[go: up one dir, main page]
IDEAS home Printed from https://ideas.repec.org/p/kch/wpaper/sdes-2018-10.html
   My bibliography  Save this paper

The dynamics of exploitation and inequality in economies with heterogeneous agents

Author

Listed:
  • Giorgos Galanis

    (University of London)

  • Roberto Veneziani

    (Queen Mary University of London)

  • Naoki Yoshihara

    (School of Economics and Management, Kochi University of Technology)

Abstract
This paper analyses the relation between growth, inequalities, and exploitation as the unequal exchange of labour (UE exploitation). An economy with heterogeneous, intertemporally optimising agents is considered which generalises John Roemer's [52, 53] seminal models. First, a correspondence between pro ts and the existence (and intensity) of UE exploitation is proved in the dynamic context. This result is important, positively, because the pro t rate is one of the key determinants of investment decisions, and, normatively, because it provides a link between UE exploitation and the functional distribution of income. Second, it is shown that asset inequalities are fundamental for the emergence of UE exploitation, but they are not sufficient for its persistence, both in equilibria with accumulation and growth, and, perhaps more surprisingly, in stationary intertemporal equilibrium paths. Labour-saving technical progress, however, may yield sustained growth with persistent UE exploitation by keeping labour abundant relative to capital. Persistent inequalities in income and labour exchanged arise from the interaction between labour market conditions and differential ownership of productive assets.

Suggested Citation

  • Giorgos Galanis & Roberto Veneziani & Naoki Yoshihara, 2018. "The dynamics of exploitation and inequality in economies with heterogeneous agents," Working Papers SDES-2018-10, Kochi University of Technology, School of Economics and Management, revised Oct 2018.
    • Handle: RePEc:kch:wpaper:sdes-2018-10
    as

