Globalisation and inequality in a dynamic economy: an axiomatic analysis of unequal exchange

Veneziani, Roberto; Yoshihara, Naoki

doi:10.1007/s00355-017-1062-8

Cited by 14 publications

(16 citation statements)

References 26 publications

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“…9 Definition 2 identifies exploitation status in terms of the bundles of goods that an agent can purchase with her income. More precisely, following Veneziani and Yoshihara [29], at any RS (p, w) and for all ν ∈ N , let c ν t satisfy…”

Section: Exploitationmentioning

confidence: 99%

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Exploitation, skills, and inequality

Cogliano

Veneziani

Yoshihara

2019

Review of Social Economy

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This paper uses a computational framework to analyse the equilibrium dynamics of exploitation and inequality in accumulation economies with heterogeneous labour. A novel index is presented which measures the intensity of exploitation at the individual level and the dynamics of the distribution of exploitation intensity is analysed. Various taxation schemes are analysed which may reduce exploitation or inequalities in income and wealth. It is shown that relatively small taxation rates may have significant cumulative effects on wealth and income inequalities. Further, taxation schemes that eliminate exploitation also reduce disparities in income and wealth but in the presence of heterogeneous skills, do not necessarily eliminate them. The inegalitarian effects of different abilities need to be tackled with a progressive education policy that compensates for unfavourable circumstances. JEL: B51; C63, D31.

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Section: Exploitationmentioning

confidence: 99%

“…Indeed, based on the axiomatic analysis developed by Yoshihara[34] and Veneziani and Yoshihara[27,29], it follows that Definition 2 is the only definition of exploitation that all of the classic approaches would support in the context of our one-good accumulation economy.…”

mentioning

confidence: 99%

Exploitation, skills, and inequality

Cogliano

Veneziani

Yoshihara

2019

Review of Social Economy

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“…We introduce technical progress in section 6 below. The other assumptions on technology can also be relaxed, albeit at the cost of a significant increase in technicalities (see, for example, the general convex cone economies analyzed in Veneziani and Yoshihara [65]). 17 As in Patriarca and Vona [42] the economy displays intertemporal complementarities -whereby "production takes time and is carried on in vertical integrated firms with fixed proportions of capital and labor" (Patriarca and Vona [42], p.1643) -and markets open sequentially (produced inputs are bought before production takes place and must be financed out of beginning-of-period asset holdings).…”

Section: The Modelmentioning

confidence: 99%

“…Definition 1 is an intertemporal extension of the concept of RS first defined by Roemer [50] and it provides a general notion of Marxian equilibrium (Veneziani and Yoshihara [65]). It is important to note that the concept of RS does not impose market clearing, and allows for an aggregate excess supply of produced goods, and, crucially, labor.…”

Section: The Modelmentioning

confidence: 99%

The dynamics of inequalities and unequal exchange of labor in intertemporal linear economies

Galanis

Veneziani

Yoshihara

2019

Journal of Economic Dynamics and Control

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Introducing a concept of fairness of economic allocations, namely exploitation as the unequal exchange of labor (henceforth, UE exploitation) by generalizing Roemer's [51, 52] seminal model, this paper aims to answer the following two questions in the context of an intertemporal economy with linear technology: How is income and wealth inequality related (or unrelated) to the existence and persistence of UE exploitation? What are the mechanisms driving the persistent existence of UE exploitation in growing economies? Agents are UE exploited (resp. exploiters) if the amount of labor that they contribute to the economy is smaller (resp. bigger) than the amount of labor 'received' by them via their income. It is proved, first, that UE exploitation is monotonically correlated to functional income inequality. Second, it is shown that, unless agents discount the future, asset inequalities are necessary, but not sufficient for the persistence of UE exploitation, and the capital accumulation leading to the disappearance of UE exploitation cannot be ruled out in equilibrium. Third, it is shown that, regardless of whether agents discount the future, labor-saving technical progress may yield sustained growth with persistent UE exploitation by keeping labor abundant relative to capital, which restrains wages from rising. Unlike in models with differentiable production functions, this mechanism does not rely on changes in the marginal productivity of inputs and it is entirely driven by the interaction between innovation and labor markets.

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“…In dynamic accumulation economies, it is not difficult to show that capital may become abundant, leading profits and exploitation to disappear (Devine and Dymski, ). Perhaps more surprisingly, Veneziani () and Veneziani and Yoshihara () have proved that if savings are allowed in a dynamic capitalist economy, then asset inequalities are necessary for exploitation to emerge, but alone they are not sufficient for it to persist even if agents do not accumulate in equilibrium. These results cast doubts on the claim that asset inequalities are necessary and sufficient for the emergence and the persistence of exploitative relations, and raise the issue of the determinants of exploitation and class.…”

Section: Introductionmentioning

confidence: 99%

The Dynamics of Exploitation and Class in Accumulation Economies

2016

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This paper analyses the equilibrium dynamics of exploitation and class in general accumulation economies with population growth, technical change, and bargaining by adopting a novel computational approach. First, the determinants of the emergence and persistence of exploitation and class are investigated, and the role of labour-saving technical change and, even more importantly, power is highlighted. Second, it is shown that the concept of exploitation provides the foundations for a logically coherent and empirically relevant analysis of inequalities and class relations in advanced capitalist economies. An index that identifies the exploitation level, or intensity of each individual can be defined and its empirical distribution studied using the standard tools developed in the theory of inequality measurement.

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Globalisation and inequality in a dynamic economy: an axiomatic analysis of unequal exchange

Cited by 14 publications

References 26 publications

Exploitation, skills, and inequality

Exploitation, skills, and inequality

The dynamics of inequalities and unequal exchange of labor in intertemporal linear economies

The Dynamics of Exploitation and Class in Accumulation Economies

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