A foundation model for marxian breakdown theories based on a new falling rate of profit mechanism.

The paper presents a foundation model for Marxian theories of the breakdown of capitalism based on a new falling rate of profit mechanism. All of these theories are based on one or more of ?the historical tendencies?: a rising capital-wage bill ratio, a rising capitalist share and a falling rate of profit. The model is a foundation in the sense that it generates these tendencies in the context of a model with a constant subsistence wage. The newly discovered generating mechanism is based on neo-classical reasoning for a model with land. It is non-Ricardian in that land augmenting technical progress can be unboundedly rapid. Finally, since the model has no steady state, it is necessary to use a new technique, Chaplygin?s method, to prove the result.

A descriptive and analytic look at Marxs own explanations for the falling rate of profit

Marxs conclusions about the falling rate of profit have been analysed exhaustively. Usually this has been done by building models which broadly conform to Marxs views and then showing that his conclusions are either correct or, more frequently, that they can not be sustained. By contrast, this paper examines, both descriptively and analytically, Marxs arguments from the Hodgskin section of Theories of Surplus Value, the General Law section of the recently published Volume 33 of the Collected Works and Chapter 3 of Volume III of Capital. It also gives a new interpretation of Part III of this last work. The main conclusions are first, that Marx had an intrinsic explanation of the falling rate of profit but was unable to give it a satisfactory demonstration and second, that he had a number of subsidiary explanations of which the most important was resource scarcity. The paper closes with an assessment of the pedigree of various currents of Marxian thought on this issue.

A descriptive and analytic look at Marxs own explanations for the falling rate of profit (Long Version)

Marxs conclusions about the falling rate of profit have been analysed exhaustively. Usually this has been done by building models which broadly conform to Marxs views and then showing that his conclusions are either correct or, more frequently, that they can not be sustained. By contrast, this paper examines, both descriptively and analytically, Marxs arguments from the Hodgskin section of Theories of Surplus Value, the General Law section of the recently published Volume 33 of the Collected Works and Chapter 3 of Volume III of Capital. It also gives a new interpretation of Part III of this last work. The main conclusions are first, that Marx had an intrinsic explanation of the falling rate of profit but was unable to give it a satisfactory demonstration and second, that he had a number of subsidiary explanations of which the most important was resource scarcity. The paper closes with an assessment of the pedigree of various currents of Marxian thought on this issue.

Land, technical progress and the falling rate of profit

The paper sets out a one sector growth model with a neoclassical production function in land and a capital-labour aggregate. Capital accumulates through capitalist saving, the labour supply is infinitely elastic at a subsistence wage and all factors may experience factor augmenting technical progress. The main result is that, if the elasticity of substitution between land and the capital-labour aggregate is less than one and if the rate of caital augmenting technical progress is strictly positive, then the rate of profit will fall to zero. The surprise is that this result holds regardless of the rate of land augmenting technical progress; that is, no amount of technical advance in agriculture can stop the fall in the rate of profit. The paper also discusses the relation of this result to the classical and Marxist literature and sets out the path of the relative price of land.

Multinational Firms’ Heterogeneity in Tax Responsiveness: the Role of Transfer Pricing

In this paper we show that the ability of multinational firms to manipulate transfer prices affects the tax sensitivity of foreign direct investment (FDI). We offer a model of international capital allocation where firms are heterogeneous in their ability to manipulate transfer prices. Perhaps paradoxically, we show that the ability to shift profits can make parent companies' investment more sensitive to host-country tax rates, as long as investors expect fisscal authorities to use price and profit detection methods. We then offer a comprehensive empirical study to test our predictions in the case of Japanese FDI. We exploit the finding that the unobservable ability to manipulate transfer prices is correlated with whole ownership of a±liates and R&D expenditure. Based on country, parent firm and sector characteristics, we estimate an investment equation on a sample of 3614 Japanese affiliates in 49 emerging countries. We obtain a greater semi-elasticity of investment to the statutory tax rate in a±liates that are wholly-owned and that have R&D intensive parents. We interpret these results as indirect evidence that abusive transfer pricing is one of the determinants of FDI activity.

