social sciences for the support of a world of solidarity peter fleissner, vienna, austria

The Seventh WAPE Forum State, Market, the Public and the Human

Development in the 21st Century May 25 - 27, 2012

Universidad Autonoma Metropolitana, Mexico City

Social Sciences for the Support of a World of Solidarity

Peter Fleissner, Vienna, AustriaTU-Vienna, transform!at, http://transform.or.at

Outline

• Introduction: Socialism 21: from utopia to science => towards a society of solidarity

• A sketch of the theory of reflection („Widerspiegelungstheorie“)

• Simulation in the context of the cycle of change• Basic elements of mathematical models• Examples and classification of computer

simulation• What to do?

Introduction (1/5)Frederick Engels in „Socialism: Utopian and Scientific“ (The original title

in German describes the relationship between Utopia and Science in a more precise way, it says „from utopia to science“)

• „(T)wo great discoveries, the materialistic conception of history and the revelation of the secret of capitalistic production through surplus-value, we owe to Marx. With these discoveries, Socialism became a science. The next thing was to work out all its details and relations”.

• On the other hand, Engels legacy „The Dialectics of Nature“ offered essential features to posterity how to interpret natural sciences in the context of a materialistic perspective.

• On the other hand, Marx and Engels showed in their writings how to analyze both, society and nature, in an integrated and dialectic way.

*

Introduction (2/5)• The materialistic concept of history, the mechanism of capitalistic

production and the dialectics of nature still represent the basis of left scientific thought, allowing us deeper understanding of the fabrics of history and nature.

• But: History did not stop with Marx and Engels, nor did all kinds of sciences and research. History showed qualitative new features and relations and enriched our understanding of the world.

• Therefore we should not use outdated and failed concepts of neither Socialism nor Nature.

• We should not repeat the mistakes of the past. We have to apply the best methods, most efficient concepts, and the deepest insights human mind has discovered.

• Also it is necessary that the new ideas are not only utopian, but are also scientific, based on the most developed insights available.

Introduction (3/5)

For a socialism of the 21st century imho four issues have to be taken into account:

• Concrete pathways towards the “emancipation of labor” (see the interview with Karl Marx in the Chicago Tribune, 5 January 1879) – with a focus on ALL kinds of labor, may it be paid or unpaid, male or female, formal or informal, manual or mental.

• Pathways towards socio-economic and gender-equality• Establishing a culture of democracy, participation, solidarity,

recognition, inclusion, and conviviality.• Protecting natural environment, transforming production and its

energy base towards sustainability.

Introduction (4/5)• We should not work with simplified solutions like to adopt outdated

concepts of society, based on authoritarian rule, or destroying our social and natural environment. Marx’ demand for emancipation is not compatible with it.

• Also, a change of our personal life style is needed, foremost in the wealthy countries of our planet, to be based on a changed mindset.

• But one of the most important areas of change is still the politico-economic system. Although there is no ideal way towards a society of solidarity, there is definitely no hope to reach such goal without a political transformation of the economy.

• In his paper “Dynamic Modeling towards a Society of Solidarity“ at the WARP conference Carsten Stahmer described basic features of a new economic order in Germany. He proposed adequate methods and tools how to do research along these lines. I will elaborate on some of these methods.

Introduction (5/5)• One of the methods where great progress was reached is

mathematical modeling and computer simulation. • My suggestion is to use this method as a tool to get a clearer and

more consistent picture of the transformation process and the desired structure and dynamics of the economy of the future.

• Of course, do not focus only on simulation! We have to apply it in close connection with other methods and tools of social sciences, political economics, mathematics and statistics in general.

• In the following I illustrate where political economics and computer simulation can be located within the “cycle of change”, within a transformative and reflexive practice of changing society.

• In my perspective, computer simulation is a special way of rule based reflection of specific structures and dynamics of the world.

