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Economic class and the distribution of income: A time-series analysis of the UK economy, 1955-2010

  • Juan Carlos Cuestas

    ()

    (Department of Economics, The University of Sheffield)

  • Bruce Philp

    ()

    (Division of Economics, Nottingham Trent University)

This paper contributes to our understanding of the determinants and dynamics of a Marxian surplus-value rate using quarterly UK data, 1955-2010, and the Johansen (1988, 1991) cointegration and vector error correction model (VECM). A conceptual model is introduced to define surplus-value and its component parts, before elaborating on theoretical issues which are important in estimating the rate. In the empirical analysis we seek to explain distributive conflict, paying attention to three forces which are traditionally seen as drivers of power in distributional struggle: (i) political party; (ii) the size of the “reserve army” of the unemployed; (iii) working class militancy. Our results suggest a positive impact of unemployment on the rate of surplus-value, and that falling working class militancy tends to raise the rate. Political party also affects the rate of surplus-value with a negative impact on the rate emanating from movement to left-wing government. This analysis demonstrates the ongoing relevance of Marxian economics in providing an alternative, robust and significant explanation of distribution in the post-war UK economy.

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File URL: http://www.shef.ac.uk/economics/research/serps/articles/2011_012.html
File Function: First version, 2011
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Paper provided by The University of Sheffield, Department of Economics in its series Working Papers with number 2011012.

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Length: 26 pages
Date of creation: Apr 2011
Date of revision: Apr 2011
Handle: RePEc:shf:wpaper:2011012
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  1. Weisskopf, Thomas E, 1979. "Marxian Crisis Theory and the Rate of Profit in the Postwar U.S. Economy," Cambridge Journal of Economics, Oxford University Press, vol. 3(4), pages 341-78, December.
  2. Gonzalo, Jesus, 1994. "Five alternative methods of estimating long-run equilibrium relationships," Journal of Econometrics, Elsevier, vol. 60(1-2), pages 203-233.
  3. Gouverneur, Jacques, 1990. "Productive Labour, Price/Value Ratio and Rate of Surplus Value: Theoretical Viewpoints and Empirical Evidence," Cambridge Journal of Economics, Oxford University Press, vol. 14(1), pages 1-27, March.
  4. Veneziani, Roberto, 2007. "Exploitation and time," Journal of Economic Theory, Elsevier, vol. 132(1), pages 189-207, January.
  5. John E Roemer, 2008. "Socialism vs Social Democracy as Income-Equalizing Institutions," Eastern Economic Journal, Palgrave Macmillan, vol. 34(1), pages 14-26, Winter.
  6. Johansen, Soren, 1988. "Statistical analysis of cointegration vectors," Journal of Economic Dynamics and Control, Elsevier, vol. 12(2-3), pages 231-254.
  7. Roemer, John E, 1982. "Exploitation, Alternatives and Socialism," Economic Journal, Royal Economic Society, vol. 92(365), pages 87-107, March.
  8. Johansen, Soren, 1991. "Estimation and Hypothesis Testing of Cointegration Vectors in Gaussian Vector Autoregressive Models," Econometrica, Econometric Society, vol. 59(6), pages 1551-80, November.
  9. Henrik Hansen & Søren Johansen, 1999. "Some tests for parameter constancy in cointegrated VAR-models," Econometrics Journal, Royal Economic Society, vol. 2(2), pages 306-333.
  10. Philip Arestis & Malcolm Sawyer, 2005. "Aggregate demand, conflict and capacity in the inflationary process," Cambridge Journal of Economics, Oxford University Press, vol. 29(6), pages 959-974, November.
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