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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.

Suggested Citation

  • Naoki Yoshihara, 2021. "On the labor theory of value as the basis for the analysis of economic inequality in the capitalist economy," The Japanese Political 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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    Cited by:

    1. Zhiwu Zhang, 2026. "The transformation from human surplus value to AI algorithmic surplus value: logic of the critique of capital in the era of AI," Humanities and Social Sciences Communications, Palgrave Macmillan, vol. 13(1), pages 1-14, December.
    2. 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.

    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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