Pt Fli Vi A tiPeter Fleissner, Vienna, Austriapeter.fleissner.org/Transform/IIASA2011.pdf · do not add anything neither to the surplus product nor to the surplus value. This creates

International Institute for Applied Systems Analysisfor Applied Systems Analysis

Laxenburg Castle, Raiffa Room10. Mai, 10:30 am

Reconstructing the Economy

by Means of Input‐Output Methodsby Means of Input Output Methods

P t Fl i Vi A t iPeter Fleissner, Vienna, Austria

Background: Cycle of Change

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– Cooperative evaluation/selection/decisionCooperative evaluation/selection/decision processes

– Implementation of results into practice


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How to analyse the economy? (1/3)F h i i f l i l i d i i• From the viewpoint of neo‐classical economics decisionsare done by economic agents on the basis of maximizingi i l P fi i i i f fi ili i i iprinciples: Profit maximization of firms, utility maximization

of consumers. Markets are always efficient distributionh i th t t i il N t imechanisms, the state is seen as necessary evil. Nature is

widely neglected. The view is „flat“ and ahistorical.

• From the perspective of an evolutionary economist the contemporary economy is the result of a process of historical development which shaped the logical structure of the system. It is seen as a metabolic process between nature and society. Goods represent humanized nature transformed by human work.

How to analyse the economy? (2/3)

• The economy is seen here as a complex evolving socio‐technical system of production, distribution and consumption interacting with „nature“

• Distribution mechanisms allocate economic resources:Distribution mechanisms allocate economic resources:– markets create information on the relative position of individual participants vs. social average => primary distribution. If they are p p g p y ycompetitive they increase effectivity of production.

– The state (guided also by extra‐economic forces) modifies income and wealth distribution => secondary distribution.

How to analyse the economy? (3/3)

• Main method: Creating Layers of Various Degrees of Abstraction. – The kind of abstraction is inspired by insights into history and the logic of the field.

– For logical reasons we take goods (use values) produced under the existing division of labor as the most abstract layer.

• Layers of high degrees of abstraction do not necessarily correspond to observed data, but they grasp essential aspects of reality.– Analogy to physics: The Law of Gravitation (all bodies fall with the same rate of acceleration) is contrary to evidence (compare the fall of a feather and a coin).

Economic Reality – A Complex Constructionmarket prices7 C t C it li market prices

(observed)Information Society: information as commodity communication as commercial service

commodificationof information

7

6

Contemporary Capitalism

Public sector taxes, subventions

transfers, social insurance

information as commodity, communication as commercial service goods/services5

markets for money,credit stocks derivatives


Globalized economyInternational financial capital4

prices of productionlabor market

credit, stocks, derivativesp

Capitalism with perfect competitionand fixed capital3

exchange values

labor market

Commodity productionof self employed

and fixed capital3

2

use values environmental issues

exchange valuesprices ~ labor values

commodity/service marketsof self employed

Physical

2

use values, environmental issuesmeasured by mass, exergy or ecological footprint basis1

Economic Reality – A Complex Constructionmarket prices7 Contemporary Capitalism market prices

(observed)commodification

of information

7

6 Information Society: information as commodity communication as commercial servicePublic sector

taxes, subventionstransfers, social insurance

goods/services5

information as commodity, communication as commercial service







exchange values

labor market


and fixed capital3

2




Physical

2


Layer 1: Use values, produced and consumed under a certain division of labor• Mathematical description in terms of Leontief’s input-output scheme to

represent the economy in terms of use values. • Each row and each column represent one branch of production or firm

It fl t th d f di i i f l b• It reflects the degree of division of labor. • The matrix of technical coefficients A represents the technology of the

economy. The element aij gives the amount of goods of industry i needed to produce one unit of output of industry jto produce one unit of output of industry j.

x (output vector) contains all use values produced. It can be split by kind of use of goods into Ax (demand for intermediate goods) and y (final demand)use of goods into Ax (demand for intermediate goods) and y (final demand). The following famous formula is called the primal problem

Ax + y = xAx + y xy (final demand) can be split it into c (consumption) and s (surplus product = capital investment)

y = c + s.y c s.or in matrix notation

Ax + Cx + Sx = x ,where C, and S represent matrices of consumption coefficients and surplus p p pcoefficients respectively.