Cycle of Change: nature-society-nature

„the world“§x“?+*

Reflection = Portraying and Designing the world

~$}[%

Reifying the concepts

°^^‚#*

.:->>|

Reification InteractionD

iffus

ion

Economic Reality – A Complex Construction

use valuescollective production/appropriation

exchange valuesprices ~ labor values

commodity/service markets

prices of productionlabor market

markets for money,credit, stocks, derivatives

Commodity productionof self employed

Physical basis

Public sector taxes, subventions

transfers, social insurance

Globalized economyInternational financial capital

Contemporary Capitalism market prices(observed)

Capitalism with perfect competitionand fixed capital

Information Society: information as commodity, communication as commercial service

commodificationof information

goods/services

7

6

5

4

3

2

1

Human beings as elements of the Cycle of Change reflecting their practice (“Widerspiegelung”)

• Reflection = „Portraying“ and „Designing“ the world, based on human practice, striving for survival/a better life, in cooperation and/or in competition.

• Human beings are embedded in the “world” and are part of it, but at the same time they are changing it according to their needs.

• In changing their environment they they change also themselves.• Lenin: metaphor for the brain: camera portraying the world in a rather

passive way. It is essential to stress also the active (“design”) part of the reflexion process: Even the coat of the photographic paper will not map all the incoming electromagnetic waves, but selects certain frequencies and intensities of light. Only those selected leave their marks on the photo and are visible to other people. The same is true for a mirror (this is another analogy frequently used – compare the German term “Widerspiegelung”).

•

Cycle of Change: mathematical modeling included

„the world“§x“?+*~$}[%

Reification

°^^‚#*

.:->>|

Reification ReflectionD

iffus

ion

Reflecting = Portraying and Designing

Cycle of Change: mathematical modeling included• Simulation models are

– Based on human thinking and projection– In a social framework– Symbolic or physical reification/codification – Complementary to experiments– More than induction – More than deduction– More than reduction – Between theory and application

• Types of simulation models • Econometric (based on emprical data)• Input-output (patterns of economic interaction)• Neural networks (highly nonlinear)• Systems dynamics models (world consists of stocks and flows) • Agent based models/microsimulation (macro&micro levels)

Basic Relations in simulation models

Strictly deterministic relations(inspired by Rainer Thiel; Germany)

Definition equations Static balance equationsDynamic balance equations Behavioral equations

Stochastic relations(inspired by Herbert Hörz, Germany)

Randomness as residual/error Randomness essential, but constant Randomness essential, but variable

Mathemathic codification 0: Definition equationsMain element: “variable” with an associated quality/dimension and a certain quantityTypes of definition equations:A: A new variable of same dimension is constructed by other variables of the same dimension, but different quantitiesExample: Circumference of a triangle is equal to the sum of the length of the three sides. B: A new variable of new dimension is constructed by other variables of the same dimension, but different quantities Example: Area of a rectangle is the product of its length and width.C: A new variable of new dimension is constructed by other variables of the different dimension and different quantities. wirExample: Labour is force times distance, turnover equals unit price times volumes.Although definition equations look simple, their identification was a cumbersome and erroneous process (like “energy” or “force”)

Mathemathic codification 1: Static Balance Equation

conservation laws; e.g. input-output-tables, national accounting schemes

l1

l3

l2

l4r1

r2

r3

L = R

L := l1 + l2 + l3 + l4 R := r1 + r2 + r3

„Only the unequal becomes equal“

„Equal quantities must consist of unequal qualities“

„Unequal quantities of equal qualities sum up to a quantity of equal quality“

Mathemathic codification 2: Dynamic Balance Equation

inventory equation, dynamic population balance, capital accumulation, dynamic accounting schemes

x(t)

t -> t +t

x(t+t) = x(t) + x(t, t+1)

The only qualitative difference between left and right: Position in time

reality is constructed by „stocks“ and „flows“

Basis for the mirroring of dynamic processes (difference and/or differential equations)

x(t, t+1)

x(t+t)

Mathemathic codification 3: Behavioral equations

cause-effect-schemes; e.g. multi-variate Blalock-model, econometric equations, neural networks

x1

y

x2

y(t) = f [ x1(t), x2(t),…]

Modifications:

• linear

• nonlinear

• stochastic

• delays

• Feedback ->

y

xy

x

y

x

D

D

D

+

-

Causal Loop Diagrams

Positive feedback: exponential growth

Negative feedback: goal seeking, oscillations (D)

wages

Demand for higher wages

prices

cost pressure

discrepancy

Target value State value

reaction

D

Examples:

Input-Output-Model Econometric model

D

D

Combined Example: Input-Output and Econometric ModelBMWF (Ed.) Mikroelektronik - Anwendungen, Verbreitung und Auswirkungen am Beispiel Österreichs, Wien 1981

