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Heterodox Economics 2

Alternative Analysis to the Mainstream "Blackboard Economics</I> Based on the Concept of "Creative Mental Labor</I>

Hasan Gürak

Heterodox Economics 2 consists of articles which are complementary to the subjects presented in the book titled Heterodox Economics, published in 2012. The aim is to present alternative economic approaches based on the concept of Creative Mental Labor that are intended to make a contribution to the emergence of a new economics. The analysis throughout the book is based upon the principle that the original source of all the value added to products (considering nature as a given), is the mental and physical inputs of labor that continuously create new technologies while at the same time making use of the available technologies.

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5- Technological Progress & Growth

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147 5- TECHNOLOGICAL PROGRESS & GROWTH “Technological Productivity” and Long-term Growth Introduction The relations between growth, technological progress, productivity and labor(- er) were analyzed in other works (Gürak, 2000-a, 2000-b, 2004-a, 2004-b), in order to determine which inputs of production such as laborer, raw-materials, capital-goods, intermediaries, were regarded as “factors employed in produc- tion”. There were only “two productive factors”; “nature” and “labor(-er)”, and the latter was shown to be the only productive factor capable of producing an “exchange-value” or an “added value”. In this analysis, the same premises will be valid. Thus, given the necessary supplies of nature (raw materials) for output, the analysis will focus on the relationship between “technological pro- gress” and “economic growth”. Human labor can be analyzed into two categories; 1- mental; and 2- physical. Physical labor contributes only to a limited extent in value creation, while mental labor together with its creative ability, is the actual source in the creation of value and makes an indispensable contribution to a constantly growing productivity and global welfare. Mental labor makes its “long-term” contribu- tion by introducing “new productive knowledge” i.e., technology. This new productive knowledge which is utilized by mental and physical labor helps to transform natural supplies to produce either a "means-of-production" which in turn leads to an increase in labor productivity or is used to supply intermediary or consumption items. If mental labor had made no contribution to the ever growing pool of knowledge by incessantly introducing “new productive knowledge” (e.g., new...

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