Economic Reality – A Complex Constructionmarket prices7 market prices

(observed)

Information Society: commodificationof information

7

6Contemporary Capitalism










exchange values

labor market


and fixed capital3

2




Physical

2


Layer 2: Labour values, small commodity production

The dual Leontief model deals with the unit prices

pA + q = pp …row vector of unit prices q … unit value added. After substitution of q by life unit labor input l we get the basic formula

Production Consumptionhow to compute Marx’ labor values vvA + l = v.

We can split l into wages, w, and fit d t

Labor

C diti

profits π and getl = w + π.

Marx used different symbolsW C + V + M

Self‐employed laborersMoney

Commodities&

Services

W = C + V + M,where W is the labor value, • C constant capital, • V variable capital and• V variable capital and • M surplus value. In our notation:

v = vA + w + πv = vA + w + π.

Structure of „classical“ labour values all industries are value producers

i l i bl i l l lc ‐ constant capital, v ‐ variable capital, m ‐ surplus valueAustria 2003: 57 industries (percent), r= 0.883

m

v

c

Stucture of gross output (observed) c ‐ constant capital, v ‐ variable capital, m ‐ surplus value

A t i 2003 57 i d t i ( t)Austria 2003: 57 industries (percent)

m

v

c

29 Recycling30 Electricity, gas, steam and hot water supply31 Collection, purification and distribution of water

Nr Industry1 Agriculture, hunting2 Forestry, logging3 Fishing, fish farms , p

32 Construction33 Sale and repair of motor vehicles; automotive fuel34 Wholesale and commission trade35 Retail trade repair of household goods

3 Fishing, fish farms4 Mining of coal and lignite5 Extract. o. crude petrol. a. nat. gas, min. o. metal ores6 Other mining and quarrying7 Manufacture of food products and beverages 35 Retail trade, repair of household goods

36 Hotels and restaurants37 Land transport; transport via pipelines38 Water transport39 Air transport

7 Manufacture of food products and beverages8 Manufacture of tobacco products9 Manufacture of textiles

10 Manufacture of wearing apparel11 Manufacture of leather leather products footwear 39 Air transport

40 Supporting a. auxiliary transport activities; travel agencies41 Post and tele-communications42 Financial intermediation, except insur. 43 Insurance and pension funding except social security

11 Manufacture of leather, leather products, footwear12 Manufacture of wood and of products of wood13 Manufacture of paper and paper products14 Publishing, printing and reproduction15 Manufacture of coke refined petroleum products 43 Insurance and pension funding, except social security

44 Activities auxiliary to financial intermediation45 Real estate activities46 Renting of machinery and equipment without operator47 Computer and related activities

15 Manufacture of coke, refined petroleum products16 Manufacture of chemicals and chemical products17 Manufacture of rubber and plastic products18 Manufacture of other non-metallic mineral products19 Manufacture of basic metals 47 Computer and related activities

48 Research and development49 Other business activities50 Public administration; compulsory social security51 Education

19 Manufacture of basic metals20 Manufacture of fabricated metal products21 Manufacture of machinery and equipment n.e.c.22 Manufacture of office machinery and computers23 Manufacture of electrical machinery and apparatus n e c 51 Education

52 Health and social work53 Sewage and refuse disposal,sanitation and similar act.54 Activities of membership organizations n.e.c.55 Recreational cultural and sporting activities

23 Manufacture of electrical machinery and apparatus n.e.c.24 Manufacture of radio, television equipment25 Manuf. of medical, precision, optical instruments, clocks26 Manufacture of motor vehicles and trailers27 Manufacture of other transport equipment 55 Recreational, cultural and sporting activities

56 Other service activities57 Private households with employed persons

27 Manufacture of other transport equipment28 Manufacture of furniture; manufacturing n.e.c.

Special problem

Simple and complex laborSimple and complex labor

Is there a difference in the labor values with respect to the level of formal qualification?p f f q f

