The need to contain destructive competition has recently reappeared in the banking industry.
For example, in hearings before the Australian Senate the banks have told it that all out competition would be bad for the stability of the banking system. Meanwhile we estimate that around 1.5 per cent of Australia's GDP is the super profit of the biggest four banks. David Richardson The Australia Institute www.tai.org.au ----- Original Message ----- From: michael perelman <[email protected]> To: Progressive Economics <[email protected]> Subject: Re: [Pen-l] marginal productivity Date: Tue, 11 Jan 2011 17:43:04 -0800 > Rakesh mentions John Bates Clark theory. Actually, Clark > had two opposing theories. For policy makers, he taught > that trust, cartels and monopolies were necessary to > contain destructive competition. For workers, competition > resulted in just outcomes. > > I go into more details in The Invisible Handcuffs & > Railroading Economics. > > On Tue, Jan 11, 2011 at 4:35 PM, Lakshmi Rhone > > <[email protected]> wrote: "We do not really know > > if a US bus driver's wages are higher, in real terms > > ,i.e., in terms of purchasing power (which is what is > > socially relevant) than the wages of an Indian bus > driver." > > > > > Yes we do; it's much higher in $PPP. Tens of times > > higher. Econ I students still learn > > that it's basically true that all factors earn an amount > > equal to the value of what they > > contribute to output." And the wage is supposed to equal > > the marginal revenue product of labor, no? > > > > Ever since Clark this theory has supposed to make > > market-determined distribution seem fair. > > There are a lot of problems with this theory in terms of > > whether it adds up with non-constant returns to scale > > and whether it has empirical support and whether it can > > be formulated in an empirically testable manner. > > > > Leave that all aside. My point is that what gives the > > theory some practical resonance among the American > > working class are not the illusions of competition as > > Marx theorized but the protection afforded workers via > restrictive immigration law. > > > If wages were set in the absence of immigration control, > > workers would have no illusion that their earning > > reflects the value of what they contribute to output. I > > am not saying that in the absence of open borders the > American working class is not exploited. > > > > > > > _______________________________________________ > > pen-l mailing list > > [email protected] > > https://lists.csuchico.edu/mailman/listinfo/pen-l > > > > > > > > -- > Michael Perelman > Economics Department > California State University > Chico, CA > 95929 > > 530 898 5321 > fax 530 898 5901 > http://michaelperelman.wordpress.com > _______________________________________________ > pen-l mailing list > [email protected] > https://lists.csuchico.edu/mailman/listinfo/pen-l _______________________________________________ pen-l mailing list [email protected] https://lists.csuchico.edu/mailman/listinfo/pen-l
