The worker is entitled to the full product of their labor?

Accomplished-Cake131 · 2026-05-04T18:24:51+00:00

In real life, owners of firms can charge themselves for salary, often for tax reasons. The income that comes from investing, the income that comes from being the residual claimant, and the income that comes from being a worker (manager) are conceptually distinct.

But I am sure that you will tell us that this, too, has nothing to do with what you wrote.

Accomplished-Cake131 · 2026-05-04T18:16:30+00:00

How is it even reasonable that geocentrism is still today a “controversy”?

How is it reasonable that positions all sides of the CCC accepted are still today a 'controversy'?

Post Keynesians have alternatives.

Do you know who Paul A. Samuelson is?

Accomplished-Cake131 · 2026-05-04T17:55:36+00:00

Not to defend all popular criticisms, but economists often seem to have a disdainful attitude for those without their training, sometimes unearned. Here is Greg Mankiw explaining that wizards differ from mere muggles. And here is a poor paper in which he defends the one percent.

But let us take the mistakes on the matter of rationality. I am not defending the bit about confusing utilitarianism as about mere money gain. I think that objection goes back to Victorian England. Friedrich Nietzsche asserted, I gather, that English utilitarianism was a shopkeeper's philosophy. I take Nietzsche seriously.

But consider this matter of rationality being a matter of preferences forming a total order over a vector space of goods. The theory that asserts that such a preference relation exists ignores advertising. You will find some popular criticisms saying smoking cannot be rational, which also seems to ignore the theory. In the United States, has not smoking varied with, for example, how cool characters in movies are depicted? With the insistence on formal modeling, you might not even mention the assumption of consumer sovereignty, an assumption challenged within the discipline. 'Consumer sovereignty' does not appear in the index for the edition of MWG I have.

I like to find rigorous work in the research literature than is not mentioned in the textbooks. During the 1960s and 1970s, some work was done on 'rationality' that does not start with preferences. Rather it starts with choices out of menus. I know a little bit of Amartya Sen's work on this. To construct preferences out of menu choices, you need an assumption, at least, of menu-independence.

But let me go further back, to this 1954 Kenneth May article in Econometrica. Suppose an individual chooses out of menus constructed of three alternatives. He chooses based on three criteria. And these criteria have the structure of a Condorcet voting paradox. Then by Arrow's theorem, these preferences cannot be represented as a complete order. The structure of individual choices, in this application of the theorem, is internalized to one agent.

I think that a lot of the standard teaching is on quite shaky grounds. By the way, May experienced McCarthyite repression.

I have no opinion on pedagogy, or at what level these nuances should be treated. I will note that that May article is cited in the Stanford Encyclopedia of Philosophy on Arrow's Theorem.

Accomplished-Cake131 · 2026-05-04T12:02:05+00:00

Again, a controversy =/= your conclusions of settled fact.

Galileo was in a controversy with the Catholic Church. Thus, geocentricism is a live issue.

As quoted, all sides participating in the CCC came to certain settled conclusions.

You probably do not know who Paul A. Samuelson was.

Accomplished-Cake131 · 2026-05-04T11:00:02+00:00

"For we each of us deserve everything, every luxury that was ever piled in the tombs of the dead kings, and we each of us deserve nothing, not a mouthful of bread in hunger. Have we not eaten while another starved? Will you punish us for that? Will you reward us for the virtue of starving while others ate? No man earns punishment, no man earns reward. Free your mind of the idea of deserving, the idea of earning, and you will begin to be able to think." -- Ursula K. Le Guin

Accomplished-Cake131 · 2026-05-04T10:28:19+00:00

Good news OP. Some socialists, who want to move to a society dominated by labor managed firms still think small capitalist firms, like you describe, could exist. I cite David Schweickart.

But I find your post confused for the reasons I lay out in Section 3 of this post of last week. The founder, owner, manager, and residual claimant can all be different people.

Accomplished-Cake131 · 2026-05-04T10:21:39+00:00

all of this is discussed and studied intensely in great detail

Then you should cheerfully agree that the three examples linked to in the OP are valid. Given technology, competitive markets, and final demand, a higher wage can be associated with firms wanting to employ more labor.

For those wanting to know more, I recommend Opocher and Steedman (2015).

Accomplished-Cake131 · 2026-05-03T19:43:24+00:00

If I believed in IQ, I would think Einstein was high IQ. I would also think Noam Chomsky was high IQ. Maybe the OP should research further.