Competition for FDI and profit shifting: On the effects of subsidies and tax breaks

We investigate competition for FDI within a region when a foreign multinational rm can profitably exploit differences in statutory corporate tax rates by shifting taxable pro ts to lower-tax jurisdictions. In such framework we show that targeted tax competition may lead to higher welfare for the region as a whole than lump-sum subsidies when the difference in statutory corporate tax rates and/or their average is high enough. Tax competition is also preferable from an efficiency point of view (overall surplus) by changing the firm's investment decision when pro t shifting motivations induce the rm to locate in the (before tax) least pro table country.

Differential allocation and deployment of direct and indirect defences by Vicia sepium along elevation gradients

Dissecting drivers of plant defence investment remains central for understanding the assemblage of communities across different habitats. There is increasing evidence that direct defence strategies against herbivores, including secondary metabolites production, differ along ecological gradients in response to variation in biotic and abiotic conditions. In contrast, intraspecific variation in indirect defences remains unexplored. Here, we investigated variation in herbivory rate, resistance to herbivores, and indirect defences in ant-attracting Vicia species along the elevation gradient of the Alps. Specifically, we compared volatile organic compounds (VOCs) and ant attraction in high and low elevation ecotypes. Consistent with adaptation to the lower herbivory conditions that we detected at higher elevations in the field, high elevation plants were visited by fewer ants and were more susceptible to herbivore attack. In parallel, constitutive volatile organic compound production and subsequent ant attraction were lower in the high elevation ecotypes. We observed an elevation-driven trade-off between constitutive and inducible production of VOCs and ant attraction along the environmental cline. At higher elevations, inducible defences increased, while constitutive defence decreased, suggesting that the high elevation ecotypes compensate for lower indirect constitutive defences only after herbivore attack. Synthesis. Overall, direct and indirect defences of plants vary along elevation gradients. Our findings show that plant allocation to defences are subject to trade-offs depending on local conditions, and point to a feedback mechanism linking local herbivore pressure, predator abundance and the defence investment of plants.

Knowledge of Catalan, public/private sector choice and earnings: Evidence from a double sample selection model

This paper explores the earnings return to Catalan knowledge for public and private workers in Catalonia. In doing so, we allow for a double simultaneous selection process. We consider, on the one hand, the non-random allocation of workers into one sector or another, and on the other, the potential self-selection into Catalan proficiency. In addition, when correcting the earnings equations, we take into account the correlation between the two selectivity rules. Our findings suggest that the apparent higher language return for public sector workers is entirely accounted for by selection effects, whereas knowledge of Catalan has a significant positive return in the private sector, which is somewhat higher when the selection processes are taken into account.

A logistic regression approach to estimating customer profit loss due to lapses in insurance

This article focuses on business risk management in the insurance industry. A methodology for estimating the profit loss caused by each customer in the portfolio due to policy cancellation is proposed. Using data from a European insurance company, customer behaviour over time is analyzed in order to estimate the probability of policy cancelation and the resulting potential profit loss due to cancellation. Customers may have up to two different lines of business contracts: motor insurance and other diverse insurance (such as, home contents, life or accident insurance). Implications for understanding customer cancellation behaviour as the core of business risk management are outlined.

Plasticity in sex allocation in the plant Mercurialis annua is greater for hermaphrodites sampled from dimorphic than from monomorphic populations.

Plants are notoriously variable in gender, ranging in sex allocation from purely male through hermaphrodite to purely female. This variation can have both a genetic and an adaptive plastic component. In gynodioecious species, where females co-occur with hermaphrodites, hermaphrodites tend to shift their allocation towards greater maleness when growing under low-resource conditions, either as a result of hermaphrodites shifting away from an expensive female function, or because of enhanced siring advantages in the presence of females. Similarly, in the androdioecious plant Mercurialis annua, where hermaphrodites co-exist with males, hermaphrodites also tend to enhance their relative male allocation under low-resource conditions. Here, we ask whether this response differs between hermaphrodites that have been evolving in the presence of males, in a situation analogous to that supposed for gynodioecious populations, vs. those that have been evolving in their absence. We grew hermaphrodites of M. annua from populations in which males were either present or absent under different levels of nutrient availability and compared their reaction norms. We found that, overall, hermaphrodites from populations with males tended to be more female than those from populations lacking males. Importantly, hermaphrodites' investment in pollen and seed production was more plastic when they came from populations with males than without them, reducing their pollen production at low resource availability and increasing their seed production at high resource availability. These results are consistent with the hypothesis that plasticity in sex allocation is enhanced in hermaphrodites that have likely been exposed to variation in mating opportunities due to fluctuations in the frequency of co-occurring males.