Money and Households in a Capitalist Economy

Money and Households in a Capitalist Economy

A Gendered Post Keynesian–Institutional Analysis

Zdravka Todorova

Post Keynesian analyses of monetary production have not given much attention to households as institutions, while a good deal of the literature in feminist economics discusses households in a strictly microeconomic context, with little consideration of monetary phenomena. This book, a unique study of the capitalist economy, utilizes a distinctive combination of Post Keynesian, institutional, and gender analysis to examine household economics in capitalist society in order to flesh out the gaps in each.

Chapter 2: The Place of Households in the Post Keynesian Theory of Monetary Production

Zdravka Todorova

Subjects: economics and finance, post-keynesian economics


ELEMENTS OF THE POST KEYNESIAN THEORY OF MONETARY PRODUCTION One of the main juxtapositions that divide neoclassical from heterodox economic theories is exchange versus production (Lavoie 1992; Dow 2001, 19). John Maynard Keynes (1933 [1973]; 1936 [1964]) developed the concept of entrepreneurial (monetary production) economy as an alternative to the real-wage framework in which money does not enter the production process in any significant manner. The notion of a monetary production economy serves as the core of Post Keynesian economics (De Carvalho 1992, 11). Later, the analysis of a monetary production economy will be extended to an analysis of pecuniary culture by introducing the analytical category of gender. Households will serve as a focal point in discussing monetary production and gender as processes within a pecuniary culture. The following characteristics of a monetary production economy pertain to households: ● ● ● ● Households engage in pecuniary valuation in order to secure a livelihood. Money serves as a unit of account that households must obtain. Money is a store of value, and can preclude households to obtain livelihood. As a consequence, there is no market mechanism that eliminates unemployment. Prices and the wage structure are administered by business enterprises. 12 Households in the Post Keynesian theory of monetary production ● 13 Business enterprises launch product lines in order to achieve various business goals which may or may not correspond to the households’ need to secure livelihood. As a consequence of all these, scarcity is not a natural phenomenon (even though there are exhaustive natural resources), instead,...

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