Marx Meets Keynes in the Classroom: Teaching a Simple Model of Modern Capitalism
Corrado Andini ()
Review of Political Economy, 2020, vol. 32, issue 3, 414-432
This paper presents a pedagogical model of the way modern capitalism works, which can be taught by using one single graph. Specifically, we extend earlier research by introducing features of the monetary theory of production [Graziani 1994. La Teoria Monetaria Della Produzione. Montepulciano: Editori del Grifo; Graziani 2003. The Monetary Theory of Production. Cambridge: Cambridge University Press] and distribution [Pivetti 1991. An Essay on Money and Distribution. London: Macmillan] into an existing model of the principle of effective demand [Andini 2009. ‘Teaching Keynes’s Principle of Effective Demand Within the Real Wage Vs. Employment Space.’ Forum for Social Economics 38 (2–3): 209–228.]. The resulting framework can be used for teaching a number of relevant economic propositions, which are consistent with the Marxian/Keynesian tradition in political economy. Among these, it is argued that both labour exploitation and ‘final finance’ loans play a fundamental role for the capitalist system to be money-profitable on aggregate.
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