The case for government investment

Few would dispute the case that carefully chosen investment projects funded or at least promoted by the state are essential to sustained economic development. In particular, roads, railways and other infrastructure need replacement or maintenance over time, and these help to support economic growth by the private sector: they are the lifeblood of the economy. Continue reading

Marx’s labour theory of value and exploitation under capitalism

The Cambridge economist Joan Robinson famously said that “the only thing worse than being exploited under capitalism is not being exploited under capitalism.” By this she meant that exploitation was something to be deplored, but that it made possible the material advance of humanity that has taken place under the capitalist system. Continue reading

Sustained growth and Marx’s contradiction

One of the many contradictions explored by Marx in his major work, Capital, was that between what he called ‘the production of surplus value’ and ‘the realization of surplus value’. Surplus value, in Marx’s schema, is produced through the exploitation of labour forcing the labourer to work longer than necessary for his own survival and to produce value greater than that which he receives in wages. Continue reading

Abenomics and a possible escape from Japan’s long stagnation

The Japanese economy has been largely stagnant since the bursting of an asset-price bubble in the early 1990s. ‘Abenomics‘ represents the current Prime Minister Shinzo Abe‘s attempt to restore prosperity to his country and is arguably more ambitious than anything tried since the bubble burst. Continue reading

Tax and the false dichotomy between private and public

I was reminded in a useful piece by Will Hutton in Sunday’s Observer newspaper of the way private income in a capitalist economy is underpinned in part by public action, much of it funded by taxation. The UK Prime Minister, David Cameron, recently claimed that “every single pound of public money started as private earning.” Continue reading

Beliefs, values and the choice of theoretical outcomes

I often wonder what leads economists and other social scientists more broadly, to choose which set of theories or paradigm to follow, and to invest their thinking and research time in. For example, how does a Marxist become a Marxist, or a Keynesian a Keynesian? Continue reading

Redistribution, growth and political stability

An argument often heard on the right of the political spectrum is that taxation is a ‘burden’ on economic activity and should be reduced as far as possible to promote economic growth. It is generally recognised that taxing a particular activity will discourage that activity. Continue reading