ISCED „International Standard Classification of Education“ A typology for education systemsprovided by UNESCO p y

Formale Bildung Wirtschaftszweig

1 Universitäten und Hochschulen

2 Fachhochschulen

A, BLand- und Forstwirtschaft & Fischerei und Fischzucht

CBergbau und Gewinnung von Steinen und Erden

D Sachgüter-erzeugung2 Fachhochschulen

3 Berufs- und lehrerbildende Akademie

g g g

EEnergie- und Wasser-versorgung

F Bauwesen

Handel; Instandhaltung und

4 Kollegs und Abiturientenlehrgänge

5 Berufsbildende höhere

G

; gReparatur von Kraftfahrzeugen und Gebrauchsgütern

HBeherbergungs- und Gaststätten- wesenVerkehr und Nachrichten-5 Schule

6 Allgemein bildendehöhere Schule

I übermittlung

JKredit- und Versicherungs-wesenRealitätenswesen, Unternehmens- bezogene

7 Berufsbildende mittlereSchule

8 Lehrlingsausbildung

K DienstleistungenL Öffentliche VerwaltungM Unterrichts-wesen

NGesundheits-, Veterinär- und Sozialwesen8 Lehrlingsausbildung

9 Allgemein bildendePflichtschule O

Erbringung von sonstigen öffentlichen und persönlichen Dienstleistungen

P Private Haushalte

Wieviel ist die Bildung wert? Statistische Ergebnisse (Österreich 2003)Quelle: Bakkarbeit von MichaelSchlegel und Christian Szolarz : Volkswirtschaftliche Gesamtrechnung mit Input‐Output‐Tabellen unterBerücksichtigung der Kompliziertheit der Arbeit, Wien 2008

Special problem: What about services?Adam Smith distinguished between productive and non productive laborAdam Smith distinguished between productive and non‐productive labor.

Human work can result in two different types of values in use with completely different economic effects

• Material ProductsThey continue their existence after the act of production is finished

• ServicesThey disappear during the act of consumption. Services cannot be sold t i i th k t Th t ith b t d l t d Thtwice in the market. They cannot neither be stored nor accumulated. They do not add anything neither to the surplus product nor to the surplus value.

This creates a contradiction with the basic assumption of the labor theory of value: Equal exchange. Unequal exchange would be the consequence.

There is a solution to get rid of the contradiction by evaluating services atThere is a solution to get rid of the contradiction by evaluating services at reproduction cost (without associating any surplus value to them).

See: http://peter.fleissner.org/petergre/documents/Wirtschaft&Gesellschaft.pdfl ( ) b f h k d b l h ( fFleissner, P. (2008): Marx begegnet Leontief ‐ Neuere Gesichtspunkte der Arbeitswertlehre (Marx meets Leontief

‐ New Aspects of the Labour Theory of Value) Wirtschaft und Gesellschaft: 34. Jahrgang, Heft 3, 361 ‐ 396

http://peter.fleissner.org/petergre/documents/Wirtschaft&Gesellschaft.pdf

Structure of labour values material production produces value

i l i bl i l l lc ‐ constant capital, v ‐ variable capital, m ‐ surplus valueAustria 2003: 57 industries (percent), r= 0.802

mm

v

v

v

ccc

The Economy – seen as a self organization process (historical and logical view)

market pricesmarket prices(observed)

Information Society: information as commodity communication as commercial service


7

6


Public sector information as commodity, communication as commercial service goods/services

5

Globalized economyInternational financial capital4 p

Capitalism with perfect competitionand fixed capital

4

3

Logic


and fixed capital3

2

c: Dom

inaof self employed

Physical

2 ance

Inspired by: Hofkirchner , W. (2002): Projekt Eine Welt: Kognition –Kommunikation – Kooperation.LIT-Verlag Münster-Hamburg-London p 166

basis1

History: Emergence

London. p. 166

Layer 3: prices of production, capitalist economy at perfect competitionp

CapitalInvestment

Production ConsumptionInvestment

Labor

capitalists workers

Commodities&

S icapitalists workers

Wages

Services

Profits

Layer 3: prices of production, capitalist economy at perfect competition („Transformation Problem“)p („ )

Marx provided us with the following solution for p:p = v (K + A + C) (1 + r), where r = v (I - A - C) x / v (K + A + C) x

( ) 1and v = l (I – A)-1

K…matrix of capital coefficients per unit of output, I …identity matrix with ones in its main diagonal, otherwise zeros, and r is the average rate of profit.