Jay Forrester‘s System Dynamics: Basic elements(Software: Dynamo, Stella, Vensim …)

STOCK VARIABLE

INFLOW VARIABLE OUTFLOW VARIABLE

AUXILIARY VARIABLEVerhulst equation:dx / x = alfa (1 –x ) dt

Stella

C:\Programme\STELLA4\ITHINK.EXE

C:\Programme\STELLA8\Verhulst.STM

Forrester‘s World Dynamics: Causal Loops Diagram

Forrester‘s World Dynamics (1971): Dynamo-Diagramm

Forrester‘s World Dynamics: Stella Diagram

Mathematical Simulation Models:Paradigm Shifts and Reification

Cybernetics 0. Order Cybernetics 1. Order Cybernetics 2. Order

linear nonlinear nonlinear

static dynamic dynamic

unidirectional feedback feedback

aggregated aggregated individuals (variable numbers of agents)

deterministic deterministic/non- essential randomness

essential randomness/changing prob distributions

very abstract less abstract more realistic

How to treat Randomness?

Zero Order Cybernetics First Order Cybernetics Second Order Cybernetics

Randomness essential

No randomness

Randomness non-essential

Statistical laws of nature (H. Hörz)

In econometrics/ regression analysis treated as residual or error term

Equation y = y + e

Randomness in Regression Analysis

y(x)

x

y

e

y




No randomness


Statistical laws of nature (H. Hörz):


forecast ydeterministic part

. e residualstochastic part

„true“ y

y




Emergence of stable structures by changing the properties of randomness (prob. distr. variable)

No randomness




„true“ y

. forecast ydeterministic part

y

e residualstochastic part

„true“ y

Austrian Pension Schemes in Comparison

CreationOf Individuals

SocialInsurancePensionschemes

Dem

ogra

phic

dat

a an

dS

ccia

l sta

tistic

sIn

divi

dual

cas

es

Am

ount

/type

of

pen

sion

Private pension schemes A

mou

nt o

f pe

nsio

n

HTML-files





No randomness




„true“ y


y


„true“ y

Einstein’s explanation of Brownian motion

• The big particle can be considered as a dust particle while the smaller particles can be considered as molecules of a gas.

• On the left is the view one would see through a microscope. • To the right is the supposed explanation for the jittering of the dust

particle

• http://galileoandeinstein.physics.virginia.edu/more_stuff/Applets/brownian/brownian.html

http://galileoandeinstein.physics.virginia.edu/more_stuff/Applets/brownian/brownian.html

http://galileoandeinstein.physics.virginia.edu/more_stuff/Applets/brownian/brownian.html

People leave a roomLeaving a room without panic: velocity v0 = 1 m/s. • Efficient because of good coordination• http://angel.elte.hu/~panic/pedsim/sim/No_Panic.html

Leaving a room with panic: velocity v0 = 5 m/s. • Irregular and inefficient due to arching and clogging at the bottleneck (door)• http://angel.elte.hu/~panic/pedsim/sim/Panic.html

Leaving a room with injured (Stampede): Verletzten: velocity v0 = 5 m/s. • If a critical "squeezing" force of 1600N/m is exerted, a person is injured. (The

squeezing force is measured as the sum of the magnitudes of radial forces acting on the pedestrian). Injured people block the exit.

• http://angel.elte.hu/~panic/pedsim/sim/Stampede_N0200_Fc1600.html

An asymmetrically placed column in front of the door can avoid injuries. http://angel.elte.hu/~panic/pedsim/sim/Column_5.html

http://angel.elte.hu/~panic/pedsim/sim/No_Panic.html

http://angel.elte.hu/~panic/pedsim/sim/Panic.html

http://angel.elte.hu/~panic/pedsim/sim/Stampede_N0200_Fc1600.html

http://angel.elte.hu/~panic/pedsim/sim/Stampede_N0200_Fc1600.html

http://angel.elte.hu/~panic/pedsim/sim/Column_5.html

Overview of outcomesSimulation200 Persons

Escaped before t=45s

Injuredbefore t=45s

No Panic:No column,No injured

90 -

Panic:No column,no injured

65 -

Stampede:No column,Injured do not move

44 5

With column: 72 0





No randomness




„true“ y


y


„true“ y

.