    Download full text from publisher

    File URL: http://www.souken.kochi-tech.ac.jp/seido/wp/SDES-2018-10.pdf
    File Function: First version, 2018
    Download Restriction: no
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. Gilbert L. Skillman, 2017. "Marx’s Capital through the lens of Roemer’s General Theory (and vice-versa)," Social Choice and Welfare, Springer;The Society for Social Choice and Welfare, vol. 49(3), pages 423-443, December.
    2. François Maniquet, 2002. "A study of proportionality and robustness in economies with a commonly owned technology," Review of Economic Design, Springer;Society for Economic Design, vol. 7(1), pages 1-15.
    3. Dosi, G. & Pereira, M.C. & Roventini, A. & Virgillito, M.E., 2017. "When more flexibility yields more fragility: The microfoundations of Keynesian aggregate unemployment," Journal of Economic Dynamics and Control, Elsevier, vol. 81(C), pages 162-186.
    4. Roberto Veneziani & Naoki Yoshihara, 2017. "Globalisation and inequality in a dynamic economy: an axiomatic analysis of unequal exchange," Social Choice and Welfare, Springer;The Society for Social Choice and Welfare, vol. 49(3), pages 445-468, December.
    5. Brent Neiman, 2014. "The Global Decline of the Labor Share," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 129(1), pages 61-103.
    6. Debraj Ray & Arthur Robson, 2012. "Status, Intertemporal Choice, and Risk‐Taking," Econometrica, Econometric Society, vol. 80(4), pages 1505-1531, July.
    7. Thomas Piketty & Gabriel Zucman, 2014. "Capital is Back: Wealth-Income Ratios in Rich Countries 1700–2010," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 129(3), pages 1255-1310.
    8. Patriarca, Fabrizio & Vona, Francesco, 2013. "Structural change and income distribution: An inverted-U relationship," Journal of Economic Dynamics and Control, Elsevier, vol. 37(8), pages 1641-1658.
    9. Krueger, D. & Mitman, K. & Perri, F., 2016. "Macroeconomics and Household Heterogeneity," Handbook of Macroeconomics, in: J. B. Taylor & Harald Uhlig (ed.), Handbook of Macroeconomics, edition 1, volume 2, chapter 0, pages 843-921, Elsevier.
    10. Banerjee, Abhijit V & Newman, Andrew F, 1993. "Occupational Choice and the Process of Development," Journal of Political Economy, University of Chicago Press, vol. 101(2), pages 274-298, April.
    11. Fischer, Thomas, 2017. "Thomas Piketty and the rate of time preference," Journal of Economic Dynamics and Control, Elsevier, vol. 77(C), pages 111-133.
    12. Daniele Tavani & Luca Zamparelli, 2013. "Endogenous Technical Change, Employment and Distribution in the Goodwin Model," IMK Working Paper 127-2013, IMK at the Hans Boeckler Foundation, Macroeconomic Policy Institute.
    13. Guglielmo Barone & Sauro Mocetti, 2021. "Intergenerational Mobility in the Very Long Run: Florence 1427–2011 [Intergenerational Economic Mobility in the United States, 1940 to 2000]," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 88(4), pages 1863-1891.
    14. Roberto Veneziani & Luca Zamparelli & Naoki Yoshihara, 2017. "A Progress Report On Marxian Economic Theory: On The Controversies In Exploitation Theory Since Okishio (1963)," Journal of Economic Surveys, Wiley Blackwell, vol. 31(5), pages 1421-1448, December.
    15. Morishima, Michio, 1969. "Theory of Economic Growth," OUP Catalogue, Oxford University Press, number 9780198281641.
    16. Greg Kaplan & Giovanni L. Violante, 2014. "A Model of the Consumption Response to Fiscal Stimulus Payments," Econometrica, Econometric Society, vol. 82(4), pages 1199-1239, July.
    17. Garance Genicot & Debraj Ray, 2017. "Aspirations and Inequality," Econometrica, Econometric Society, vol. 85, pages 489-519, March.
    18. Bohm, Volker & Kaas, Leo, 2000. "Differential savings, factor shares, and endogenous growth cycles," Journal of Economic Dynamics and Control, Elsevier, vol. 24(5-7), pages 965-980, June.
    19. Tavani Daniele & Zamparelli Luca, 2015. "Endogenous technical change, employment and distribution in the Goodwin model of the growth cycle," Studies in Nonlinear Dynamics & Econometrics, De Gruyter, vol. 19(2), pages 209-216, April.
    20. J. B. Taylor & Harald Uhlig (ed.), 2016. "Handbook of Macroeconomics," Handbook of Macroeconomics, Elsevier, edition 1, volume 2, number 2.
    21. Roemer, John E, 1982. "Origins of Exploitation and Class: Value Theory of Pre-Capitalist Economy," Econometrica, Econometric Society, vol. 50(1), pages 163-192, January.
    22. Roemer John E. & Silvestre Joaquim, 1993. "The Proportional Solution for Economies with Both Private and Public Ownership," Journal of Economic Theory, Elsevier, vol. 59(2), pages 426-444, April.
    23. Luigi L. Pasinetti, 1962. "Rate of Profit and Income Distribution in Relation to the Rate of Economic Growth," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 29(4), pages 267-279.
    24. Kiminori Matsuyama, 2004. "Financial Market Globalization, Symmetry-Breaking, and Endogenous Inequality of Nations," Econometrica, Econometric Society, vol. 72(3), pages 853-884, May.
    25. Kurz,Heinz D. & Salvadori,Neri, 1997. "Theory of Production," Cambridge Books, Cambridge University Press, number 9780521588676.
    26. Veneziani, Roberto & Yoshihara, Naoki, 2014. "One Million Miles to Go: Taking the Axiomatic Road to Defining Exploitation," Discussion Paper Series 615, Institute of Economic Research, Hitotsubashi University.
    27. Naoki Yoshihara, 2017. "A Progress Report On Marxian Economic Theory: On The Controversies In Exploitation Theory Since Okishio (," Journal of Economic Surveys, Wiley Blackwell, vol. 31(2), pages 632-659, April.