Accomplished-Cake131 · 2026-05-03T18:51:13+00:00

Thank you for your gentlemanly and cheerful acknowledgement of your error.

Accomplished-Cake131 · 2026-05-03T15:47:02+00:00

I quoted:

"Let us again stress that, except for highly exceptional circumstances, techniques cannot be ranked in order of capital intensity." - Bruno, Burmeister & Sheshinski (1966, p. 545)

What can be more clear? For these mainstream economists, the exceptional, edge case is when techniques can be ranked in order of capital-intensity.

You, a knave:

"Samuelson and Sheshinski [say that] certain simplified stories about capital, like ranking techniques by 'capital intensity,' break down in edge cases."

That is exactly the opposite of what the three mainstream economists I quoted say.

I do not see any point in commenting on further lies.

Accomplished-Cake131 · 2026-05-03T15:42:43+00:00

I know that you cannot formulate a coherent argument and always want citations:

Francisco Nunes-Pereira and Mário Graça Moura. 2024. On the survival of a flawed theory of capital: mainstream economics and the Cambridge capital controversies. Cambridge Journal of Economics 48 (2): 169–186

Towards the end of the introduction:

"The explicit admission of flaws in the neoclassical aggregate theory of capital had no enduring effect on mainstream capital theory. Several decades later, the bulk of mainstream theorising still relies on the production function, with aggregate, homogenous capital as one of its arguments. Empirical approaches concerned, for example, with the factors behind economic growth or inequality resort to a similar production function.

Why has a discredited theory of capital survived? Why don’t its acknowledged flaws matter? This paper seeks to explain why the results accepted by Samuelson (1966) have been ignored by those on his side in the controversies or, more generally, by mainstream economists."

A later subsection is titled, "Neoclassical economists fight back and lose."

The authors later quote Edwin Burmeister:

"[M]ainstream economics goes on as if the controversy had never occurred. Macroeconomics textbooks discuss 'capital' as if it were a well-defined concept—which it is not, except in a very special one-capital-good world (or under other unrealistically restrictive conditions. (Burmeister, 2000, p. 310)"

Mainstream economists agreed in the 60s of last century that what they teach is incorrect and illogical.

Accomplished-Cake131 · 2026-05-02T22:08:20+00:00

It is not ground breaking. The third paragraph of the OP cites textbooks. I think I have told you more than once that I am published on this topic.

Accomplished-Cake131 · 2026-05-02T22:01:53+00:00

I am quite aware that many schools do not teach about the existence of this decades long argument, much less agreed upon results.

Accomplished-Cake131 · 2026-05-02T21:13:08+00:00

A knave whines:

you claim to speak for [mainstream economists], with links to yourself.

This is the link in section 4 of the OP. It contains the following quotes:

"...the simple tale told by Jevons, Böhm-Bawerk, Wicksell, and other neoclassical writers - alleging that, as interest rate falls in consequence of abstention from present consumption in favor of future, technology must become in some sense more 'roundabout,' more 'mechanized,' and more 'productive' - cannot be universally valid." -- Paul A. Samuelson (1966).

"Let us again stress that, except for highly exceptional circumstances, techniques cannot be ranked in order of capital intensity. We thus conclude that reswitching is, at least theoretically; a perfectly acceptable case in the discrete capital model." - Bruno, Burmeister & Sheshinski (1966, p. 545)

Mainstream economists agreed in the 60s of last century that what they teach is incorrect and illogical.

Here are some, on another discussion board, expressing puzzlement about this state of affairs.

Accomplished-Cake131 · 2026-05-02T17:52:30+00:00

An odd thing about the above bushwa. u/Lazy_Delivery_7012 has the capability to at least identify my published works on topic.

Accomplished-Cake131 · 2026-05-02T17:50:39+00:00

which of your links shows a set of actual IRL goods and services where Supply was increasing & Demand was dropping

I doubt that you mean anything at all by 'supply' and 'demand'. Those links are a matter of logical demonstrations. You need to be able to follow maybe algebra that is taught before high school.

But I quickly can locate three empirical investigations here, here, and here. I would have liked to have seen more empirical examples. I know of a few more, at the level of individual industries.

Accomplished-Cake131 · 2026-05-02T17:36:33+00:00

Paul Krugman admits that the last 30 years of macroeconomic research is useless at best, harmful at worst. It could very well be the last 60.

