Sunday, October 24, 2021

Comments on Profit and Capital — J. Barkley Rosser

It's complicated. Barkley Rosser unpacks it.

Comments on Profit and Capital
J. Barkley Rosser | Professor of Economics and Business Administration James Madison University

1 comment:

Ahmed Fares said...

Interesting that he mentions Bohm-Bawerk.

Also included was a critique of Marx's exploitation theory. Böhm-Bawerk argued that capitalists do not exploit workers; they accommodate workers – by providing them with income well in advance of the revenue from the output they helped to produce.

It's been a while since I read Bohm-Bawerk but I'm going to look up his arguments again when I have some time because it deals directly with Marx's exploitation theory.

As an aside, I hew more to the idea of Keynes liquidity preference theory as opposed to time preference theory. As we've seen recently, people will save even if you give them zero or negative interest rates. This is important because it explains why capital has a return above depreciation, which is what Bohm-Bawerk was dealing with in coming up with his "roundabout" theory of production. He left money out of his analysis, treating money as a veil over barter because it would have made his analysis too complicated. As both Marx and Keynes noted, we live in a monetary economy. Once you include money, you don't need the "roundabout" theory.