No randomness




„true“ y

.

forecast ydeterministic part

y


„true“ y

..





No randomness




„true“ y


y


„true“ y

Example: „The blind and the lame“

Two interacting worlds …

• world A: physical world(classical mechanics)

• world B: world of information and symbols(words without meaning)

agent based models

…and two interacting agents

agent 1: the blind• Is able to

– jump– hear– Interpret sound he/she hears– And act accordingly (jump)

agent 2: the lame• Is able to

– See the width of the obstacle– Produce sound (with a trumpet) – Can link the width of the obstacle to the pitch of the sound

http://members.chello.at/gre/springer/

agent based models

http://members.chello.at/gre/springer/

C:\Dokumente und Einstellungen\fleissner\Eigene Dateien\IGW\MathModelltheorie\springer\default.htm

An invitation to cooperation

• We should start a global network of scholars• accompanying political processes of change towards new

forms of socialism of the 21st century • by adequate mathematic modeling tools, • also taking advantage from already existing groups or

activities (see e.g. GINFORS, an Anglo-German Foundation research policy initiative: Creating sustainable growth in Europe, http://www.agf.org.uk/currentprogramme/CreatingSustainableGrowthInEurope.php).

• starting with parallel work on a national basis, • later on combining national models to regional, • finally global ones.

http://www.agf.org.uk/currentprogramme/CreatingSustainableGrowthInEurope.php

Tentative research agenda (1/3)• Collecting existing ideas of types of socialism of 21st century.

I do not believe in a unique model of socialism, although various features have to be in common. Each country has its own history, tradition and institutions of social decision making and co-operative forms. Nevertheless it would be useful to have a kind of standardized description of each model type, and also a list of pros and cons to make comparisons and evaluation easier.

• Collecting existing transition concepts towards socialism - in particular, if they are controversial -, elaborating, investigating and comparing them within specialized satellite research groups, maybe linked to existing research units or research projects.

Tentative research agenda (2/3)Examples of controversial or open questions resp. ill

defined areas of research: • Commodity markets vs. moneyless transfer methods • Redistribution process: minimum wage vs. basic income - in

money terms or in kind • Working time regimes and remuneration concepts for simple

and complex labor • Price structures guided by labor values, prices of production or

other community targeted pricing?• How to preserve the natural environment and transform the

carbon based production towards a more sustainable system?• How to design and organize political participation and

democratic control?

Tentative research agenda (3/3)• Identifying adequate software tools and creating a pool of platforms for

free use/open source (e.g. VENSIM, NETLOGO, FABLES, PAJEK). Probably the methods should include system dynamics, agent based and network types of modeling.

• Developing national simulation models of socialism in each of the countries, documenting them in a standardized way, making the simulation models available to other researchers for testing and improving. If applicable the simulation models should be updated according to progress in implementation of socialist features in the individual countries.

• Collecting models, comparing and trying to integrate them.• Feeding the results back to the actual political process in various

countries, updating the model structure according to practical experiences in the concrete socialist implementation process.

Institutional context (proposal)

• Discussions and meetings in real life could be organized by the World Advanced Research Project (WARP) and the Center for Transition Sciences (CTS).

• The annual World Conferences on Political Economy (WAPE) could be a suitable forum for discussion and support of these activities.

• The network could become a global platform of elaboration, discussion and exchange of concepts, methods and models of economies in transition towards a society of solidarity, the socialism of 21st century.

Thanks for your attention!

Contact:[email protected]








Physical basis








goods/services

7

6

5

4

3

2

1

Layer 1: Use values, collectively produced and appropriated• Mathematical description in terms of Leontief’s input-output scheme to

represent the economy in terms of use values. • Each row and each column represent one branch of production or firm • It reflects the degree of division of labor. • The matrix of technical coefficients A represents the technology of the

economy. The element aij gives the amount of goods of industry i needed to produce one unit of output of industry j.

x (output vector) contains all use values produced. It can be split by kind of

use of goods into Ax (demand for intermediate goods) and y (final demand). The following famous formula is called the primal problem

Ax + y = x y (final demand) can be split it into c (consumption) and s (surplus product =

capital investment)y = c + s.

or in matrix notation Ax + Cx + Sx = x ,

where C, and S represent matrices of consumption coefficients and surplus coefficients respectively.