This method can be generalized to an iteration process which leads us to the solution proposed by von Bortkiewicz in the beginning of the 20th century (which is equal to the solution of an eigenvector/eigenvalue problem) The generalizedis equal to the solution of an eigenvector/eigenvalue problem). The generalized iteration scheme inspired by Marx is:

pi (K + A + C) (1 + ri) = pi+1 where ri = pi (I - A - C) x / pi (K + A + C) x,r average profit rate at iteration step i (Different turnover times neglected andri … average profit rate at iteration step i. (Different turnover times neglected,and assume they are all equal to one.

The link to labor time is kept up because the iteration scheme starts from theThe link to labor time is kept up because the iteration scheme starts from the solution of equation (3) for v

p0 = v = l (I – A)-1, where r0 = p0 (I - A - C) x / p0 (K + A + C) xp0 v l (I A) , where r0 p0 (I A C) x / p0 (K A C) x

Geometric interpretationof input‐output indicators3 of input output indicators

x

3

hyperplane of all

w

x yp ppossible non-negative price systems

p

wp x = const

value of total

pp, prices of production

turnover is invariant

O2

11

Marx‘ solution: Prices of productionc ‐ constant capital, v ‐ variable capital, m ‐ surplus value

Austria 2003: 57 industries (percent), r=0.901

m

v

c

von Bortkiewicz: Prices of productionc ‐ constant capital, v ‐ variable capital, m ‐ surplus value

Austria 2003: 57 industries (percent) r=0 952Austria 2003: 57 industries (percent), r=0.952

m

v

c

Stucture of gross output (observed) c ‐ constant capital, v ‐ variable capital, m ‐ surplus value

A t i 2003 57 i d t i ( t)Austria 2003: 57 industries (percent)

m

v

c

Transformation problem iterative solution 2003 Video

Correlation coefficient between actual prices and production prices (i-th iteration)

Iteration Correlation

iterative solution 2003

0,96

0,981 0,80200000

2 0,90131617

3 0 94169690

0,92

0,943 0,94169690

4 0,95211631

* 5 0,95373425

0,88

0,9

0,95373425

6 0,95349443

7 0,95306224

0,84

0,868 0,95273999

9 0,95253944

0,8

0,82

1 2 3 4 5 6 7 8 9 10 11

10 0,95242360

11 0,95235923

m m

Prices of production (Layer 3, Marx)Labour Values (Layer 2)

v

m m

cc

v

m m

Observed data (Layer 7)Prices of production (Layer 3, von Bortkiewicz)

v v

c c

Empirical Test:Gross output, labour value, prices of production (with and without fixed capital K)

i A i 2006 57 S (Mi EUR)in Austria 2006: 57 Sectors (Mio EUR)

Labour ValuesPrices of Prod (without K)

Gross output (observed)Prices of Prod (with K)

Correlations of various price systemswith observed I O datawith observed I‐O data

(Austria 2003 and 2006, 57 sectors)

YearLabourValues

LabourValues

ProdPrices

ProdPricesBortkiewicz

ProdPricesBortkiewiczYear Values

(classic)Values

(material)Prices(Marx)

BortkiewiczwithoutFixKap

Bortkiewiczwith FixKap

2006 0.819 0.710 0.832 0.941 0.862

2003 0.883 0.802 0.901 0.952 ‐

Special problem: A less abstract solution of the transformation problemof the transformation problem

