Marx’s Theory of Value, Price and Growth in a Leontief Economy
Part of the Lecture Notes in Economics and Mathematical Systems book series (LNE, volume 207)
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The simplest framework of an economy with linear techniques is the so-called Leontief economy. At the outset, it is necessary to stipulate the framework of a Leontief economy.
KeywordsProduction Price Total Profit Cost Price Total Surplus Profit Rate
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- 1).Since inputs of production should come before outputs, there is a time-lag between input and output. If the production level differs from period to period, it may become difficult to evaluate the true inputs. In the above definition, therefore, the amount Ax is regarded as equivalents of inputs necessary for x, as if the state of the economy represented by x were to be repeated. This implies that some kind of steady state needs to be presupposed in the evaluation of net products.Google Scholar
- 2).The assumption (A.3) plays an important role in the discussion made in the Leontief economy case.Google Scholar
- As for the indispensability of labour, (A.2) will be assumed in this chapter. Also see Chapter III, p. 54.Google Scholar
- 3).It is also possible to consider reproducibility in a strong sense: for V sv>0n,∃ x ≧ 0n, sucn that x − Mx = s · Strong reproducibility, however, will be reduced to reproducibility, as is strong productiveness to productiveness.Google Scholar
- 4).This is designated as the average rate of profit by Marx. In this volume, the average rate of profit is identified with the equilibrium profit rate: they are referred to as simply the profit rate.Google Scholar
- 5).The production price is also the same as the long run equilibrium price, and is often referred to simply as price.Google Scholar
- 6).This type of production price was formally discussed by Sraffa in a systematic manner.Google Scholar
- Let us note that in order to evaluate the profit rate the nonnegativity of prices is not essential. It is derived from the exchange of equivalents in the market, in particular the payment of wages — pF ≧ o: labour-power and wages are exchanged as equivalents.Google Scholar
- 7).Rigorously speaking, cost-price here is cost-value.Google Scholar
- 10).Marx’s original statement can be expressed as dpj/dwj > o.Google Scholar
- The economically typical case of this is that p ∞; w. The former is more relaxed than the latter, but it is virtually more difficult to find its economically meanigful equivalent condition. This is why the latter is mostly discussed.Google Scholar
- That is, in the uniform growth case, the exact amounts of net and surplus products can be evaluated on the basis of the ongoing system of techniques. The time structure of production thus makes it difficult to evaluate net and surplus products.Google Scholar
- Nevertheless, it must be noted that even if the economy is in a steady state and full information about techniques is given, the amount of surplus is obscured by the social system itself. This is what Marx tried to show in his value theory.Google Scholar
- 12).Differential rent, which is another form of income, will be discussed in Chapter VI.Google Scholar
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