Layer 2: Labour values, small commodity production

Production Consumption

Self-employed laborersMoney

Labor

Commodities&

Services

The dual Leontief model deals with the unit prices

pA + q = pp …row vector of unit prices q … unit value added. After substitution of q by life unit labor input l we get the basic formula how to compute Marx’ labor values v

vA + l = v.We can split l into wages, w, and profits and get

l = w + . Marx used different symbols

W = C + V + M, where W is the labor value, •C constant capital, •V variable capital and •M surplus value. In our notation:

v = vA + w + .

Structure of „classical“ labour values all industries are value producers

c - constant capital, v - variable capital, m - surplus valueAustria 2003: 57 industries (percent), r= 0.883

c

v

m

29 Recycling30 Electricity, gas, steam and hot water supply31 Collection, purification and distribution of water32 Construction33 Sale and repair of motor vehicles; automotive fuel34 Wholesale and commission trade35 Retail trade, repair of household goods36 Hotels and restaurants37 Land transport; transport via pipelines38 Water transport39 Air transport40 Supporting a. auxiliary transport activities; travel agencies41 Post and tele-communications42 Financial intermediation, except insur. 43 Insurance and pension funding, except social security44 Activities auxiliary to financial intermediation45 Real estate activities46 Renting of machinery and equipment without operator47 Computer and related activities48 Research and development49 Other business activities50 Public administration; compulsory social security51 Education52 Health and social work53 Sewage and refuse disposal,sanitation and similar act.54 Activities of membership organizations n.e.c.55 Recreational, cultural and sporting activities56 Other service activities57 Private households with employed persons

Nr Industry1 Agriculture, hunting2 Forestry, logging3 Fishing, fish farms4 Mining of coal and lignite5 Extract. o. crude petrol. a. nat. gas, min. o. metal ores6 Other mining and quarrying7 Manufacture of food products and beverages8 Manufacture of tobacco products9 Manufacture of textiles

10 Manufacture of wearing apparel11 Manufacture of leather, leather products, footwear12 Manufacture of wood and of products of wood13 Manufacture of paper and paper products14 Publishing, printing and reproduction15 Manufacture of coke, refined petroleum products16 Manufacture of chemicals and chemical products17 Manufacture of rubber and plastic products18 Manufacture of other non-metallic mineral products19 Manufacture of basic metals20 Manufacture of fabricated metal products21 Manufacture of machinery and equipment n.e.c.22 Manufacture of office machinery and computers23 Manufacture of electrical machinery and apparatus n.e.c.24 Manufacture of radio, television equipment25 Manuf. of medical, precision, optical instruments, clocks26 Manufacture of motor vehicles and trailers27 Manufacture of other transport equipment28 Manufacture of furniture; manufacturing n.e.c.

c

v

m

c

v

m

Stucture of labour values no surplus of services, variable exploitation rates

c - constant capital, v - variable capital, m - surplus valueAustria 2003: 57 industries (percent)

Layer 3: prices of production, capitalist economy at perfect competition

capitalists


workers

Wages

Labor

Commodities&

Services

Profits


Marx provided us with the following solution for p: p = v (K + C) (1 + r), where r = v (I - A - C) x / v (K + C) x and v = l (I – A)-1

K…matrix of capital coefficients per unit of output, I …identity matrix with ones in its main diagonal, otherwise zeros, and r is the average rate of profit. This method can be generalized to an iteration process which leads us to the solution proposed by von Bortkiewicz in the beginning of the 20th century (which is equal to the solution of an eigenvector/eigenvalue problem). The generalized iteration scheme inspired by Marx is:

pi (K + C) (1 + ri) = pi+1 where ri = pi (I - A - C) x / pi (K + C) x, ri … average profit rate at iteration step i. (Different turnover times neglected,and assume they are all equal to one. The link to labor time is kept up because the iteration scheme starts from the solution of equation (3) for v

p0 = v = l (I – A)-1, where r0 = p0 (I - A - C) x / p0 (K + C) x

Marx‘ solution: Prices of productionc - constant capital, v - variable capital, m - surplus value

