Thursday, November 3, 2011

The Rents Are Too Damn High QOTD

. Thursday, November 3, 2011

From a long, excellent post by Ashwin Parameswaran at Macroeconomic Resilience. Please read the whole thing, as I expect it will be discussed a lot in the blogosphere over the next few days:

It is not the absence of rents but the continuous threat to the survival of the incumbent rent-earner that defines a truly vibrant capitalist economy.
This, in a nutshell, encapsulates much of the disagreement between Marx and Schumpeter: the former saw this threat as decreasing over time, while the latter saw it increasing. Perhaps one way to read the post-WWII economy is that Schumpeter is right over longer time horizons, but that the process is prone to fits and starts. In the shorter run Marx may well have the better hand.

Parameswaran goes on to link this to the Great Stagnation, theories of unemployment, Minsky, Keynesian/post-Keynesian macro, and much else besides. I'll be pondering this post for a long time.


Ashwin said...

Thanks! Pity more economists don't read Marx or Schumpeter but then many of these ideas are impossible to fit into an equilibrium perspective.

The Rents Are Too Damn High QOTD




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