The real heresy in the theory of market economies: Chrematisctic dynamics and scalable wage labor

Abstract

Orthodox economics postulates market economies as free oikonomic systems. The postulate of oikonomia as the main behavior that drives economic agents, leads to the systemic feature of equilibrium. If, on the contrary, we postulate market economies as chrematistic wage-labor economies, we get the systemic feature of excess supply economy with no possibility of static steady states. The systemic feature of excess supply system is equivalent to the realization problem and to the nominal growth imperative. Therefore, in a chrematistic economy dynamics is inherent. The essence of wage-labor is that the non-scalable labor becomes scalable for the entrepreneur. This characteristic has several implications: 1/ the primary factor of the division of labor and specialization to increase productivity is not physical gains, but the faster turnover; 2/ instead of competition, we have winner-takes-all logic in the market, which manifests itself in market concentration and the central role of innovation; 3/ the access to money to expand entrepreneurial activity is paramount, so money power plays a crucial role.