Posts Tagged ‘mainstream’

General views of Seattle-based grafitti artists Jonathan Matas and Zach Rockstad's mural called "Up and Down" depicting Karl Marx and Adam Smith located on Mott Street just north of Houston Street in

Mainstream economists refer to it as price theory, everyone else value theory. But whatever it’s called, it’s at the center of economists’ differing explanations of what happens in (and alongside) markets.

As I see it, price/value theory serves as the framework to explain a wide range of phenomena, from how and for how much commodities are exchanged in markets through the determinants of the distribution of incomes to the outcomes—for the economy and society as a whole—of the allocation of resources and commodities through markets.

And each price/value theory has a utopian dimension. It’s not just an accounting for and an explanation of the conditions and consequences of commodity exchange; it’s also a way of thinking about the fairness and justice of markets. It therefore informs (and is informed by) a utopian horizon within and beyond markets.

Let me explain. Mainstream economists today generally rely on a price theory that has been produced, disseminated, and revised by neoclassical economists in a tradition that dates from the late-nineteenth century. Students know it as what they learn in the typical microeconomics course, the rest of us by the celebration of free markets in mainstream theory and policy.*

market

The starting point of neoclassical value theory is that commodities exchange on markets at a price (p*) that is determined by supply and demand.** But that’s only the beginning. According to neoclassical economists, supply and demand are ultimately determined by human nature—a combination of tastes and preferences (utility), know-how (technology), and resources (factor endowments)—which are taken as given or exogenous.

And that leads to one of the major conclusions of neoclassical theory: the prices of goods and services, as well as the distribution of income, are ultimately determined by—and therefore reflect—human nature. That’s important because, if for whatever reason you don’t like the existing set of prices of commodities or the distribution of income, you face the formidable task of changing human nature.

Other significant conclusions also follow from neoclassical price theory, including:

  • Everyone gets what they pay for (since price is equal to the ratio of marginal utilities).
  • Everyone is equal (since, via the invisible hand, everyone’s marginal rate of substitution is equal to that of everyone else).
  • Everyone benefits from markets (since utility-maximation and profit-maximization lead to Pareto efficiency, i.e., a situation in which no one can be made better off without making someone worse off).

That’s an extraordinary set of conclusions—about commodities, markets, and capitalism—which is why, as I explain to my students, so much theoretical work has to be done to go from the initial assumptions to the final results.

That set of conclusions is the basis of the utopianism of neoclassical price theory.  According to neoclassical economists, the capitalist distribution of income is fundamentally fair. If every factor of production (e.g., capital and labor) is remunerated according to its marginal contribution to production, and each individual sells to firms the amount of each factor they desire (because of utility-maximization), the resulting distribution represents “just deserts.” It’s fair on an individual level and it represents justice for society as a whole. Let free markets operate, without any external intervention (e.g., by the state), and the result will be both fair and just.

It’s that powerful conclusion that serves as the starting point for value theory, the critique of the core of mainstream economics—with, of course, very different results.

Take the case of Marxian value theory. Marxian economists accept the notions of fairness and justice, a standard upheld by mainstream economists, and then shows that commodities and markets can’t but fail to achieve those goals. They do this, first, by showing that every commodity has two numbers attached to it—exchange-value and value—not just the one—price—and showing how those two numbers are equal only under a very particular set of assumptions. Then, second, they demonstrate that, even if the two numbers are equal (such that the form of value in exchange equals the value of commodities in production), the production of commodities is based on a “social theft,” that is, the exploitation of workers.

Here’s the idea: assume that all commodities exchange at their values (that is, the kind of world—of free markets, private property, perfect information, and so on—presumed by mainstream economists). Labor power, too, is allowed to be bought and sold at its value. But after the value of labor power is realized in exchange and is set to work, more value is extracted than it costs employers to purchase it. In other words, an extra value—a surplus-value—is created by laborers (during the course of production) and appropriated by capitalists (and then realized, when the finished commodities are sold, in exchange).

