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The Bureau of Economics in the Federal Trade Commission has a three-part role in the Agency and the strength of its functions changed over time depending on the preferences and ideology of the FTC’s leaders, developments in the field of economics, and the tenor of the times. The over-riding current role is to provide well considered, unbiased economic advice regarding antitrust and consumer protection law enforcement cases to the legal staff and the Commission. The second role, which long ago was primary, is to provide reports on investigations of various industries to the public and public officials. This role was more recently called research or “policy R&D”. A third role is to advocate for competition and markets both domestically and internationally. As a practical matter, the provision of economic advice to the FTC and to the legal staff has required that the economists wear “two hats,” helping the legal staff investigate cases and provide evidence to support law enforcement cases while also providing advice to the legal bureaus and to the Commission on which cases to pursue (thus providing “a second set of eyes” to evaluate cases). There is sometimes a tension in those functions because building a case is not the same as evaluating a case. Economists and the Bureau of Economics have provided such services to the FTC for over 100 years proving that a sub-organization can survive while playing roles that sometimes conflict. Such a life is not, however, always easy or fun.

Building on an analysis of values and prices in the context of explicitly heterogeneous concrete labors, this paper formally examines Marx’s repeated imagery of capitalist competition as a process of “sharing” among “hostile brothers,” each a “shareholder” in a “social enterprise” in which particular commodities and capitals appear as “aliquot parts of the whole.” Approaching each commodity as it appears in competition – as the product of an aliquot part of the aggregate inputs to production – allows several conclusions. First, value-price transformation is equivalent to a transformation of actual production conditions (on the basis of which the social labor contained in the commodity is its value) into socially average or aliquot part production conditions (on the basis of which the social labor contained in the commodity is its production price). Second, price formation (“gravitational” adjustment to levels expressing equivalence) is the same thing as the formation of abstract labor as the homogeneous unit of measure for the labor content of commodities. Each is an aspect of a single process that simultaneously commensurates use-values as market equivalents and commensurates concrete labors as abstract labor, so that equivalents in exchange do indeed “contain” equal amounts of abstract labor. Third, concerning commodity fetishism and the “illusions” of competition, the social content of particular magnitudes becomes visible when each is represented as a “bearer” of crucial characteristics of the aggregate that have been projected onto its parts, so that what initially appears as separate, particular and individual is simultaneously connected, general, and social.

Within the framework of potential efforts and strategies to employment generation for young people in Africa in general and Ethiopia in particular, the agricultural sector is increasingly considered as an important sector and a valuable means for poverty reduction, the promotion of economic development, and youth's economic independence. Renewed hope is placed on the sector to offer sustainable livelihood prospects for the rural youth. Yet, the success and sustainability of the sector require a proper understanding of how households allocate youth labor time in the sector and whether agricultural labor supply is responsive to economic incentives such as shadow wages. Using gender- and age-specific plot-level panel data, we systematically analyze the impacts of shadow wages of each household member on youth agricultural labor supply across types of farms. The results indicate that agricultural shadow wages matter for the youth's labor supply in the sector, but the impact differs for male and female youth. We also show that trends and patterns of youth labor supply vary across gender and whether they work on their own farm, and so do their labor returns. The results are consistent after controlling for individual heterogeneity and instrumenting for possible endogeneity. Taking into account the intensity of youth's actual involvement in the family farm, own farm or off-farm work instead of their stated intentions, the results challenge the presumption that youth are abandoning agriculture, at least in agricultural potential areas of Ethiopia. Instead, the frequent narrative of youth disengaging from agriculture may be a result of methodological flaws or data limitations. The findings suggest that it is necessary to invest in agricultural development to enhance labor productivity and employability of young people in agriculture.

Tooling is a common component of an industrial product’s manufacture. Specific tooling is devised to serve the fabrication of a particular product, while generic tooling can be used in the manufacture of multiple products. In the latter case, companies are confronted with the problem of fairly allocating the indirect costs of the tooling. This article studies how to allocate costs of generic tooling to single production orders.

Ten allocation methods (AMs) are described that are in principle suited to the distribution of generic tooling costs to production orders. Since the presented methods have for the most part been discussed in differing contexts, we apply them to a specified generic tooling problem for comparison. Evaluation of the various methods is based on 16 criteria. Reasoning is supported by a computational Monte Carlo simulation. Furthermore, we suggest using the Analytical Hierarchy Process (AHP) to elaborate one final proposition concerning the most preferable allocation scheme.

The article reports the single allocation rules’ performances for different allocation scenarios. The described characteristics refer to fairness, efficiency, and simplicity as well as to empty-core performance. Using AHP analysis allows for the aggregation of the rules’ criteria ratings. Thus, especially suitable allocation schemes for the problem at hand are identified.

An allocation is required for budgeting reasons and also for the definition of projects’ bottom-up sales prices. Selecting the “right” AM is important, as a suboptimal AM can result in unfair allocation vectors, which will act as incentives to stop using the common resource, potentially leading to higher total costs.

Research on the comparison of AMs is typically performed for certain purposes, such as enterprise networks, horizontal cooperative purchasing scenarios, or municipal service units. This article will augment the research evaluating AMs by introducing a novel set of evaluation criteria and by providing an in-depth comparison of AMs suited for the allocation of generic tooling costs.

In recent years, economics has turned its serious attention to the explaining of conflicts and a peaceful resolution of conflicts. Some interesting and powerful microeconomic models have been developed, yet it seems there are gaps that motivate the current research. As our discussion shows below, the existing models are robust in explaining an equilibrium defence spending of a nation in a general equilibrium setting. Yet, there is little that we know about the regional distribution of defence spending that is likely to give rise to serious rent-seeking activities, politicking and consequent economic consequences in terms of regional disparity and inequality. In this work, we posit that defence spending is like a local public good that impacts on a regional, or local, economy. To be more specific, our model suggests that defence spending offers public infrastructure to a regional economy that, in turn, impinges on the costs of production of local firms, which thereby influence the competitive positioning of the regional economy in the national, or global, market. The goal of the work is to explore how the politics of allocation of defence spending can create an equilibrium regional inequality within a nation, which may in turn drive internal conflicts. Since an allocation of defence spending impacts on regional inequality, regional inequality becomes endogenous in our model. We establish an equilibrium inequality in our model that depends on the optimal allocation of defence spending across regions, which is driven by the electoral motive of an incumbent government.

The paper published below was prepared by Taylor Ostrander for Frank Knight’s course, Economic Theory, Economics 301, during the Fall 1933 quarter.