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On dynamic price formation in the course of capital reallocation driven by differential rates of profit: strict conservation of value supports Karl Marx's theory

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  • Norbert Ankri
  • Paikan Marcaggi

Abstract

We develop a three-sector model in which Marx's aggregate equalities (total price equals total value; total profit equals total surplus value) restrict a sequence of fully realized states during capital reallocation and technical diffusion. Anchoring one sector's profit rate to the contemporaneous average selects a trajectory without modeling pricing intentions. Before innovation, capital inflow lowers the receiving sector's price and excess profitability along calibrated stable paths, without a demand function. Stability is predictable from value and technical data; near a stable equalization, the receiver's profit rate falls even where its price rises. A labor-saving, capital-intensifying innovation creates temporary extra surplus value and revalues committed capital. At constant real wages the final uniform rate rises, as Okishio predicts; when rising wages keep exploitation constant, it falls.

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  • Norbert Ankri & Paikan Marcaggi, 2026. "On dynamic price formation in the course of capital reallocation driven by differential rates of profit: strict conservation of value supports Karl Marx's theory," Papers 2609.29346, arXiv.org, revised Oct 2026.
    • Handle: RePEc:arx:papers:2609.29346
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    2. 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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