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On the labor theory of value as the basis for the analysis of economic inequality in the capitalist economy

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  • Naoki Yoshihara

Abstract

In this paper, we review the labor theory of value as the basis for the analysis of economic inequality in a capitalist economy. According to the standard Marxian view, the system of labor values of individual commodities can serve as the center of gravity for long-term price fluctuations in a precapitalist economy with simple commodity-production, where no exploitative social relation emerges, while in a modern capitalist economy, the labor value system is replaced by prices of production associated with an equal positive rate of profits as the center of gravity, in which exploitative relation between the capitalist and the working classes is a generic and persistent feature of economic inequality. Some of the literature such as Michio Morishima criticized this view by showing that the labor values of individual commodities are no longer well-defined if a capitalist economy has joint production. Given these arguments, this paper firstly shows that the system of individual labor values can be still well-defined in a capitalist economy with joint production whenever the set of available production techniques is all-productive. Secondly, this paper shows that it is generally impossible to verify that labor-value pricing serves as the center of gravity for price fluctuations in precapitalist economies characterized by the full development of simple commodity-production.

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  • Naoki Yoshihara, 2021. "On the labor theory of value as the basis for the analysis of economic inequality in the capitalist economy," Japanese Economy, Taylor & Francis Journals, vol. 47(2-3), pages 190-212, July.
    • Handle: RePEc:mes:jpneco:v:47:y:2021:i:2-3:p:190-212
    DOI: 10.1080/2329194X.2021.1952081
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    1. Roberto Veneziani, 2013. "Exploitation, inequality and power," Journal of Theoretical Politics, , vol. 25(4), pages 526-545, October.
    2. Yoshihara, Naoki & Veneziani, Roberto, 2018. "The Theory Of Exploitation As The Unequal Exchange Of Labour," Economics and Philosophy, Cambridge University Press, vol. 34(3), pages 381-409, November.
    3. Roberto Veneziani & Naoki Yoshihara, 2015. "Exploitation in economies with heterogeneous preferences, skills and assets: An axiomatic approach," Journal of Theoretical Politics, , vol. 27(1), pages 8-33, January.
    4. Morishima, Michio, 1974. "Marx in the Light of Modern Economic Theory," Econometrica, Econometric Society, vol. 42(4), pages 611-632, July.
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    7. Soh Kaneko & Naoki Yoshihara, 2018. "On the General Impossibility of Persistent Unequal Exchange Free Trade Equilibria in the Pre-industrial World Economy," Working Papers SDES-2018-19, Kochi University of Technology, School of Economics and Management, revised Dec 2018.
    8. Simon Mohun & Roberto Veneziani, 2017. "Value, Price, And Exploitation: The Logic Of The Transformation Problem," Journal of Economic Surveys, Wiley Blackwell, vol. 31(5), pages 1387-1420, December.
    9. Naoki Yoshihara & Soh Kaneko, 2016. "On the Existence and Characterization of Unequal Exchange in the Free Trade Equilibrium," Metroeconomica, Wiley Blackwell, vol. 67(2), pages 210-241, May.
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    14. Roberto Veneziani & Luca Zamparelli & Naoki Yoshihara, 2017. "A Progress Report On Marxian Economic Theory: On The Controversies In Exploitation Theory Since Okishio (1963)," Journal of Economic Surveys, Wiley Blackwell, vol. 31(5), pages 1421-1448, December.
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    17. Dana, Rose-Anne & Florenzano, Monique & Le Van, Cuong & Lévy, Dominique, 1984. "Production prices and general equilibrium prices," CEPREMAP Working Papers (Couverture Orange) 8422, CEPREMAP.
    18. Naoki Yoshihara, 2017. "A Progress Report On Marxian Economic Theory: On The Controversies In Exploitation Theory Since Okishio (," Journal of Economic Surveys, Wiley Blackwell, vol. 31(2), pages 632-659, April.
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    Cited by:

    1. CHINNOCK, Rylan & VENEZIANI, Roberto & YOSHIHARA, Naoki, 2024. "Axiomatic Marxian Exploitation Theory : a Survey of the Recent Literature," Discussion Paper Series 754, Institute of Economic Research, Hitotsubashi University.

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    More about this item

    JEL classification:

    • D63 - Microeconomics - - Welfare Economics - - - Equity, Justice, Inequality, and Other Normative Criteria and Measurement
    • D51 - Microeconomics - - General Equilibrium and Disequilibrium - - - Exchange and Production Economies

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