social relations and macro-economic phenomena

From: Ian Wright (ian_paul_wright@HOTMAIL.COM)
Date: Thu Jan 08 2004 - 13:31:02 EST

Hello Michael,

>... how can you say that the functional forms that are describing income
>distribution are not the result of class struggle?

In a nutshell, because it is possible to explain them without reference to
the class struggle. However, it is possible that the class struggle is part
of the story, and I do not have a definitive point of view on the relation
of the class struggle to many of these empirical forms. To do so would
require elaborating on what things are counted as examples of class
struggle. But consistent with my methodological prejudice I have tried to
determine just how much can be explained with minimal assumptions that make
no reference to the class struggle or other subjective factors. The answer
turns out to be "quite a lot". It's a long argument, but in summary I've
developed a model of the wage-capital relation that explains a broad range
of macro-phenomena. I hope this may be of interest. My view is that the
social relations of production are highly explanatory to an extent perhaps
not fully realised, and that many of the striking phenomena of capitalism
are the result of abstract, structural features of the social organisation
of production. Here is a link to a recent paper that contains the argument.
The wage (more precisely the wage interval) is an exogenous parameter to the
model, which is why I remain open-minded on this issue.

The abstract is appended.



The social architecture of capitalism

A dynamic model of the social relations between workers and capitalists is
introduced. The model is deduced from the assumption that the law of value
is an organising principle of modern economies. The model self-organises
into a dynamic equilibrium with statistical properties that are in close
qualitative and in many cases quantitative agreement with a broad range of
known empirical distributions of developed capitalism, including the
power-law distribution of firm size, the Laplace distribution of firm and
GDP growth, the lognormal distribution of firm demises, the exponential
distribution of the duration of recessions, the lognormal-Pareto
distribution of income, and the gamma-like distribution of the
rate-of-profit of firms. Normally these distributions are studied in
isolation, but this model unifies and connects them within a single causal
framework. In addition, the model generates business cycle phenomena,
including fluctuating wage and profit shares in national income about values
consistent with empirical studies. A testable consequence of the model is a
conjecture that the rate-of-profit distribution is consistent with a
parameter-mix of a ratio of normal variates with means and variances that
depend on a firm size parameter that is distributed according to a

Tired of spam? Get advanced junk mail protection with MSN 8.

This archive was generated by hypermail 2.1.5 : Sat Jan 24 2004 - 00:00:02 EST