My view is that the critique of capitalist class exploitation forms the utopian horizon of Marxian value theory. Since exploitation violates the social norms of fairness and justice (of “just deserts,” i.e., that everyone within capitalism gets what they deserve), it points in a quite different direction: the possibility of creating the economic and social conditions whereby exploitation is eliminated.

The differences between neoclassical price theory and Marxian value theory couldn’t be more stark. The differences are even more dramatic when we compare their utopian horizons. Whereas neoclassical price theory leads to a utopian celebration of capitalist markets, Marxian value theory both informs and is informed by a utopian critique of capitalist exploitation—and therefore a movement beyond capitalism.

In both cases—neoclassical price and Marxian value theory—the story about commodity exchange, and therefore the analysis of the form that wealth takes under capitalism, has a utopian dimension. The two theories have that in common. Where they differ is the form that utopian dimension takes. Neoclassical price theory is guided by a utopianism according to which free markets and private property represent the best possible way of organizing an economy—and therefore should be created and defended by any means necessary. Marxian value theory, as I interpret it, serves as a critique of all such utopianisms. It marks their failure, on their own terms, and points in a different direction—toward the possibility (but certainly not the necessity) of eliminating the exploitation that serves as the basis of capitalist wealth, and therefore of creating a different standard of fairness and justice.

As is well known, for generations of Marxian economists that utopian horizon has been summarized as “from each according to their ability, to each according to their needs.”

 

*To be clear, modern neoclassical price theory extends some important aspects of the theory originally elaborated by Adam Smith—such as the focus on individuals and the general praise for free markets—but it also represents a fundamental break from Smith’s theory—especially from the classical labor theory of value Smith and other classical economists (such as David Ricardo) utilized.

**It’s actually a pretty complicated set of steps, which most students are never taught. The key is that p*, the equilibrium price, is determined not just by supply and demand, but by the imposition of a third condition—a market-clearing equation—such that the quantity supplied is arbitrarily assumed to be equal to the quantity demanded.

 

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John Baldessari, “Man Running/Men Carrying Box” (1988-1990)

It was Paul Samuelson who, in 1997, declared with morbid optimism that “Funeral by funeral, economics does make progress.”*

What Samuelson presumed is that, over time, wrong ideas would be killed and laid to rest and better ideas would flourish, thus creating the foundation for progress in economic thought.

That’s what I consider to be the epistemological utopianism of mainstream economic thought: using the correct scientific methods, the work that economists do gets closer and closer to the Truth—the singular, incontestable, capital-t truth. It used to be the case (for Samuelson and many others, such as fellow Nobel laureates Kenneth Arrow, Gerard Debreu, and Paul Krugman) that mathematical models represented the best way of making progress (inspired by a particular conception of nineteenth-century physics).** The current fad is to rely on randomized experiments and big data as evidence that economics is finally becoming a real, empirical science (akin to biology and medicine).

In the first case, rationalism is the reigning theory of knowledge; in the second case, it’s empiricism. However, both theories represent two sides of the same epistemological coin, defined by a radical separation between theory and reality and some sort of correspondence between them. In other words, both rationalism and empiricism are foundationalist theories of knowledge according to which the gap between theory and reality is eventually—”funeral by funeral”—closed.

It’s a utopianism that serves as both the premise and promise of mainstream economists’ practice. And we know something about the consequences of that epistemological utopianism—for example, the combination of ignorance and arrogance when it comes to the work of nonmainstream economists (who stand accused of not doing science and therefore of not contributing to the progress of economics), noneconomists (whose methods are neither mathematically nor empirically rigorous enough), and everyday economists (who either produce cultural representations that accord with the lessons of mainstream economics, in which case they be invoked as illustrations, or whose work is dismissed and needs to be attacked and eradicated, because it runs counter to mainstream economics). Not to mention the idea that, in the midst of the worst economic crises since the first Great Depression, mainstream economists could blithely assert that their theories had done just fine; the only problem was the fact that policymakers hadn’t adequately listened to or followed the advice of mainstream economists. Finally, of course, there’s the closing-off of publishing venues (like the leading journals), research funding (especially the National Science Foundation), teaching positions (especially in research universities), and so on—all in the name of a singular scientific method and conception of truth.

