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The Emergence of the Law of Value in a Dynamic Simple Commodity Economy

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  • Ian Wright

Abstract

A dynamic computational model of a simple commodity economy is examined and a theory of the relationship between commodity values, market prices and the efficient division of social labour is developed. The main conclusions are: (i) the labour value of a commodity is an attractor for its market price; (ii) market prices are error signals that function to allocate the available social labour between sectors of production; and (iii) the tendency of prices to approach labour values is the monetary expression of the tendency of a simple commodity economy to allocate social labour efficiently. The model demonstrates that, in the special case of simple commodity production, Marx's law of value can naturally emerge from multiple local exchanges and operate 'behind the backs' of actors solely via money flows that place budget constraints on their local evaluations of commodity prices, which are otherwise subjective and unconstrained.

Suggested Citation

  • Ian Wright, 2008. "The Emergence of the Law of Value in a Dynamic Simple Commodity Economy," Review of Political Economy, Taylor & Francis Journals, vol. 20(3), pages 367-391.
  • Handle: RePEc:taf:revpoe:v:20:y:2008:i:3:p:367-391
    DOI: 10.1080/09538250701661889
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    Cited by:

    1. Jonathan F. Cogliano & Roberto Veneziani & Naoki Yoshihara, 2016. "The Dynamics of Exploitation and Class in Accumulation Economies," Metroeconomica, Wiley Blackwell, vol. 67(2), pages 242-290, May.
    2. Wright, Ian, 2009. "Implicit Microfoundations for Macroeconomics," Economics - The Open-Access, Open-Assessment E-Journal, Kiel Institute for the World Economy (IfW), vol. 3, pages 1-27.
    3. Jonathan F. Cogliano & Roberto Veneziani & Naoki Yoshihara, 2018. "Exploitation, skills, and inequality," Working Paper Series 2018-01, Dickinson College, Department of Economics.
    4. Cockshott, Paul & Zachariah, David, 2014. "Conservation laws, financial entropy and the Eurozone crisis," Economics - The Open-Access, Open-Assessment E-Journal, Kiel Institute for the World Economy (IfW), vol. 8, pages 1-55.
    5. Cavalieri, Duccio, 2015. "Structural interdependence in monetary economics: theoretical assessment and policy implications," MPRA Paper 65526, University Library of Munich, Germany.
    6. Alejandro Agafonow & Havard Haarstad, 2009. "El socialismo del siglo XXI, ¿una alternativa factible?," Revista de Economía Institucional, Universidad Externado de Colombia - Facultad de Economía, vol. 11(20), pages 287-307, January-J.

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