[OPE] Why markets fail

Michael P. wrote:

Markets fail for many reasons. With all the attention to the current financial crisis, the time has come to look at another part of market failure -- the reluctance to invest in long-lived plant and equipment. I'm not merely thinking about the deindustrialization of the US economy, but a more general reluctance.

I think Jan Toporowski's work on capital finance and rentier capitalism provides important clues for this development, i.e. the purpose of capital accumulation has importantly shifted emphasis from expanding production to simply extracting maximum net income from assets of any sort.

I lack a really good theory of inflation, but then so do most economists these days. Hence the economists's notion of "inflationary pressures", a sort of multi-causal approach in which a mix of variables might, or might not, cause inflation.

Jurriaan

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Received on Wed Nov 12 13:21:01 2008