Abstract
Comparing capitalism and socialism, it is important to remember that no actual economy is purely one type or another: all are mixtures bearing traces of their national histories, international relations and political compromises. Nevertheless, analytical study is best carried out at an abstract level in terms of pure types; prominent features of actual economies will be identifiable as belonging to one system or another and the logic of these features can be traced in the abstract system of which they are a part, where they have free play and full scope. We will treat capitalism and socialism as such abstract systems, and in doing so will draw on a central theme of Kaldor’s later years, the distinction between ‘demand-constrained’ and ‘resource-constrained’ systems, developed implicitly by Kalecki, but first explicitly defined by Kornai. This distinction requires replacing the scarcity-based theory of value with a Classical approach in which manufacturing prices are largely invariant to changes in demand.
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© 1991 Edward J. Nell and Willi Semmler
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Nell, E. (1991). Capitalism, Socialism and Effective Demand. In: Nell, E.J., Semmler, W. (eds) Nicholas Kaldor and Mainstream Economics. Palgrave Macmillan, London. https://doi.org/10.1007/978-1-349-10947-0_32
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DOI: https://doi.org/10.1007/978-1-349-10947-0_32
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