As I have shown (e.g., here and here), mainstream liberals today are also obsessed with the defense of science and capital-t Truth. In their zeal to attack Donald Trump and the right-wing media’s defense of his administration’s outlandish claims about a wide variety of issues—from climate change to the Mueller investigation—they increasingly invoke and rely on an absolutist theory of knowledge. And then, of course, claim for themselves the correct side in the current debates. They, too, are guided by the utopianism of essentialist theories of knowledge.

The problems with epistemological utopianism are legion. I’ve mentioned some of the nastier consequences above. But there are other issues. For example, in their defense of absolute truth, they invoke a time—before the current “post-truth” regime—when a set of institutions (such as journalism, science, and the academy) supposedly got it right. Except they can’t ever cite an example of how those institutions successfully adjudicated the facts in play—when, supposedly, there was universal assent to the truth claims, either within the academy or the wider society—and they ignore all the times when they simply got it wrong.

Moreover, they’re willing to admit that the claims to truth are often deflected by lots of other influences—such as narratives, confirmation bias, ethics, and information overload. But the problem is always “out there,” among regular people, and not the scientists themselves (whether in economics or other disciplines). Epistemological utopians simply can’t acknowledge that, in their daily practice, mainstream economists and liberal thinkers are also engaged in story-telling, that they accept evidence that confirms their preconceived notions and assess counter evidence with a critical eye, make ethics-laden decisions based on relations of unequal power, and operate with overconfidence based on the illusion of knowledge.

There are, of course, many alternatives to the utopianism of absolutist epistemology. One of them is what I call “partisan relativism,” associated with the Marxian critique of political economy.

In fact, I (with my friend and frequent coauthor Jack Amariglio) have just published an entry on “epistemology” in the Routledge Handbook of Marxian Economics. There, we discuss many different contributions to Marxian epistemology and highlight the role that postmodernism has played in providing an alternative to and moving beyond the long history of attributing to Marx a modernist project of attempting to delimit the certainly of scientific knowledge from non-science (or ideology). Thus, we write, postmodern Marxists

frequently call attention to the “relativism” that they believe is Marx’s main epistemological message and/or is exemplified in his texts. Marx’s aleatory materialism, for postmodern Marxists, also establishes an under-determination in the realm of knowledge; a discursive whole cannot close itself. Influenced by Jacques Derrida’s conception of “deconstruction,” postmodern Marxists insist that discourse is always marked by slippages, aporia, displacements, and deferments. For them, meaning is overdetermined and uncertain. A certain knower is thus a contradiction in terms.

In addition, if scientific discourse is not the mirror of nature, then there is an “ethical” dimension to all knowledge production. Cornel West, utilizing Richard Rorty among other “pragmatist” philosophers, brings out the enduring, constitutive ethical and political aspects of how and what we know, and what we intend to do with this knowledge.

Thus, we go on to explain, relativist Marxists dispute the claims of a certain knowing subject (indeed, they challenge the very idea that knowledge begins with a knowing subject) and focus instead on how knowledge claims are internal to theoretical frameworks and the manner in which knowledges produce within different theories or discourses have specific—and often quite different—conditions and consequences in the world within which those knowledges are produced.

Thus,

For many Marxist epistemologists, knowledge is active and actionable, and its existence as material image/image of the material is one requisite condition for the revolutionary socioeconomic—especially class—change that Marx vehemently proposed.

And that, in the end, is the utopian moment of Marxian epistemology—not a utopian appeal or aspiration to absolute truth, but instead a practice (one might even call it an ethics) of materialist critique. That critique operates at two different levels: it is a critique of all theoretical claims (such as those made by mainstream economists) that normalize or naturalize the existing economic and social order and a critique of capitalism itself, since from a Marxian perspective capitalist societies are based on and serve to reproduce an exploitative class structure.

