The Social Architecture of Capitalism
AbstractA dynamic model of the social relations between workers and capitalists is introduced. The model is deduced from the assumption that the law of value is an organising principle of modern economies. The model self-organises into a dynamic equilibrium with statistical properties that are in close qualitative and in many cases quantitative agreement with a broad range of known empirical distributions of developed capitalism, including the power-law distribution of firm size, the Laplace distribution of firm and GDP growth, the lognormal distribution of firm demises, the exponential distribution of the duration of recessions, the lognormal-Pareto distribution of income, and the gamma-like distribution of the rate-of-profit of firms. Normally these distributions are studied in isolation, but this model unifies and connects them within a single causal framework. In addition, the model generates business cycle phenomena, including fluctuating wage and profit shares in national income about values consistent with empirical studies. A testable consequence of the model is a conjecture that the rate-of-profit distribution is consistent with a parameter-mix of a ratio of normal variates with means and variances that depend on a firm size parameter that is distributed according to a power-law.
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Bibliographic InfoPaper provided by arXiv.org in its series Papers with number cond-mat/0401053.
Date of creation: Jan 2004
Date of revision: Mar 2011
Publication status: Published in Physica A: Statistical Mechanics and its Applications, 346, pp. 589-622, 2005
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- Wright, Ian, 2005. "The social architecture of capitalism," Physica A: Statistical Mechanics and its Applications, Elsevier, vol. 346(3), pages 589-620.
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