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Neoclassical economics has been criticized from various angles by
orthodox schools. The same can be said about its particular branch:
the theory of the firm. This book demonstrates how a successful
theory of the firm can be presented without flawed notions of a
neoclassical framework and used to comprehend actual business
history. The author argues that we should start from the assumption
that businesses are inevitably imponderable, as that is their
nature, in the process of economic evolution. The book offers an
in-depth exploration of neoclassical limitations by examining each
of the small details associated with the famous MR = MC rule. It
follows a step-by-step approach, which starts off with neoclassical
assumptions and then moves into more empirically sound theory,
based on modeling logic and rooted in real world examples. The
author presents a novel discussion on the size of the firm, both in
terms of classifying a firm's expansion and about the factors that
limit the size of the firm and argues how formal pricing theory can
be built using more indeterminate assumptions about firms. Further,
there is a discussion on how firms are rooted in amorphous
industries, which helps to explain economic progress better by
emphasizing the importance of economic experiments, mistakes and
bankruptcies. This is a valuable reference for scholars and
researchers who are interested in a range of topics from
microeconomics, through pricing theory to industrial organization,
history of economic thought and managerial economics.
Neoclassical economics has been criticized from various angles by
orthodox schools. The same can be said about its particular branch:
the theory of the firm. This book demonstrates how a successful
theory of the firm can be presented without flawed notions of a
neoclassical framework and used to comprehend actual business
history. The author argues that we should start from the assumption
that businesses are inevitably imponderable, as that is their
nature, in the process of economic evolution. The book offers an
in-depth exploration of neoclassical limitations by examining each
of the small details associated with the famous MR = MC rule. It
follows a step-by-step approach, which starts off with neoclassical
assumptions and then moves into more empirically sound theory,
based on modeling logic and rooted in real world examples. The
author presents a novel discussion on the size of the firm, both in
terms of classifying a firm's expansion and about the factors that
limit the size of the firm and argues how formal pricing theory can
be built using more indeterminate assumptions about firms. Further,
there is a discussion on how firms are rooted in amorphous
industries, which helps to explain economic progress better by
emphasizing the importance of economic experiments, mistakes and
bankruptcies. This is a valuable reference for scholars and
researchers who are interested in a range of topics from
microeconomics, through pricing theory to industrial organization,
history of economic thought and managerial economics.
The comparative analysis of socialist and capitalist economic
systems has given rise to a voluminous literature in the history of
economic thought, yet detailed analysis of the "market socialism"
model, which seeks to imitate the functional efficiency of
capitalism by simulating a competitive economy, has been relatively
neglected. In this work, Mateusz Machaj seeks to redress this
imbalance by providing an in-depth examination of one of the
defining issues that separates capitalism from socialism - the
system of ownership, or property rights - which, when explored,
highlight fundamental problems in the market socialism model.
Taking a broadly Austrian perspective, he shows that the mechanism
of efficiency in market socialism is unable to play the part
ascribed to it by its theoreticians, because it disregards the fact
that property rights are fundamental to the shaping of prices and
thus the abolition of ownership in market socialism makes its
mechanism of efficiency a fiction. Indeed, the author argues, the
economic terms used in the model of market capitalism only mirror
the names of the real economic variables that cause capitalism to
be efficient, not their functions. The books offers new and
original insights into the theory of competition, theories of
pricing, property laws, the relation between law and economics, as
well as the economics of the market socialism model. It will be of
interest to a wide range of heterodox economists.
Is macroeconomic equilibrium possible under capitalism? How do
economic bubbles develop? How does a monetary system influence the
market mechanism? Is the return on capital a beneficial feature of
the economic system? How does complexity of a capitalist
organization influence the market process? Can output under
capitalism be easily measured and modeled? Such questions and many
others relate to the central concept discussed in the book:
heterogeneous structure of production, an envisioned theoretical
connection between stages of the capitalist process. An inquiry
into the functioning of a capital structure is necessary to
understand the workings of the interest rate, savings, aggregate
demand, and economic growth. Additionally it provides a theoretical
framework to recognize consequences of monetary regimes and
interest rate policies performed by the central banks. Capital
structure concepts have their place at the center of economic
theory as they can provide a broad range of insights into our
understanding of the real world. Money, Interest, and the Structure
of Production offers key insights in that direction.
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