• Marx‘ and von Bortkiewicz‘ transformation of prices from small commodity producers (labor values) towards competitive capitalisms (pricesvalues) towards competitive capitalisms (prices of production) is very abstract => one unique solutionsolution

• Less abstract version: Allows for changes in the amounts of goods by including demand functions (reflects both, marginal utility theory ( , g y yand Marx‘ value theory) => two solutions(see http://peter.fleissner.org/Transform/Transformation Problem Beijing2.pdf)( p //p g/ / _ _ j g p )

http://peter.fleissner.org/Transform/Transformation

Solving a more concrete transformation problem• Utility function: Nj = d1j log( C1j )+ d2j log( C2j )+ lamdaj ( wj – p1 C1j – p2 C2j ) j = 1 2Utility function: Nj d1j log( C1j )+ d2j log( C2j )+ lamdaj ( wj p1 C1j p2 C2j ), j 1,2

• Simple demand function: Cij = vj xj bij / pi = diag‐1(p) B diag(v) diag(x)

• Price equation with 2 sectors : p / [ p a + p a + v (b + b )] = p / [ p a +Price equation with 2 sectors : p1 / [ p1 a11 + p2 a21 + v1 (b11 + b21)] = p2 / [ p1 a12 + p2 a22 + v2 (b12 + b22)]

• Direct algebraic solution or iterative solution results in two solutions for prices and volumes

∆xi+1 = - ( f( xi ) - xi )∆xi+1 ( f( xi ) xi )

∆xi+1 = f( xi ) - xi

x2 x0 x1 x1

x2 x0 x1 x1

Two solutions of a more concrete transformation problem

(1) (1) (2) (2) (3) (3) (4) (4) (5) (5)sector1 sector2 sector1 sector2 sector1 sector2 sector1 sector2 sector1 sector2

Labour Production Production Two solutions of the values prices prices “concrete”

Marx Bortkiewicz transformation problem

unit prices 10 1 10,417 0,958 10,539 0,946 10,494 0,941 3,641 0,308volumes 10 100 10 100 10 100 9,928 101,78 21,835 390,69turnover 100 100 104,17 95,83 105,39 94,61 104,18 95,82 79,50 120,50

profit rates 1 000 1 174 1 083 1 083 1 139 1 139 1 128 1 128 0 221 0 221profit rates 1,000 1,174 1,083 1,083 1,139 1,139 1,128 1,128 0,221 0,221

labour 70 70 70 70 70 70 69,49 71,25 152,84 273.48wages 20 16 20 16 20 16 19,85 16,28 43,63 62,46consumptn.matrix

0,83311,67

0,6679,333

0,83311,67

0,6679,333

0,83311,67

0,6679,333

0,78812,305

0,64710,093

4,99882,589

7,15118,22

utility 1,357 1,134 1,357 1,134 1,357 1,134 1,365 1,167 3,245 3,604




7

6











exchange values

labor market


and fixed capital3

2




Physical

2


Layer 4: Financial sphere added

CapitalInvestment

Production ConsumptionInvestment

Labor

capitalists workersWages

Commodities&

Services

Profitscapitalists Services

credits credits

Financial capitalfinancialearnings

financialearnings

Layer 4: Financial sphere

I L 3 th f ll i ilib i diti dIn Layer3 the following equilibrium conditions were assumedWages equal consumption: wx = pCx = pc

Profits equal capital investment: πx = pSx = ps.If we want to reflect money explicitly in the economy, we need to get rid of such equilibria. Therefore we replace them by the following savings equations:Money savings/increase of debt of households, shh , are given by the followingMoney savings/increase of debt of households, shh , are given by the following

relations shh,t = w t – 1’C t + rl ,t mhh,t if mhh,t > 0s = w 1’C + r t m if m < 0shh,t = w t – 1 C t + rb,t mhh,t if mhh,t < 0

m…money stocks, rl …interest rate for lending money to banks, rb … interest rate for borrowing, rl < rb

Si il l h i /i f d bt f fi lt fSimilarly, we have money savings/increase of debt of firms, sf , as a result of profits, minus capital investment and borrowing/lending money (time indices suppressed)

sf = π – 1’S + rl mf if mf > 0sf = π – 1’S + rb mf if mf < 0

Layer 4: Financial sphere

Th fi i l t /d bt f fi h h ld d t t h ld b thThe financial assets/debts of firms, households and state are held by the banks. Assets are rewarded by banks with an interest rate r_borrowing, credits have to be paid for with an interest rate r_lending (r_lending > r_borrowing). The payments of interest are deducted from / added to the surplus variables orThe payments of interest are deducted from / added to the surplus variables or wage income. Of course, the redistribution does not change the amount of total GDP.

