Thursday, August 2, 2012

Veblen’s Institutionalist Elaboration of Rent Theory

http://michael-hudson.com/2012/07/veblens-institutionalist-elaboration-of-rent-theory/

A Beneficial Read !

Conclusion
As the heirs to classical political economy and the German historical school, the American institutionalists retained rent theory and its corollary idea of unearned income. More than any other institutionalist, Veblen emphasized the dynamics of banks financing real estate speculation and Wall Street maneuvering to organize monopolies and trusts. Yet despite the popularity of his writings with the reading public, his contribution has remained isolated from the academic mainstream, and he did not leave a “school.” The rentier strategy has been to make rent extraction invisible, not the center of attention it occupied in classical political economy. One barely sees today a quantification of the degree to which overhead charges for rent, insurance and interest are rising above the cost of production, even as this prices financialized economies out of world markets.
The narrowing of Chicago-style monetarism and neoliberalism has left the economics discipline in much the state that Max Planck applied to physics from Maxwell to Einstein: Progress occurs one funeral at a time. The old conservatives die off, freeing the way for more progressive successors to take the steering wheel. But what makes today’s economics different is that it actually would help to look backward, to the epoch before the financial sector and its allied rentier interests hijacked the discipline. The most systematic analysis of this process was that of Veblen nearly a century ago. It remains sufficiently relevant that Marxists and more heterodox critics have incorporated his theorizing into their worldview.

 Speech given at the Veblen, Capitalism and Possibilities for a Rational Economic Order Conference, Istanbul, Turkey, June 6th, 2012

No comments:

Post a Comment