Working Papers

Short list of papers posted to the web, with abstracts. For complete list, see CV.

Real Working Capital and the Boom and Bust Elephant 2016 As we don't notice until a catastrophe like hurricane Katrina, we depend on a continually renewed supply of real working capital: inventories of finished goods and other inputs. The One Percent operates like an Elephant in the boom and bust cycle, creating period shortages of real working capital. Here's a Powerpoint presentation of the story.

Obama Does Havana Observations on Cuban-U.S. History and Prospects During Obama's Visit in March 2016.

Wealth Inequality, Working Capital, Growth and Instability: A Dual Economy Simulation Model. Presented at the EEA, 2016. In a "Rich" sector, a small population owns most of the land and much of the physical working capital--food and other supplies--call it "food". Food serves both as consumption good and capital stock. A "Poor" sector, with most of the population, borrows working capital--food--from the Rich sector across a barrier of transaction costs, returning it with interest, using its own land and food stock as collateral. Starting from a very small food inventory, the economy grows for a hundred periods. The model shows the following: In Rich compared to Poor, wages are higher and interest rates are lower; output per man-hour is higher and output per acre is lower. This unequal economy is less productive and slower growing than an identical equal economy. In addition, small shocks in total factor productivity can generate large fluctuations, which reduce overall productivity and growth, and fall largely on Poor.

An Economist in Havana A personal journal of three weeks in Havana in July 2015, studying Spanish at the University of Havana, and observing the economy and culture.

The Abduction of Adam Smith 2013. How a Brilliant Observer and Kindly Egalitarian Became the Symbol of Greed.

Henry George and Philip Wicksteed's "Coordination of the Laws of Distribution" Presented at HES, 2012. In 1894, Philip Wicksteed published his seminal monograph, An Essay on the Coordination of the Laws of Distribution, which formalized and clarified concepts of marginal productivity, and introduced the constant returns (linear homogeneous) model under which, when all factors earn their marginal products, they exhaust the total product. Wicksteed's title surely reflects the chapter in Henry George's Progress and Poverty on "The Correlation and Co-ordination of the Laws of Distribution". However, the Essay does not mention George or the classical economists notably Ricardo. It explicitly rejects the classical division of factors into land, labor and capital--laying the foundation of modern neoclassical economics in which all factors are symmetrical so we might as well just use two, capital and labor. Finally, Wicksteed conflates two meanings of the word "surplus", to claim there exists no taxable rent.

Cooperation, Competition and Economic Rent: A Natural History Perspective. Presented at EEA 2006.
      All species cooperate, generating a shared surplus, or economic rent. Rent provokes competition between groups and between individuals within groups for a greater share of the rent. Competition in turn both dissipates rent and spurs innovation. Among territorial species, holders of superior territories have incentives to practice "imperialism"-controlling larger territories than necessary. Among non-territorial species, intense competition may promote rapid speciation..

Distribution, Productivity and Growth Presented at EEA 2003.
     Simulation model of an agricultural economy with 5 classes, ranging from large landlords to landless peasants. As distribution of land ranges from equal to highly unequal, income becomes more unequal and wages and output fall.

Equality, Productivity and Growth 1981, revised 1994.
     Popular article on why greater equality is good for economic productivity and growth.

Unequal Distribution as a Cause of Market Failure--Are Land Taxes the Remedy? Giannini Foundation Working Paper No. 721, 1994.
     Land taxes reduce market failure caused by unequal distribution of land holdings. Output taxes aggravate market failure.

Taxes, Land Values, Wages, and the Economic Margin: Effects on Banking of a Shift to Land Taxes Presented at American Institute for Economic Research, 1994.
     A revenue-neutral shift of taxes to land taxes will increase central land values but lower peripheral land values. Output will increase, as will wage rates and wage income.

Differences Between Large and Small Firms: Application to Oil Leasing Policy 1977.
     Large firms have a comparative advantage in undertakings that are more capital-intensive undertakings; small firms in more labor-intensive. Current leasing policies favor large firms; different policies could give greater opportunity to small firms. (The logic applies equally to broadcast licences.)

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