In this simplified version the income of banks is given by the sum of all interest payments of all sectors including the household and government sectors minus

ll i t t t f th b k f d it f fi h h ld fall interest payments of the bank for deposits of firms, households of government (if any):

{ -rl mhh. (if mhh. > 0) -rl mf. (if mf. > 0) }

xbanks = Σ. + { -rb mhh. (if mhh. < 0) -rb mf. (if mf. > 0) }

Including a financial sector creates a secondary distribution of income.g y

Layer 4: Dynamic equations of physical and financial capital/debt

The dynamics for physical capital is given byK t+1 = K t + S = K t + (S - Sd)K a,t+1 K a,t Sn K a,t (S Sd),

where Sn is the matrix of net capital investment per time unit, and Sd the scrap matrix (or depreciation matrix) of capital. The relation between gross and net investment is given bynet investment is given by

Sn = S - Sd

The money capital stock of firms, banks and the government debt can be represented by a row vector mf,t , the one of households by mhh,t

Money(+)/Debt(-) stocks of households, mhh,t , at time t, is given by: mhh,t+1 = mhh,t + shh,t

Money(+)/Debt(-) stocks of firms, mf,t, at time t: mf,t+1 = mhh,t + sf,t

Layer 4: Modified Production Function

To be able to deal with problems related to limited resources an alternative production function to the Cobb-Douglas or CES type is needed. One step is to p g yp pextend the group of the usual input variables, Capital and Labor, towards the intermediary products. If there is real shortage no substitution is possible immediately, therefore a linear limitational type of production function is proposed

y = min ( alfaK * xK , alfaL * xL , alfa1 * x1 , …., alfan * xn ) * TEy min ( alfaK xK , alfaL xL , alfa1 x1 , …., alfan xn ) TE

If there is no limitation for the inputs, the function shows constant returns toscalescale.As we know from the input-ouput data the investment matrix (matrix of thesurplus product) we can determine net capital investment by subtractingdepreciation From this we can forecast the growth of the capital stock for eachdepreciation. From this we can forecast the growth of the capital stock for eachbranch of production. The first approximation to predict the output could beextensive growth of fixed capital stock. Usually the output y deviates fromempirical values the residual could be called technical effect TEempirical values, the residual could be called technical effect TE.




7

6











exchange values

labor market


and fixed capital3

2




Physical

2


Layer 5: public sector added

Produktion KonsumInvestition

ArbeiterInnenAngestellte

Unter‐nehmerInnen

Industrie‐Profite

Löhne Gehälter

financial financial

credits credits

Financial capitalfinancialearnings earnings

Taxes Taxes

Public sector

subsidies transfers

Layer 5: Real capital, financial capital, and the public sector

For a simplified mathematical model one could include the following variables to represent activities of the state :p

• t_ind tax rate of indirect taxes• t_profits tax rate of profits• t_wages tax rate on wages• indirect taxes• direct taxes (wage tax, profit tax)• public consumption• public investment• contributions to the social insurance system

t f t h h ld• transfers to households• subsidies to enterprises•Including a public sector creates a tertiary distribution of incomeIncluding a public sector creates a tertiary distribution of income




7

6







Globalized economyInternational financial capital

4




3

exchange values

labor market


and fixed capital

2

use values



Physical 1 use valuescollective production/appropriationbasis

Layer 6: Capitalistic Information Society: Commodification and Commercialization of cultural activities

• As already has happened in history with land and work, under theheadline of „information society“ the market conquers the sector ofcultural activities writing singing dancing chatting performing anycultural activities, writing, singing, dancing, chatting, performing anykind of arts, doing research etc.