It should come as no surprise then that the utopian horizon of Marxian epistemology is summarily rejected by mainstream economists and liberal thinkers—or that the latter’s epistemological utopianism often serves to locate itself within and ultimately to justify, by treating as normal or natural, the existing set of economic and social institutions.

 

*“Credo of a Lucky Textbook Author,” Journal of Economic Perspectives 11 (Spring): 159.

**It’s a particular conception of physics that has been disputed by many others, including Thomas Kuhn (and his theory of “scientific revolutions”), Paul Feyerabend (who argued that there are no useful and exceptionless methodological rules governing the progress of science or the growth of knowledge), Richard Rorty (who criticized the idea of knowledge as representation), and Michel Foucault (who showed that different systems of thought and knowledge—epistemes or discursive formations, in Foucault’s terminology—are governed by different sets of rules). Their criticisms of essentialist epistemologies apply as well to the more recent turn to “empirical” methods as the foundation of economic knowledge.

health-freemarket

The dystopia of the American healthcare system certainly invites a utopian response—a ruthless criticism as well as a vision of an alternative.

As I showed last week, the left-wing response involves a critique of the conditions and consequences of the capitalist organization of U.S. healthcare and the fashioning of a radical alternative. Single-payer, which uses tax revenues to finance the purchase of adequate healthcare services for everyone, is one possibility. On top of that, it is necessary to expand the diversity of healthcare providers, which would include more democratic, cooperative or worker-owned healthcare enterprises.

That’s how activists, educators, and policymakers informed by heterodox economics can begin to rethink the U.S. healthcare system. What about mainstream economics?

Given the persistent attacks on and attempts to replace Obamacare by Republican legislators—against a “government takeover” of healthcare in the name of “free markets”—one would expect mainstream economists to provide a theoretical justification based on their usual utopianism—of an efficient allocation of scarce resources in an economy characterized by private property and individual decisions in unregulated markets.

However, as it turns out, they can’t. And that’s all because of Kenneth Arrow.

Consider, for example, the 2017 New York Times column by Greg Mankiw.

In Econ 101, students learn that market economies allocate scarce resources based on the forces of supply and demand. In most markets, producers decide how much to offer for sale as they try to maximize profit, and consumers decide how much to buy as they try to achieve the best standard of living they can. Prices adjust to bring supply and demand into balance. Things often work out well, with little role left for government. Hence, Adam Smith’s vaunted “invisible hand.”

Yet the magic of the free market sometimes fails us when it comes to health care.

Mankiw, who is known to celebrate free markets in everything, is forced to allow for an exception when it comes to healthcare. (Fellow mainstream economist John Cochrane, in a sharp riposte, argued that “For once, I think Greg got it wrong.”)

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The reason is because, back in 1963, future Nobel Laureate Arrow published “Uncertainty and the Welfare Economics of Medical Care.” Mankiw’s column (and the longer treatment for his textbook [pdf]) is basically a restatement of the issues raised by Arrow over a half century ago.

According to Arrow, healthcare is characterized by a set of “special features,” all of which stem from the “prevalence of uncertainty.” These include the following:

  • an irregular, unpredictable demand for medical care
  • an element of trust in the relationship between patient and provider
  • considerable uncertainty as to the quality of the healthcare provided as well as asymmetry of knowledge concerning that quality
  • a restricted supply (e.g., because of licensing)
  • a combination of price discrimination (e.g., between the insured and uninsured) and price-fixing

In consequence, the healthcare industry cannot be expected to operate along the lines of, or to deliver the same results as, the canonical neoclassical model of perfect competition.

Thus, Arrow concludes,

It is the general social consensus, clearly, that the laissez-faire solution for medicine is intolerable. . .

The logic and limitations of ideal competitive behavior under uncertainty force us to recognize the incomplete description of reality supplied by the impersonal price system.

