Academic journal article Journal of Economic Issues

Uncertainty and Exploitation in History

Academic journal article Journal of Economic Issues

Uncertainty and Exploitation in History

Article excerpt

Uncertainty is a pervasive feature in monetary production economies. Different social groups experience uncertainty in different ways. An investor may be worried about the future revenue streams of alternative investment projects. A worker may worry about having a job next year. Obviously, the effects of uncertainty are mediated and shaped by the particular institutional setting of a society. One of the basic building blocks of these institutional structures is class structures. Therefore, the question arises how class relations and the distribution of uncertainty are related.

Uncertainty is a key category in (at least some versions of) Post Keynesian theory. The concept of (fundamental) uncertainty highlights the challenges individuals face in making decisions, which are due to the historical openness of social and economic processes. Similar to Marxists, some Post Keynesians use class analysis in macroeconomic analysis. (1) However, Marxian economics is unique in combining class analysis with the notion of exploitation. Society is composed of different classes that fulfill different functions in the production process. Most modes of production are based on exploitation: there exists a class that is performing surplus labor and another one that is appropriating this surplus labor.

This paper explores the boundaries and overlaps of these key concepts of Post Keynesian and Marxian economics. As specific institutions mediate the effects of uncertainty, a deeper understanding of the significance of the concepts involved requires a historical approach. Rather than a general discussion in abstract terms, the question what the relation between uncertainty and the class Structures is, will be investigated at the more specific level of different modes of production. The interrelation between exploitation and the distribution and nature of uncertainty will be analyzed for the capitalist, feudal and slave modes of production.

The presumption of this paper is that different schools in heterodox economics are potentially complementary and could benefit from interaction and cross-fertilization. The cross-fertilization explored here is between Post Keynesian and Marxian concepts. In fact, both strands of economic thought share a similar historical (path-depended) approach toward economic analysis (Setterfield 2003, 371ff.). Similarly, both analyze the capitalist system as a monetary production economy. The aim here is to investigate how these common methodological elements can be transformed into a fruitful analysis on a more concrete level. To be clear, this paper does not offer a Grand Synthesis. In particular, little effort is made at this stage to address the potential methodological and theoretical problems that the use of concepts rooted in different theoretical approaches raise. Rather we wish to illustrate that cross-fertilization, can be a fruitful enterprise that yields genuine insights.

A clarification is necessary at the outset. We concentrate on stylized modes of production rather than on the description of existing societies. The configurations are analyzed for three modes of production: capitalism, feudalism and slavery. By design, these modes of production eliminate much of the actual historical complexity to clarify key features of an economic and social system. These stylizations do have specific historical epochs in the background on which generalizations are based. It will therefore be helpful to make these explicit. In the analysis of capitalism, we follow standard Marxian analysis and thus adopt a focus on the capitalist system of the 19th century. The feudal mode of production that is discussed is that of Western Europe in the 10th to 12th century. The notion of slavery refers to its appearance in the 1st and 2nd century Roman Empire in the area of today's Italy. Overall, the modes of production analyzed do not claim historical accuracy, but are to be understood as ideal types. …

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