Austria 2003: 57 industries (percent), r=0.901

v

c

m

von Bortkiewicz: Prices of productionc - constant capital, v - variable capital, m - surplus value

Austria 2003: 57 industries (percent), r=0.952

v

c

m


Marx provided us with the following solution for p: p = v (K + C) (1 + r), where r = v (I - A - C) x / v (K + C) x and v = l (I – A)-1

K…matrix of capital coefficients per unit of output, I …identity matrix with ones in its main diagonal, otherwise zeros, and r is the average rate of profit. This method can be generalized to an iteration process which leads us to the solution proposed by von Bortkiewicz in the beginning of the 20th century (which is equal to the solution of an eigenvector/eigenvalue problem). The generalized iteration scheme inspired by Marx is:

pi (K + C) (1 + ri) = pi+1 where ri = pi (I - A - C) x / pi (K + C) x,

ri … average profit rate at iteration step i. (Different turnover times neglected,and assume they are all equal to one). The link to labor time is kept up because the iteration scheme starts from the solution of equation (3) for v

p0 = v = l (I – A)-1, where r0 = p0 (I - A - C) x / p0 (K + C) x

Layer 4: Real capital, financial capital

capitalists


workersWages

Labor

Commodities&

ServicesProfits

Financial capitalfinancialearnings

financialearnings

credits credits


In Layer3 the following equilibrium conditions were assumedWages equal consumption: wx = pCx = pc

Profits equal capital investment: πx = pSx = ps.If we want to reflect money explicitly in the economy, we need to get rid of such

equilibria. Therefore we replace them by the following savings equations:Money savings/increase of debt of households, shh , are given by the following

relations shh,t = w t – 1’C t + rl ,t mhh,t if mhh,t > 0

shh,t = w t – 1’C t + rb,t mhh,t if mhh,t < 0

m…money stocks, rl …interest rate for lending money to banks, rb … interest rate for borrowing, rl < rb

Similarly, we have money savings/increase of debt of firms, sf , as a result of profits, minus capital investment and borrowing/lending money (time indices suppressed)

sf = π – 1’S + rl mf if mf > 0

sf = π – 1’S + rb mf if mf < 0


The financial assets/debts of firms, households and state are held by the banks. Assets are rewarded by banks with an interest rate r_borrowing, credits have to be paid for with an interest rate r_lending (r_lending > r_borrowing). The payments of interest are deducted from / added to the surplus variables or wage income. Of course, the redistribution does not change the amount of total GDP. In this simplified version the income of banks is given by the sum of all interest payments of all sectors including the household and government sectors minus all interest payments of the bank for deposits of firms, households of government (if any): { -rl mhh. (if mhh. > 0) -rl mf. (if mf. > 0) }

xbanks = . +

{ -rb mhh. (if mhh. < 0) -rb mf. (if mf. > 0) }

Including a financial sector creates a secondary distribution of income.

Layer 4: Real capital, financial capitalDynamic equations

The dynamics for physical capital is given byK a,t+1 = K a,t + Sn = K a,t + (S - Sd),

where Sn is the matrix of net capital investment per time unit, and Sd the scrap matrix (or depreciation matrix) of capital. The relation between gross and net investment is given by

Sn = S - Sd

The money capital stock of firms, banks and the government debt can be represented by a row vector mf,t , the one of households by mhh,t

Money(+)/Debt(-) stocks of households, mhh,t , at time t, is given by:

mhh,t+1 = mhh,t + shh,t

Money(+)/Debt(-) stocks of firms, mf,t, at time t: mf,t+1 = mhh,t + sf,t

Layer 5: Real capital, financial capital, public sector

Produktion Konsum

ArbeiterInnenAngestellte

Unter-nehmerInnen

Industrie-Profite

Löhne Gehälter

Financial capitalfinancialearnings

financialearnings

credits credits

Public sector

Taxessubsidies

Taxestransfers

Layer 5: Real capital, financial capital, public sector

For a simplified mathematical model one could include the following variables to represent activities of the state :

•t_ind tax rate of indirect taxes•t_profits tax rate of profits•t_wages tax rate on wages•indirect taxes•direct taxes (wage tax, profit tax)•public consumption •public investment•contributions to the social insurance system•transfers to households•subsidies to enterprises• Including a public sector creates a tertiary distribution of income

Layer 6: Information society: Commodification and Commercialization of cultural activities

• As already has happened in history with land and work, under the headline of „information society“ the market conquers the sector of cultural activities, writing, singing, dancing, chatting, performing any kind of arts, doing research etc.