Neither Arrow nor Mankiw suggests what the alternative is. But it’s clear that, from the perspective of mainstream economics, healthcare cannot be shoehorned into the neoclassical model of perfect competition they use to analyze all other commodities and markets. What we can say is their theory of the economics of healthcare leaves open the possibility of considerable extra-market intervention and regulation.

Healthcare is where the utopianism of neoclassical economics fails.

But then we can ask, where does that utopianism not fail? Why should it hold any better when it comes to other capitalist commodities, such as labor power, money, and land? And, if it does not, then neither the modes of analysis nor the policy conclusions that are central to mainstream economics retain any validity.

In my opinion, that’s why the issue of utopia and healthcare is so important.

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Economic inequality is arguably the crucial issue facing contemporary capitalism—especially in the United States but also across the entire world economy.

Over the course of the last four decades, income inequality has soared in the United States, as the share of pre-tax national income captured by the top 1 percent (the red line in the chart above) has risen from 10.4 percent in 1976 to 20.2 percent in 2014. For the world economy as a whole, the top 1-percent share (the green line), which was already 15.6 percent in 1982, has continued to rise, reaching 20.4 percent in 2016. Even in countries with less inequality—such as France, Germany, China, and the United Kingdom—the top 1-percent share has been rising in recent decades.

Clearly, many people are worried about the obscene levels of inequality in the world today.

In a famous study, which I wrote about back in 2010, Dan Ariely and Michael I. Norton showed that Americans both underestimate the current level of inequality in the United States and prefer a much more equal distribution than currently exists.*

In other words, the amount of inequality favored by Americans—their ideal or utopian horizon—hovers somewhere between the level of inequality that obtains in modern-day Sweden and perfect equality.

What about contemporary economists? What is their utopian horizon when it comes to the distribution of income?

Not surprisingly, economists are fundamentally divided. They hold radically different views about the distribution of income, which both inform and informed by their different utopian visions.

For example, neoclassical economists, the predominant group in U.S. colleges and universities, analyze the distribution of income in terms of marginal productivity theory. Within their framework of analysis, each factor of production (labor, capital, and land) receives a portion of total output in the form of income (wages, profits, or rent) within perfectly competitive markets according to its marginal contributions to production. In this sense, neoclassical economics represents a confirmation and celebration of capitalism’s “just deserts,” that is, everyone gets what they deserve.

From the perspective of neoclassical economics, inequality is simply not a problem, as long as each factor is rewarded according to its productivity. Since in the real world they see few if any exceptions to perfectly competitive markets, their view is that the distribution of income within contemporary capitalism corresponds to—or at least comes close to matching—their utopian horizon.

Other mainstream economists, especially those on the more liberal wing (such as Paul Krugman, Joseph Stiglitz, and Thomas Piketty), hold the exact same utopian horizon—of just deserts based on marginal productivity theory. However, in their view, the real world falls short, generating a distribution of income in recent years that is more unequal, and therefore less fair, than is predicted within neoclassical theory. So, bothered by the obscene levels of contemporary inequality, they look for exceptions to perfectly competitive markets.

Thus, for example, Stiglitz has focused on what he calls rent-seeking behavior—and therefore on the ways economic agents (such as those in the financial sector or CEOs) often rely on forms of power (political and/or economic) to secure more than their “just deserts.” Thus, for Stiglitz and others, the distribution of income is more unequal than it would be under perfect markets because some agents are able to capture rents that exceed their marginal contributions to production.** If such rents were eliminated—for example, by regulating markets—the distribution of income would match the utopian horizon of neoclassical economics.***

What about Marxian theory? It’s quite a bit different, in the sense that it relies on the assumptions similar to those of neoclassical theory while arriving at conclusions that are diametrically opposed. The implication is that, even if and when markets are perfect (in the way neoclassical economists assume and work to achieve), the capitalist distribution of income violates the idea of “just deserts.” That’s because Marxian economics is informed by a radically different utopian horizon.