    28. repec:hal:pseose:halshs-01109372 is not listed on IDEAS
    29. Bidard, Christian, 1990. "An Algorithmic Theory of the Choice of Techniques," Econometrica, Econometric Society, vol. 58(4), pages 839-859, July.
    30. Karl Shell, 2010. "A Model of Inventive Activity and Capital Accumulation," Levine's Working Paper Archive 1409, David K. Levine.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Galanis, Giorgos & Veneziani, Roberto & Yoshihara, Naoki, 2019. "The dynamics of inequalities and unequal exchange of labor in intertemporal linear economies," Journal of Economic Dynamics and Control, Elsevier, vol. 100(C), pages 29-46.
    2. Yoshihara, Naoki & Veneziani, Roberto, 2018. "The Theory Of Exploitation As The Unequal Exchange Of Labour," Economics and Philosophy, Cambridge University Press, vol. 34(3), pages 381-409, November.
    3. Weikai Chen & Naoki Yoshihara, 2019. "Persistent Exploitation with Intertemporal Reproducible Solution in Pre-industrial Economies," UMASS Amherst Economics Working Papers 2019-10, University of Massachusetts Amherst, Department of Economics.
    4. Yoshihara, Naoki & Veneziani, Roberto, 2013. "The Measurement of Labour Content: A General Approach," Discussion Paper Series 587, Institute of Economic Research, Hitotsubashi University.
    5. Jonathan F Cogliano, 2023. "Marx’s equalised rate of exploitation," Cambridge Journal of Economics, Cambridge Political Economy Society, vol. 47(1), pages 133-169.
    6. Roberto Veneziani & Naoki Yoshihara, 2017. "Globalisation and inequality in a dynamic economy: an axiomatic analysis of unequal exchange," Social Choice and Welfare, Springer;The Society for Social Choice and Welfare, vol. 49(3), pages 445-468, December.
    7. Jonathan F. Cogliano, 2017. "Surplus Value Production and Realization in Marxian Theory - Applications to the U.S., 1987-2015," Working Paper Series 2017-01, Dickinson College, Department of Economics.
    8. Galanis, Giorgos & Veneziani, Roberto & Yoshihara, Naoki, 2016. "Growth, Exploitation and Class Inequalities," Discussion Paper Series 636, Institute of Economic Research, Hitotsubashi University.
    9. Isabel Cairo & Jae Sim, 2017. "Income Inequality, Financial Crises and Monetary Policy," 2017 Meeting Papers 1433, Society for Economic Dynamics.
    10. Palagi, Elisa & Napoletano, Mauro & Roventini, Andrea & Gaffard, Jean-Luc, 2023. "An agent-based model of trickle-up growth and income inequality," Economic Modelling, Elsevier, vol. 129(C).
    11. Yoshihara, Naoki & Veneziani, Roberto, 2023. "The measurement of labour content: An axiomatic approach," Journal of Economic Behavior & Organization, Elsevier, vol. 212(C), pages 392-402.
    12. Pierre Mabille, 2019. "Aggregate Precautionary Savings Motives," 2019 Meeting Papers 344, Society for Economic Dynamics.
    13. Kazuhiro Kurose, 2022. "A two-class economy from the multi-sectoral perspective: the controversy between Pasinetti and Meade–Hahn–Samuelson–Modigliani revisited," Evolutionary and Institutional Economics Review, Springer, vol. 19(1), pages 239-270, April.
    14. Naoki Yoshihara, 2021. "On the labor theory of value as the basis for the analysis of economic inequality in the capitalist economy," Japanese Economy, Taylor & Francis Journals, vol. 47(2-3), pages 190-212, July.
    15. Enea Baselgia & Reto Foellmi, 2022. "Inequality and growth: a review on a great open debate in economics," WIDER Working Paper Series wp-2022-5, World Institute for Development Economic Research (UNU-WIDER).
    16. Jonathan F. Cogliano & Roberto Veneziani & Naoki Yoshihara, 2019. "Exploitation, skills, and inequality," Review of Social Economy, Taylor & Francis Journals, vol. 77(2), pages 208-249, April.
    17. Heinz D. Kurz, 2011. "The Contributions of Two Eminent Japanese Scholars to the Development of Economic Theory: Michio Morishima and Takashi Negishi," Chapters, in: Heinz D. Kurz & Tamotsu Nishizawa & Keith Tribe (ed.), The Dissemination of Economic Ideas, chapter 13, Edward Elgar Publishing.
    18. Jonathan F. Cogliano & Roberto Veneziani & Naoki Yoshihara, 2022. "Computational methods and classical‐Marxian economics," Journal of Economic Surveys, Wiley Blackwell, vol. 36(2), pages 310-349, April.
    19. Soh Kaneko & Naoki Yoshihara, 2018. "On the General Impossibility of Persistent Unequal Exchange Free Trade Equilibria in the Pre-industrial World Economy," Working Papers SDES-2018-19, Kochi University of Technology, School of Economics and Management, revised Dec 2018.
    20. Fernández-Villaverde, Jesús & Drautzburg, Thorsten & Guerron-Quintana, Pablo A., 2017. "Political Distribution Risk and Aggregate Fluctuations," CEPR Discussion Papers 12187, C.E.P.R. Discussion Papers.

    More about this item

    Keywords

    Dynamics; accumulation; exploitation; inequalities;
    All these keywords.

    JEL classification:

    • D51 - Microeconomics - - General Equilibrium and Disequilibrium - - - Exchange and Production Economies
    • D63 - Microeconomics - - Welfare Economics - - - Equity, Justice, Inequality, and Other Normative Criteria and Measurement
    • C61 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Optimization Techniques; Programming Models; Dynamic Analysis
    • E11 - Macroeconomics and Monetary Economics - - General Aggregative Models - - - Marxian; Sraffian; Kaleckian

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:kch:wpaper:sdes-2018-10. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Sachiko Minami (email available below). General contact details of provider: https://edirc.repec.org/data/smkocjp.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.