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Mathematical Proof of the Breakdown of Capitalism

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  • Kakarot-Handtke, Egmont

Abstract

The existence proof of general equilibrium, which is based on subjective-behavioral axioms, is replaced by the existence proof of a final turning point, which is based on objective-structural axioms. The final turning point is characterized by an irreversible switch from profits to losses for the business sector as a whole and marks the beginning of the breakdown of the monetary economy. This has nothing to do with any market failures or irrationalities. The final turning point can be preceded by an arbitrary number of temporary profit/loss reversals and is in full accordance with the households’ optimal intertemporal consumption plans.

Suggested Citation

  • Kakarot-Handtke, Egmont, 2014. "Mathematical Proof of the Breakdown of Capitalism," MPRA Paper 52910, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:52910
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    References listed on IDEAS

    as
    1. Kakarot-Handtke, Egmont, 2011. "Reconstructing the Quantity Theory (I)," MPRA Paper 32421, University Library of Munich, Germany.
    2. Carmen M. Reinhart & Kenneth S. Rogoff, 2009. "Varieties of Crises and Their Dates," Introductory Chapters, in: This Time Is Different: Eight Centuries of Financial Folly, Princeton University Press.
    3. Wassily Leontief, 1937. "Implicit Theorizing: A Methodological Criticism of the Neo-Cambridge School," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 51(2), pages 337-351.
    4. Kakarot-Handtke, Egmont, 2011. "Primary and secondary markets," MPRA Paper 32996, University Library of Munich, Germany.
    Full references (including those not matched with items on IDEAS)

    Citations

    Blog mentions

    As found by EconAcademics.org, the blog aggregator for Economics research:
    1. Capitalism's rapture
      by Economic Logician in Economic Logic on 2014-01-30 21:59:00

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    More about this item

    Keywords

    new framework of concepts; structure-centric; axiom set; consumption economy; Profit Law; simulation; market clearing; budget balancing; final turning point; existence proof;
    All these keywords.

    JEL classification:

    • B59 - Schools of Economic Thought and Methodology - - Current Heterodox Approaches - - - Other
    • D90 - Microeconomics - - Micro-Based Behavioral Economics - - - General
    • E19 - Macroeconomics and Monetary Economics - - General Aggregative Models - - - Other

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