Let me explain. Marx started with the presumption that all markets operate much in the way the classical political economists then (and neoclassical economists today) presume. He then showed that even when all commodities exchange at their values and workers receive the value of their labor power (that is, no cheating), capitalists are able to appropriate a surplus-value (that is, there is exploitation). No special modifications of the presumption of perfect markets need to be made. As long as capitalists are able, after the exchange of money for the commodity labor power has taken place, to extract labor from labor power during the course of commodity production, there will be an extra value, a surplus-value, that capitalists are able to appropriate for doing nothing.

The point is, the Marxian theory of the distribution of income identifies an unequal distribution of income that is endemic to capitalism—and thus a fundamental violation of the idea of “just deserts”—even if all markets operate according to the unrealistic assumptions of mainstream economists. And that intrinsically unequal distribution of income within capitalism becomes even more unequal once we consider all the ways the mainstream assumptions about markets are violated on a daily basis within the kinds of capitalism we witness today.

That’s because the Marxian critique of political economy is informed by a radically different utopian horizon: the elimination of exploitation. Marxian economists don’t presume that, under capitalism, the distribution of income will be equal. Nor do they promise that the kinds of noncapitalist economic and social institutions they seek to create will deliver a perfectly equal distribution of income. However, in focusing on class exploitation, they both show how the unequal distribution of income in the world today is affected by and in turn affects the appropriation and distribution of surplus-value and argue that the distribution of income would likely change—in the direction of greater equality—if the conditions of existence of exploitation were dismantled.

In my view, lurking behind the scenes of the contemporary debate over economic inequality is a raging battle between radically different utopian visions of the distribution of income.

 

*The Ariely and Norton research focused on wealth, not income, inequality. I suspect much the same would hold true if Americans were asked about their views concerning the actual and desired degree of inequality in the distribution of income.

**It is important to note that, according to mainstream economics, any economic agent can engage in rent-seeking behavior. In come cases it may be labor, in other cases capital or even land.

***More recently, some mainstream economists (such as Piketty) have started to look outside the economy, at the political sphere. They’ve long held the view that, within a democracy, if voters are dissatisfied with the distribution of income, they will support political candidates and parties that enact a redistribution of income. But that hasn’t been the case in recent decades—not in the United States, the United Kingdom, or France—and the question is why. Here, the utopian horizon concerning the economy is the neoclassical one, or marginal productivity theory, but they imagine a separate democratic politics is able to correct any imbalances generated by the economy. As I see it, this is consistent with the neoclassical tradition, in that neoclassical economists have long taken the distribution of factor endowments as a given, exogenous to the economy and therefore subject to political decisions.

Liberal mainstream economists all seem to be lip-synching Bobby McFerrin these days.

Worried about automation? Be happy, write Laura Tyson and Susan Lund, since “these marvelous new technologies promise higher productivity, greater efficiency, and more safety, flexibility, and convenience.”

Worried about the different positions in current debates about economic policy? Be happy, writes Justin Wolfers, and rely on the statistics produced by government agencies and financial firms and the opinions of mainstream economists.

Me, I remain worried and I have no reason to accept mainstream economists’ advice for being happy.

Sure, new forms of automation might lead to higher productivity and much else that Tyson and Lund find so alluring. But who’s going to benefit? If we go by the last few decades, large corporations and wealthy individuals are the ones who are going to capture most of the gains from the new technologies. Everyone else, as I have written, is going to be forced to have the freedom to either search for new jobs or deal with the fundamental transformation of the jobs they manage to keep.

When it comes to separating fact from fiction, aside from the embarrassing epistemological positions liberals rely on, where are the statistics that might help us make sense of what is going on out there—numbers like the Reserve Army of Unemployed, Underemployed, and Low-wage Workers or the rate of exploitation.

You want me not to worry? Analyze what’s going to happen to workers and the distribution of income as automation increases and calculate the kinds of economic numbers other theoretical traditions have produced.

Even better, let workers have a say in what and how new technologies are introduced and change economic institutions in order to eliminate the Reserve Army and class exploitation.

