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The sources of aggregate profitability: Marx's theory of surplus value revisited

Author

Listed:
  • Peter Flaschel

    (Bielfeld University)

  • Nils Fröhlich

    (Chemnitz University of Technology)

  • Roberto Veneziani

    (Queen Mary University of London)

Abstract

This paper provides an empirical analysis of Marx's theory of exploitation built on the standard interpretation of the value of labour power. The relationship between the aggregate value rate of profit and the aggregate price rate of profit is studied and it is shown that the two rates coincide up to negligible deviations by using flow as well as stock matrix data for the German economy (1991–2000). This suggests that the main determinants of the value rate – namely absolute and relative surplus value, as well as technical progress affecting the value of the aggregate capital stock – may help to understand the dynamics of the aggregate market rate of profit.

Suggested Citation

  • Peter Flaschel & Nils Fröhlich & Roberto Veneziani, 2013. "The sources of aggregate profitability: Marx's theory of surplus value revisited," European Journal of Economics and Economic Policies: Intervention, Edward Elgar Publishing, vol. 10(3), pages 299—312-2, December.
    • Handle: RePEc:elg:ejeepi:v:10:y:2013:i:3:p299-312
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    References listed on IDEAS

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    1. Anwar M. Shaikh, 1998. "The Empirical Strength of the Labour Theory of Value," Palgrave Macmillan Books, in: Riccardo Bellofiore (ed.), Marxian Economics: A Reappraisal, chapter 15, pages 225-251, Palgrave Macmillan.
    2. Roberto Veneziani & Naoki Yoshihara, 2011. "Strong Subjectivism In The Marxian Theory Of Exploitation: A Critique," Metroeconomica, Wiley Blackwell, vol. 62(1), pages 53-68, February.
    3. Yoshihara, Naoki, 2010. "Class and exploitation in general convex cone economies," Journal of Economic Behavior & Organization, Elsevier, vol. 75(2), pages 281-296, August.
    4. Flaschel, Peter, 1983. "Actual Labor Values in a General Model of Production," Econometrica, Econometric Society, vol. 51(2), pages 435-454, March.
    5. Lefteris Tsoulfidis, 2002. "Values, prices of production and market prices: some more evidence from the Greek economy," Cambridge Journal of Economics, Oxford University Press, vol. 26(3), pages 359-369, May.
    6. Cockshott, W Paul & Cottrell, Allin F, 1997. "Labour Time versus Alternative Value Bases: A Research Note," Cambridge Journal of Economics, Oxford University Press, vol. 21(4), pages 545-549, July.
    7. Gupta, S & Steedman, Ian, 1971. "An Input-Output Study of Labour Productivity in the British Economy," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 33(1), pages 21-34, February.
    8. Marquetti, Adalmir A., 2003. "Analyzing historical and regional patterns of technical change from a classical-Marxian perspective," Journal of Economic Behavior & Organization, Elsevier, vol. 52(2), pages 191-200, October.
    9. Simon Mohun, 2004. "The Labour Theory of Value as Foundation for Empirical Investigations," Metroeconomica, Wiley Blackwell, vol. 55(1), pages 65-95, February.
    10. Duncan K. Foley, 1982. "The Value of Money the Value of Labor Power and the Marxian Transformation Problem," Review of Radical Political Economics, Union for Radical Political Economics, vol. 14(2), pages 37-47, June.
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