• This is done by an efficient interaction of the economy, technologyd land law.

• Technology allows for freezing volatile information on a carrier ofdigital or analogue data and also reviving it. It transforms culturalactivies into information goods, knowledge goods and cultural goods.

• By Law (e.g. Intellectual Property Rights) copying is forbidden withoutpayment. Therefore all the characteristic properties of commoditiesyare created and can be exploited by private capital.

• Three kinds of new markets have been established:• A market of data carriers with content (CDs DVDs tapes etc)• A market of data carriers with content (CDs, DVDs, tapes etc)• A market of communication services (mobile communication,

Internet)• A market of devices (PCs, Laptops, TV-sets etc)

Layer 6: Information Society: A bifurcation towards a Global Sustainable Information Society becomes possible

According to Hofkirchner (2010 Casteldefels) aGlobal Sustainable Information Society is(1) ‘able by means of ICTs to make use of knowledge ("information" society)(1) able by means of ICTs to make use of knowledge ( information society), (2) capable to act upon the dangers of anthropogenic breakdown ("sustainable" society)(3) existent on a planetary scale (hence "global" society).’Wh t t t k thi h ?What steps are necessary to make this happen?• Imho it is not only a question of capabilities, but also of the willingness to act

cooperatively and in favor of the majority of people => transforming democracy• => transforming Human Rights: To fulfill them has to become an obligation to

society. Universal access to ICTs should become a Human Right (this implies not onlyUniversal access to ICTs should become a Human Right (this implies not onlytechnical means but also training)Intellectual Property Rights on information goods have to be limited towardsa period of a few years After that free access is guaranteda period of a few years. After that free access is guaranted.

• Institutions have to be built which allow decisions to control the use of natural andhuman resources in the interest the common good => transforming the allocationand use of resources and wealthand use of resources and wealth




7

6







Globalized economyInternational financial capital

4




3

exchange values

labor market


and fixed capital

2




Physical 1 use values, environmental issuesmeasured by mass, exergy or ecological footprint basis

Layer 7: The Full Picture: Contemporary Capitalism

T i t th t f t it li d i i tTo approximate the system of contemporary capitalism, a dynamic input output model on stylized facts was constructed on two JAVA-based simulation platforms: ANYLOGIC (proprietary) and FABLES (free of charge) As a next step the model will be filled with actual datacharge). As a next step the model will be filled with actual data.

The following control variables allow for a change of the distribution of value added:value added:

• r_b interest rate for credits• r l interest rate for assets at banksr_l interest rate for assets at banks• t_ind tax rate of indirect taxes• t_profits tax rate of profits• t wages tax rate on wages_ g g• deprec_rate depreciation rate (for the moment related to

output, not to fixed capital).• leverage_factor limits the maximum amount of credits given by g g y

banks with respect to their financial assets.• fraction of public investment on total investment

Dynamic I‐O Model with stilyzed facts includesprimary and secundary distribution with banks and state

financial and physical stocks, capital stocksfinancial and physical stocks, capital stocks

FABLESFABLES

Two interest rates, three tax rates,prices are variable

Source: Robert U. Ayres and Peter Fleissner (2009):and Peter Fleissner (2009):A Simple hybrid 6 sector I-O model. International Institute of Applied Systems Analysis, IIASA, Laxenburg. mimeoLaxenburg. mimeo

Output, savings, prices of six sectors of the economy and savings of households (preliminary results)

Capital stock and money/debt stock of each of the six sectors of the economy and of households (preliminary results)y p y

Thank you for your attention

Contact:

fleissner@arrakis [email protected]

http://transform.or.at

http://www.arrakis.es/~fleissner/

http://transform.or.at

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Economic Reality – A Complex Construction References

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Documents

Pt Fli Vi A tiPeter Fleissner, Vienna, Austriapeter.fleissner.org/Transform/IIASA2011.pdf · do not add anything neither to the surplus product nor to the surplus value. This creates