach, the structure of the social hierarchy both constrains the consumption of lower social strata and leads to subtle, less conspicuous consumption patterns at the top of the social hierarchy: a scenario that could provide a social foundation to the Engel curve.     

The distribution of ncome in the UK and OECD countries in the twentieth century

Distributional changes are an important part of the economichistory of the OECD countries over the twentieth century. Inthe UK, income inequality in the 1970s was substantially lowerthan 40 years earlier, and is now much higher than in 1979.The pattern of change in the USA has similarities to that inthe UK, but other countries have exhibited significant differences.In order to explain diversity of experience over time, and differencesin income inequality across countries today, we need to recognizethat the distribution of income is subject to a variety of forces,affecting earnings, wealth, and income. These forces includethe policy choices made by governments affecting market incomesand fiscal redistribution. What we need to explain is why insome periods a number of these forces combine to produce episodesof rising, or falling, inequality. Any single theory, such asthat based on a global shift of demand away from unskilled workers,cannot provide a fully adequate explanation.     

Using a Demand System to Estimate Extended Input–Output Multipliers

The interface between household income and expenditure has always been considered to be a key component in the construction of input–output models. However, it can be argued that households are too often treated as if they were just another in dustry in the input–output table. In this paper, we seek to address this problem by developing a new modelling framework in which a micro demand system is used to estim ate the relationship between income and expenditure. This demand system is conjoined with an input–output table for the UK economy, and the system as a whole is solved as a computable general equilibrium model. Comparisons are made between the Jacobian multipliers generated by this model and those derived from a more traditional input–output model in which the income-expenditure linkage is estimated using static coefficients.