What is the Source of Profit and Interest? A Classical Conundrum Reconsidered

Gunnar Tomasson and Dirk Bezemer ()

MPRA Paper from University Library of Munich, Germany

Abstract: Classical political economy was underpinned by a shared view of the economy as a circular flow. This begged the question of how the value of produce can exceed the value of factor inputs: the ‘Profit Puzzle’. In this paper we advocate an understanding of the Profit Puzzle as a monetary paradox arising from Say’s Law. We trace how Classical, Keynesian and Neoclassical economists addressed the Puzzle. We suggest a solution based on the work of Bentham.

Keywords: Circular Flow; Say's Law; Profit; Credit; Marx; Schumpeter; Keynes (search for similar items in EconPapers)
JEL-codes: B12 E44 (search for similar items in EconPapers)
Date: 2010-01-29
New Economics Papers: this item is included in nep-his and nep-hpe
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Citations: View citations in EconPapers (24)

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https://mpra.ub.uni-muenchen.de/20320/1/MPRA_paper_20320.pdf original version (application/pdf)
https://mpra.ub.uni-muenchen.de/20371/1/MPRA_paper_20371.pdf revised version (application/pdf)
https://mpra.ub.uni-muenchen.de/20557/1/MPRA_paper_20557.pdf revised version (application/pdf)
https://mpra.ub.uni-muenchen.de/21292/1/MPRA_paper_21292.pdf revised version (application/pdf)

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