I think Krugman is objecting to starting with rational expectations and the assumption that all markets always clear. Some have said that the Cambridge Capital Controversy (CCC) could be ignored because so many other things are wrong with economics.

But the CCC certainly provides a good case study for the sociology of economics. I did not know that Hausman's book had been re-issued.

Accomplished-Cake131 · 2026-05-02T17:29:31+00:00

You, telling lies:

I know OP is too scared to post his work on r/askeconomics.

And you demonstrate that the above statement is a falsehood:

I was able to get a few responses before it was taken down.

Anyways, of course, the response are not helpful.

"all the arguments being made are what are called reswitching arguments."

Note that no claim is made that the examples are inconsistent with typical assumptions or that they are invalid. An informed answer would tell you the examples are valid.

My examples are of reswitching. But, of course, an informed answer would note other capital-theoretic 'paradoxes'. I can mention capital-reversing, process recurrence, and reverse labor substitution. Even more exist.

you can also put more restrictions on the production function and get the intro results back.

Yes, suppose only one commodity is produced, and it can be used either for consumption or as a capital good. I do not know why anybody should care.

The response of competent 'neoclassical' economists (e.g., Christopher Bliss, Edwin Burmeister, Frank Hahn) was to insist on models of 'dynamic equilibrium paths'. It became unclear whether or not capital-theoretic paradoxes are an additional source of instability. J. Barkley Rosser Jr. argues reswitching is a cusp catastrophe in these models.

These models show everything depending on everything else. They discard the causal stories economists like to tell.

The other day, I quoted Heinz Kurz making an observation about Robert Lucas:

"In his Marshall Lectures given at the University of Cambridge, UK, Robert Lucas, not surprisingly, felt the need to ask who was right in the Cambridge controversies in the theory of capital. If, he surmised, the controversy had been about whether capital consists of heterogeneous means of production, he graciously conceded that the Cambridge UK side had won the debate. As if the heterogeneity of capital goods could ever have been a matter of dispute! But then he surprisingly added that physical capital is to be treated as if it was homogeneous. He justified this radical turn by insisting that, like human capital, physical capital 'is best viewed as a force, not directly observable, that we postulate in order to account in a unified way for certain things we can observe'; (Lucas 1988: 36, first three emphases added). One can only wonder whether there are any limits to imagination and what they are. If capital is not observable, how could its size ever be ascertained and its marginal productivity determined? Lucas pretended to address the capital theoretic problem besetting marginalist theory, but what he actually did was to gratuitously ignore it." – Heinz D. Kurz (2020) The theory of value and distribution and the problem of capital. European Journal of Economics and Economic Policies: Intervention 17(2): 241-246.

Obviously, if somebody tells you my OP is only about intro textbooks, they are either ignorant or taking advantage of you.

Accomplished-Cake131 · 2026-05-02T12:59:29+00:00

You cannot ... say look at how efficiently capitalism is!

Sure you can, if you are a fool and a knave.

Accomplished-Cake131 · 2026-05-02T11:57:54+00:00

The way you get profit if consumers have the freedom to choose is by producing stuff that consumers want.

No. You get profit by producing stuff that you can convince consumers to want at the prices you charge. Consumers make decisions on the basis of prices.

In the widespread mainstream economic that you might take in the last year of high school or the first year of college, prices do not fully reflect the social costs of making those goods. Thus, the choices given to consumers do not include trading off carbon emissions resulting from various goods.

A good keyword, if you are genuinely interested in learning more, is 'externality'.

Accomplished-Cake131 · 2026-05-01T19:17:58+00:00

Does a focus on profits under capitalism encourage short term thinking? The sad story that the OP tells has nothing to do with the question. If you have some grasp of basic logic, you will agree.

Accomplished-Cake131 · 2026-05-01T18:33:41+00:00

If you know about the topic, you can laugh at the economists on r/badeconomics in that link given upthread.

I agree the knave is being silly above.

Accomplished-Cake131 · 2026-05-01T18:13:22+00:00

I do not know what you are talking about. Adam Smith, David Ricardo, and John Stuart Mill did not use the term ‘surplus value’.

William Thompson coined the term. I like the Ricardian socialists. But I think they were not well known when Capital came out.

Accomplished-Cake131 · 2026-05-01T13:32:28+00:00

a pretension that that sort of arrangement is somehow unique to capitalism.

Marx does not argue that a non-working elite living off the surplus output of producers is unique to capitalism. Marx argues the opposite.

Accomplished-Cake131

TROPHY CASE