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Exploitation, skills, and inequality

Author

Listed:
  • Jonathan F. Cogliano

    () (Department of Economics, Dickinson College)

  • Roberto Veneziani

    () (School of Economics and Finance, Queen Mary University of London)

  • Naoki Yoshihara

    () (Economics Department, University of Massachusetts - Amherst)

Abstract

This paper uses a computational framework to analyse the equilibrium dynamics of exploitation and inequality in accumulation economies with heterogeneous labour. A novel index is presented which measures the intensity of exploitation at the individual level and the dynamics of the distribution of exploitation intensity is analysed. The effects of technical change and evolving social norms on exploitation and inequalities are also considered and an interesting phenomenon of exploitation cycles is identified. Various taxation schemes are analysed which may reduce exploitation or inequalities in income and wealth. It is shown that relatively small taxation rates may have significant cumulative effects on wealth and income inequalities. Further, taxation schemes that eliminate exploitation also reduce disparities in income and wealth but in the presence of heterogeneous skills, do not necessarily eliminate them. The inegalitarian effects of different abilities need to be tackled with a progressive education policy that compensates for unfavourable circumstances.

Suggested Citation

  • Jonathan F. Cogliano & Roberto Veneziani & Naoki Yoshihara, 2018. "Exploitation, skills, and inequality," Working Paper Series 2018-01, Dickinson College, Department of Economics.
  • Handle: RePEc:dic:wpaper:2018-01
    as

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    File URL: http://users.dickinson.edu/~coglianj/RePEc/dic/wpaper/WP2018_01.pdf
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    References listed on IDEAS

    as
    1. Skillman, Gilbert L., 1995. "Ne Hic Saltaveris: The Marxian Theory of Exploitation After Roemer," Economics and Philosophy, Cambridge University Press, vol. 11(02), pages 309-331, October.
    2. Yoshihara, Naoki, 2010. "Class and exploitation in general convex cone economies," Journal of Economic Behavior & Organization, Elsevier, vol. 75(2), pages 281-296, August.
    3. Gérard Duménil & Duncan Foley & Dominique Lévy, 2009. "A Note On The Formal Treatment Of Exploitation In A Model With Heterogenous Labor," Metroeconomica, Wiley Blackwell, vol. 60(3), pages 560-567, July.
    4. Philippe Aghion & Philippe Askenazy & Nicolas Berman & Gilbert Cette & Laurent Eymard, 2012. "Credit Constraints And The Cyclicality Of R&D Investment: Evidence From France," Journal of the European Economic Association, European Economic Association, vol. 10(5), pages 1001-1024, October.
    5. Roberto Veneziani, 2013. "Exploitation, inequality and power," Journal of Theoretical Politics, , vol. 25(4), pages 526-545, October.
    6. Richard R. Nelson & Sidney G. Winter & Herbert L. Schuette, 1976. "Technical Change in an Evolutionary Model," The Quarterly Journal of Economics, Oxford University Press, vol. 90(1), pages 90-118.
    7. Ian Wright, 2011. "Convergence to natural prices in simple production," Open Discussion Papers in Economics 75, The Open University, Faculty of Social Sciences, Department of Economics.
    8. Veneziani, Roberto & Yoshihara, Naoki, 2016. "The Theory of Exploitation as the Unequal Exchange of Labour," Discussion Paper Series 652, Institute of Economic Research, Hitotsubashi University.
    9. Marc Fleurbaey, 2014. "The facets of exploitation," Journal of Theoretical Politics, , vol. 26(4), pages 653-676, October.
    10. repec:bla:jecsur:v:31:y:2017:i:5:p:1272-1303 is not listed on IDEAS
    11. Roberto Veneziani & Naoki Yoshihara, 2015. "Exploitation in economies with heterogeneous preferences, skills and assets: An axiomatic approach," Journal of Theoretical Politics, , vol. 27(1), pages 8-33, January.
    12. Peter Flaschel & Reiner Franke & Roberto Veneziani, 2013. "Labour productivity and the law of decreasing labour content," Cambridge Journal of Economics, Oxford University Press, vol. 37(2), pages 379-402.
    13. Veneziani, Roberto & Yoshihara, Naoki, 2014. "One Million Miles to Go: Taking the Axiomatic Road to Defining Exploitation," Discussion Paper Series 615, Institute of Economic Research, Hitotsubashi University.
    14. Yoshihara, Naoki & Veneziani, Roberto, 2009. "Exploitation as the Unequal Exchange of Labour: An Axiomatic Approach," CCES Discussion Paper Series 23, Center for Research on Contemporary Economic Systems, Graduate School of Economics, Hitotsubashi University.
    15. repec:hrv:faseco:30752812 is not listed on IDEAS
    16. Jonathan F. Cogliano & Roberto Veneziani & Naoki Yoshihara, 2016. "The Dynamics of Exploitation and Class in Accumulation Economies," Metroeconomica, Wiley Blackwell, vol. 67(2), pages 242-290, May.
    17. Dumenil, Gerard & Levy, Dominique, 2003. "Technology and distribution: historical trajectories a la Marx," Journal of Economic Behavior & Organization, Elsevier, vol. 52(2), pages 201-233, October.
    18. Edward N. Wolff, 1986. "The Productivity Slowdown and the Fall in the U.S. Rate of Profit, 1947-76," Review of Radical Political Economics, Union for Radical Political Economics, vol. 18(1-2), pages 87-109, March.
    19. Wolff, Edward N, 1991. "Capital Formation and Productivity Convergence over the Long Term," American Economic Review, American Economic Association, vol. 81(3), pages 565-579, June.
    20. John E. Roemer, 2010. "Kantian Equilibrium," Scandinavian Journal of Economics, Wiley Blackwell, vol. 112(1), pages 1-24, March.
    21. Veneziani, Roberto, 2007. "Exploitation and time," Journal of Economic Theory, Elsevier, vol. 132(1), pages 189-207, January.
    22. Walde, Klaus, 2002. "The economic determinants of technology shocks in a real business cycle model," Journal of Economic Dynamics and Control, Elsevier, vol. 27(1), pages 1-28, November.
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    25. Ian Wright, 2011. "Classical macrodynamics and the labor theory of value," Open Discussion Papers in Economics 76, The Open University, Faculty of Social Sciences, Department of Economics.
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    27. Thomas Piketty, 2015. "Capital and Wealth Taxation in the 21st Century," National Tax Journal, National Tax Association;National Tax Journal, vol. 68(2), pages 449-458, June.
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    More about this item

    Keywords

    Exploitation; Heterogeneous Labour; Wealth Taxes; Computational Methods;

    JEL classification:

    • B51 - Schools of Economic Thought and Methodology - - Current Heterodox Approaches - - - Socialist; Marxian; Sraffian
    • C63 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Computational Techniques
    • D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution

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