To whose value is the euro?

Abstract

This article contends that Marxist economic analysis can shed more light on the likely effect of the euro on the EU economy, and the UK economy if the UK were to join, than conventional neo‐classical macroeconomic analysis. Accumulated wealth/rentiers are incorporated into a model of the economy, in order to analyse how inflation affects the distribution of total social wealth between rentiers and business. The model suggests that rentiers gain, and business in general loses, from a state of price stability. Goes on to concentrate on inter‐firm issues by developing a multi‐sector model of the economy. The model is employed to illustrate how leading firms are also likely to benefit from price stability in the euro zone to the cost of business in the euro zone in general.

The relevance of Marx to all students of economics, no matter the level

“…Note Potts (2003a, b) presented abstract three‐sided models of the economy, including firms, workers and rentiers, to explore how each “class” may be affected in value terms by simulating alternative scenarios of strong growth and technological change and very slow growth and technological change. We found rentiers gained in value terms from very slow growth/technological change and suffered in value terms from fast growth/technological change (assuming rapid deflation does not maintain the value, as sequentially and non‐dualistically determined by labour time, of money).…”