From Growth Stagnation to Financial Crisis: Unproductive Labor as a Missing Link in Mainstream Theory

In an effort to explain the growth stagnation that hampered the United States in the period from the mid-1970s to the mid-1990s, mainstream economists unwittingly and incompletely reinvented the concept of unproductive labor that is rooted in classical and Marxian economics. The price to pay for having ignored this concept had been unexplained economic events, inappropriate policy, and relative national economic decline. The mainstream economists' attempt to adopt this concept came at a cost to their theoretical core. The abandonment of the concept came at a cost to the real economy represented by the financial crisis of 2008.