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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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6-The Neoclassical Marxists


Introduction At the time of Marx, he and many other economists considered labor, in one form or other, given whatever natural resources that were used, to be the origin of all created value. Nothing could be produced without labor's contribution. Thus, every commodity produced could be seen simply as a function of the labor time spent on the natural resources that they used. As William Petty asserted: “Labor was regarded as the father of (material) wealth, while the earth its mother.” (in Marx,Vol. I,pp.133-134) With the rise of the Marginalist theory around the 1870s, the approach to the status of labor began to change radically. An ideological struggle against the Marxist's claims provided new premises in economics based on "objective scientific" methodology which led to attempts which claimed to put economics on the same analytical plane as Newtonian mechanics. These new analytical methods suggested that economics ought to be as scientific as astronomy in its precision and its ability to make accurate predictions. In- deed, these attempts succeeded in making economics a “pure” science which became known as "Neoclassical Economics". But, unfortunately, it paid the price of drifting away from the real world and the actual transactions that take place within it. As the Nobel Laureate Ronald Coase once stated, eco- nomics became “blackboard economics” (Coase; 1991,p.4). Newtonian mechanics has undergone significant changes since then, but its economic “imitators” remained loyal. Growth and microeconomic theories are still dominated by the neoclassical parable. As in all other parts...

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