Disk 8: A Theory of Productive Activity, Profit, and Saving – 1987
Description of Lectures below
Supplemental Material
A Theory of Productive Activity, Profit, and Saving [pdf]
Program Guide: George Reisman’s Program of Self-Education in the Economic Theory and Political Philosophy of Capitalism, Second Edition, Enlarged (including Introduction, Syllabus, and Syllabus Supplements) [pdf]
In combination, the following three series accompany Chapters 11
and 13-17 of CAPITALISM.
“Macroeconomics” focuses on the study of economic phenomena that are system-wide in their nature—for example, general business depressions, general economic progress, the general level of real wages, and the average rate of profit and interest. The currently prevailing ideas on the subject are those of Keynes and Marx. In sharpest contrast, the following three lecture series present a procapitalist approach to the subject that is inspired by the ideas of the British classical and Austrian economists and incorporates many of Dr. Reisman’s own, original contributions. They show that laissez-faire capitalism is both free of general business depressions and is characterized by a steadily rising level of real wages as the result precisely of the activities of businessmen and capitalists.
A Theory of Productive Activity, Profit, and, Saving This series makes an excellent accompaniment to Chapters 11 and 16 of CAPITALISM. It was delivered at the Jefferson School’s 1987 summer conference at the University of California, San Diego. Each of the six lectures is approximately 90 minutes long including question and answer period. A 16-page outline/summary accompanies the lectures as a supplement. Price: $49.95.
1. Basic Concepts. Definitions of such fundamental concepts as productive expenditure and consumption expenditure, capital goods and consumers’ goods. Adam Smith’s positive contribution to the concept of productive activity and his contradictory development of the conceptual framework of the Marxian exploitation theory.
2. The Marxian Exploitation Theory. Marx’s version of the labor theory of value and the “iron law” of wages. How profits are made to appear as essentially the same as the gains of slave owners. The exploitation theory as the theoretical basis of the economic policies of the contemporary “liberals.”
3. Böhm-Bawerk’s Critique of the Exploitation Theory. Exposition of the leading critique of Marx as developed by a father of the Austrian school of economics. The time preference theory of profit/interest. Böhm-Bawerk’s fundamental concessions to the exploitation theory.
4. Reisman’s Theory of Profit/Interest vs. the Framework of the Exploitation Theory. How business in the aggregate generates sales revenues greater than costs. Profits, not wages, as the original and primary form of income. Businessmen do not deduct profits from wages, but are responsible for the creation of wages, which along with other costs, are a deduction from sales revenues, all of which were originally profit. Businessmen and capitalists as the primary workers in the economic system.
5. Specific Productive Functions in the Light of the Division of Labor. The division of labor as the explanatory principle of the specific productive functions of businessmen and capitalists, the financial markets and financial institutions, retailing, wholesaling, and advertising.
6. Further Development of Reisman’s Theory of Profit/Interest. Say’s Law II: not only does production create purchasing power, but also the productive process itself is what generates monetary profitability. Radical implications for the role of saving and technological progress in the process of capital accumulation.
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