• This is done by an efficient interaction of the economy, technology and law.

• Technology allows for freezing volatile information on a carrier of digital or analogue data and also reviving it. It transforms cultural activies into information goods, knowledge goods and cultural goods.

• By Law (e.g. Intellectual Property Rights) copying is forbidden. Therefore all properties of commodities are created and they can be exploited by private capital.

• Three kinds of markets have been established:• A market of data carriers with content (CDs, DVDs, tapes etc)• A market of communication services (mobile communication,

Internet)• A market of devices (PCs, Laptops, TV-sets etc)








Physical basis








goods/services

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Layer 7: Contemporary capitalism

To approximate the system of contemporary capitalism, a dynamic input output model on stylized facts was constructed on two JAVA-based simulation platforms: ANYLOGIC (proprietary) and FABLES (free of charge). As a next step the model will be filled with actual data.

The following control variables allow for a change of the distribution of value added:

•r_b interest rate for credits•r_l interest rate for assets at banks•t_ind tax rate of indirect taxes•t_profits tax rate of profits•t_wages tax rate on wages•deprec_rate depreciation rate (for the moment related to

output, not to fixed capital).•leverage_factor limits the maximum amount of credits given by

banks with respect to their financial assets.•fraction of public investment on total investment

Output, savings, prices of six sectors of the economy and savings of households (preliminary results)

Capital stock and money/debt stock of each of the six sectors of the economy and of households (preliminary results)

Thanks for your attention

Contact:[email protected]

http://transform.or.at

mailto:[email protected]

http://transform.or.at/

Wassily W. Leontief, Scientific American, Sept.1982, pp.152-164;

Nobelpreis für Ökonomie1973

http://images.google.at/imgres?imgurl=http://www.adeptis.ru/vinci/wassily_leontief6.jpg&imgrefurl=http://www.adeptis.ru/vinci/e_part3_3.html&h=420&w=270&sz=20&tbnid=pyImI5-JrzsJ:&tbnh=121&tbnw=78&hl=de&start=2&prev=/images?q=leontief&hl=de&lr=&sa=G

http://www.goodbyemag.com/jan99/leontief_1.jpg

10-years forecast/comparison with actual data 1990 fast diffusion of micro-electronics in Austria

Indikator 1990 actual 1990 standard

1990 forecastwith electronics

GDP prices 1976 1051 Mrd ATS 1113 Mrd ATS 1190 Mrd ATS

unemployed 165.795 220.000 386.000!

Wage labour 2.925.396 3.221.000 3.056.000

male 1.716.754 1.883.000 1.802.000

female 1.208.642 1.338.000 1.254.000

Working hoursHours/week

39,4 39,6 39,9

Exports 526 Bill ATS 619 Bill ATS 624! Bill ATS

Imports 470 Bill ATS 631 Bill ATS 648! Bill ATS

Transitiondiagram

Status 0 neither employed not retired Status 1 blue collarStatus 2 white collarStatus 11 blue collar ret by invalidityStatus 12 blue collar ret by ageStatus 21 white collar ret by invalidity Status 22 white collar ret by age

0

2

deadbirth

1

11

12

21

22

abroad

8100

8150

8200

8250

8300

8350

8400

8450

8500

8550

8600

2003 2008 2013 2018 2023 2028 2033 2038 2043 2048

Total Population Austria 2003-2050

Yellow line: life expectancy up to 90 yrs by 2050

50

52

54

56

58

60

62

2003 2008 2013 2018 2023 2028 2033 2038 2043 2048

Retirement Age(Invalidity) White Collar Workers, male

A Combined System Dynamics/Econometric Model

G. Bruckmann/P. Fleissner: Controlling the National Economy (Am Steuerrad der Wirtschaft)Springer 1989

Interactive Simulation

C:\Programme\Macemulation\BasiliskII\Setup\BasiliskIIGUI.exe

social sciences for the support of a world of solidarity peter fleissner, vienna, austria

Documents

dialectics of nature

fabrics of history

natural sciences

karl marx

marx demand

outdated concepts of

engels legacy

frederick engels