Abstract
The dominant price theory from the perspective of models of general equilibrium is in terms of rigor the Arrow-Debreu General Equilibrium Theory (GET) of so-called (neoclassical) perfect competition. The most developed framework for national accounting is the System of National Accounts (SNA) of the United Nations in its current form. Both approaches towards a classification and analysis of microeconomic structures flourished in the 1960s and 1970s, but lost in importance thereafter, in the first case, due to the internal limitations of GET in the fulfillment of Smith’s conjecture on the working of market economies and, in the second case, due to a dilution of the current SNA as a rigorous and coherent approach to input–output structures within the System of National Accounts as it was originally formulated by Richard Stone and his research group. Moreover, the Arrow-Debreu world pays little attention to the need for a System of National Accounts (though there have been some attempts to combine these two approaches in the study of the “real” magnitudes usable to characterize market economies).1 It is therefore basically a purely “nominal” approach,2 despite the fact that it is in fact solely a theory of relative prices and thus faces the problem of the choice of a numéraire, which however is not supposed to reflect something truly “real”. It therefore seems to suggest that there is nothing “real” behind the “nominal”, not even as a theoretical construction that can help to understand the movement of “nominal” magnitudes. In addition to its pure “surface” orientation, GET pursues a theory of competition that does not reflect any competition at all, since all individuals and firms are isolated utility or profit maximizing price-takers without any interaction with each other.
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Notes
- 1.
See Fisher and Shell (1972) for a prominent example.
- 2.
The expression “nominal” is here used in contradistinction to the concept of “real” (“quantity”-oriented) magnitudes of national accounting systems.
- 3.
But based on Marxian categories.
- 4.
See Eatwell et al. (1992) for a summary of Marx’s economics.
- 5.
By Morishima, Okishio, Steedman, Wolfstetter, Krause, Holländer, and others.
- 6.
I have to thank Andrew Kliman for detailed comments on this section of the chapter which contributed to improving its presentation. Of course, the usual caveats apply.
- 7.
A, l are the unit input data of standard input–output analysis, see also Chaps. 1/3, that is augmented by workers average consumption data.
- 8.
In contrast to the simultaneous equations approach there are however no linear equation systems to be solved here.
- 9.
See McGlone and Kliman (1996, p. 46). Note that p t is here interpreted in terms of a historically given vector v t .
- 10.
See McGlone and Kliman (1996, p. 46).
- 11.
Constant capital, variable capital and surplus value are thus all given magnitudes when the price-value iteration is started.
- 12.
This seems to be a general problem for the presentations of the TSSI in the literature, since there meanwhile exist numerous examples for its formulation, but by and large no compact, concise definition for general models of production which avoids the various shortcomings of the examples.
- 13.
- 14.
If at all, a continuous-input continuous-output model type would here be the more appropriate starting point for the modelling of a capitalist economy, see Foley (1986) for a formulation of this type of approach in the context of Marxian economics.
- 15.
- 16.
See also Foley (2000).
- 17.
See also Mohun (2004) for further remarks on the literature and an outline of some recent approaches to an accounting structure which relates observable prices to Marxian labour values.
- 18.
y = (I − A) − 1 x as usual.
- 19.
An interesting non-standard approach to a definition of labor values – which includes capitalists’ consumption basket into the “means of production” in a stationary economy – has been provided recently by Wright (2007).
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Flaschel, P. (2010). Baseline Approaches to the Labor Theory of Value. In: Topics in Classical Micro- and Macroeconomics. Springer, Berlin, Heidelberg. https://doi.org/10.1007/978-3-642-00324-0_2
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