Wage rates/Debunking Economics

["Harry Veeder" <veed0001@xxxxxxxxxxxxxxxx>]

----------
>From: Clifford Poirot <cpoirot@xxxxxxxxxxx>
>To: "'Alan G. Isaac'" <aisaac@xxxxxxxxxxxx>, Robert Vienneau
<rvien@xxxxxxxxxxxxxx>, Post Keynesian Theory <pkt@xxxxxxxxxxxxxxxx>
>Subject: RE: Debunking Economics
>Date: Thu, May 18, 2000, 4:56 pm
>

>Indeed, Blaug is very specific in his book that marginal productivity does
>not even determine the wage rate. If MP does not even determine the wage
>rate, trying to base a theory of distributive justice on MP would be an
>extremely tenuous project.

On "Wage rates"...

Vegetables have a "price rate" but every farmer
isn't a vegetable farmer. General "farming rates"
that encompass all forms of farming would be
a false composition.

So why do general 'wage rates' have a place
in economic theory? Because the current theories
of employment are wedded to a wage rates analysis.

It is important to remind ourselves of that there
is a distinction between the volume of employment
and the composition of employment.
Next we must be careful not to use the same
analytical methods on both volume and composition.
The 'Wage rate' analysis of employment unfortunately
introduces compositional concerns.
These concerns in turn interfere with actual
employment levels generating an "unemployment
bias" in the figures.

In relative terms, this bias is minimal when *actual*
unemployment is high. The bias effect increases
when *actual* employment hovers around full employment.
Today, we have no good idea of actual employment
levels. Are we are at full, under or over employment?

To eliminate this bias, we need new theories
of aggregate employment that do not depend on
wage rates.

Harry Veeder