Reich (2013) recapitulates my model (Helmedag 2012a) incorrectly. Above all, he mixes up exogenous with endogenous variables. Moreover, Reich's interpretation of the system's dynamics is on the one hand formally insufficient; on the other hand, matters are presented in a more complicated way...

The causal structure of capitalistic commodity production can be revealed by notionally separating total output into two categories: 'necessaries' bought by employees, and the rest constituting society's surplus. The rate of profit is determined in the wage good industry and becomes the system?s...

Based on considerations concerning justice, average and minimum wages as well as unemployment aid are determined. The derived guidelines refer to net product and reflect 'reasonable' proportions between the income categories. Thus, deviations from the suggested principles may be classified as...

Marx measures the degree of exploitation by the rate of surplus value. This is the ratio of (unpaid) surplus labour to so-called variable capital (v) comprising the workers’ remuneration. The denominator of the profit rate, however, additionally encompasses constant capital (c), which covers...

More than 75 years ago, John Maynard Keynes wrote in his magnum opus: ‘The outstanding faults of the economic society in which we live are its failure to provide for full employment and its arbitrary and inequitable distribution of wealth and incomes’ (Keynes 1936 [1978]: 372). This...