Then and only then will I be happy.

www.usnews

And the Republican Congress. . .

The premise and promise of the House and Senate versions of the Tax Cuts and Jobs Act are that lower corporate taxes will lead to increased investment and thus more jobs and higher wages for American workers.

Marx, it seems, would have endorsed the idea:

Accumulate, accumulate! That is Moses and the prophets! “Industry furnishes the material which saving accumulates.” Therefore, save, save, i.e., reconvert the greatest possible portion of surplus-value, or surplus-product into capital! Accumulation for accumulation’s sake, production for production’s sake: by this formula classical economy expressed the historical mission of the bourgeoisie, and did not for a single instant deceive itself over the birth-throes of wealth. But what avails lamentation in the face of historical necessity? If to classical economy, the proletarian is but a machine for the production of surplus-value; on the other hand, the capitalist is in its eyes only a machine for the conversion of this surplus-value into additional capital. Political Economy takes the historical function of the capitalist in bitter earnest.

Except for one thing (as Bruce Norton has explained): Marx never presumed capitalists would follow any kind of fixed rule, including using their surplus-value to accumulate capital. That’s only what the mainstream economists of his day—classical political economists like Adam Smith and David Ricardo—attributed to, or at least hoped from, capitalists. They’re the ones who thought capitalists had a “historical mission” of accumulating capital.

As I explained to students in class yesterday, you only get the accumulation of more capital out of corporate tax cuts if you assume everything else constant.

Consider, for example, the general law of capitalist accumulation:

K* = r – λ

where K* is the rate of capital accumulation (∆K/K), r is the rate of profit (surplus-value divided by the sum of constant and variable capital, s/[c+v]), and λ is the rate of all other distributions of surplus-value (including taxes to the state, CEO salaries, stock buybacks, dividends to stockholders, payments to money-lenders, and so on).

So, yes, if you hold everything else constant, corporate tax cuts, and thus a lower λ, will lead to a higher K*.

But that only works if everything else is held constant. If capitalists choose to use the tax cuts to increase CEO salaries, stock buybacks, and/or dividends to stockholders, then all bets are off. The Tax Cuts part of the act will not lead to the Jobs part of the act.

And even if capitalists do use some portion of the tax cuts to accumulate capital, that will only result in new jobs if technology is held constant. However, if they use it to invest in newer constant capital (e.g., automation and other labor-displacing technologies), then again we’ll see few if any new jobs.

And even if and when new jobs are created, the effect on workers’ wages will depend on the Reserve Army of Unemployed, Underemployed, and Low-Wage workers.

Clearly, there are lots of hidden steps and assumptions between slashing corporate taxes and more jobs.

That’s why Donald Trump and House and Senate Republicans have decided not to even attempt to justify the tax cuts but only to ram it through Congress in the shortest possible time.

They pretend they’re taking “the historical function of the capitalist in bitter earnest” but, in the end, they’re just attempting to line their benefactors’ pockets.

Last year, I was honored to deliver the 9th Annual Wheelright Memorial Lecture at the University of Sydney.

A couple of weeks ago, my longtime friend and collaborator Katherine Gibson presented the 2017 Wheelright Memorial Lecture, “Manufacturing the Future: Cultures of Production for the Anthropocene.”

her work has consistently challenged orthodox and heterodox economics’ primary focus upon the operation of ‘Big-C’ Capitalism. Instead, Gibson has crafted a unique methodological framework she terms ‘participatory action research’, which looks to the diversity of existing community economic arrangements by engaging directly with local subjects.

The method engages with local communities to shed light upon the idiosyncrasies and often non-commercial nature of local modes of provisioning. Rather than accepting the ‘tragedy of the commons’ – the notion of the inevitable degradation of commonly used land and resources – Gibson’s work has revealed the importance of the commons to many existing developmentally diverse communities. She thereby challenges the core tenet of orthodox economics, which prioritises the optimisation of the allocation of scarce resources through facilitating smoothly functioning markets.