The Monetary Profit Paradox and a Sustainable Economy - A Fundamental Approach
AbstractMain goal of this paper is to clarify the paradox of monetary profit. The definitions and formulas introduced will make it simple and straight forward to understand the paradox. In order to understand from where the profits or monetary profits of capitalists and firms emerge I examined the phrase of Marx, ‘Die Gesamtklasse der Kapitalisten kann nichts aus der Zirkulation herausziehen, was nicht vorher hineingeworfen war.’ and classified it as very confusing. I will show where this confusion comes from and show how to cope with problems alike in a systematic way by using definitions and formulas. As a bonus these formulas give us insight under which conditions the economy can be sustainable and that the relation between monetary profit for firms and savings for household defines a very limited solution space in which the economy can operate in a sustainable way and yet only considering the boundary condition for firm profit and household savings. It will also give us a clue where the motivation for participating in the economy comes from.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoPaper provided by University Library of Munich, Germany in its series MPRA Paper with number 55235.
Date of creation: 08 Oct 2013
Date of revision: 10 Apr 2014
monetary profit; paradox; Marx; Keynes; Capitalists;
Find related papers by JEL classification:
- E11 - Macroeconomics and Monetary Economics - - General Aggregative Models - - - Marxian; Sraffian; Institutional; Evolutionary
- E12 - Macroeconomics and Monetary Economics - - General Aggregative Models - - - Keynes; Keynesian; Post-Keynesian
- E20 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - General (includes Measurement and Data)
- E25 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Aggregate Factor Income Distribution
This paper has been announced in the following NEP Reports:
- NEP-ALL-2014-04-18 (All new papers)
- NEP-HIS-2014-04-18 (Business, Economic & Financial History)
- NEP-HME-2014-04-18 (Heterodox Microeconomics)
- NEP-MAC-2014-04-18 (Macroeconomics)
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Keen, Steve, 2010.
"Solving the paradox of monetary profits,"
Economics Discussion Papers
2010-2, Kiel Institute for the World Economy.
- Keen, Steve, 2010. "Solving the paradox of monetary profits," Economics - The Open-Access, Open-Assessment E-Journal, Kiel Institute for the World Economy, vol. 4(31), pages 1-32.
- Tomasson, Gunnar & Bezemer, Dirk J, 2010. "What is the Source of Profit and Interest? A Classical Conundrum Reconsidered," MPRA Paper 20320, University Library of Munich, Germany.
- Bruun, Charlotte & Heyn-Johnsen, Carsten, 2009. "The paradox of monetary profits: an obstacle to understanding financial and economic Crisis?," Economics Discussion Papers 2009-52, Kiel Institute for the World Economy.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Ekkehart Schlicht).
If references are entirely missing, you can add them using this form.