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The Linear Programming Approach to Values Analysis

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  • Mario COGOY

Abstract

Critics of the labour Theory of value have recently pointed out that a value determination procedure based on input-ouput equations will lead, in the case of joint production, to contradictory results such as negative values and a negative rate of exploitation in economically viable systems (Steedman (1975)). These paradoxical results follow directly from Sraffa’s findings on negative employment multipliers in joint production systems (Sraffa (1960), §70) and seem to undermine any attempt at giving a picture of an economy in terms of embodied labour, at least as long as quantities of embodied labour are determined by means of input-output equations. On the other hand it has been shown by Morishima (Morishima (1973); Morishima (1974)) that it is possible to reformulate the labour theory of value in terms of linear programs based on the inequality restrictions in such a way that the paradox of negative values disappears. Before going to into the discussion of the linear programming approach to value analysis it might be interesting to state the reason why the paradox of negative values can be avoided by substituting input-output equations with inequality restrictions.

Suggested Citation

  • Mario COGOY, 1981. "The Linear Programming Approach to Values Analysis," Discussion Papers (REL - Recherches Economiques de Louvain) 1981022, Université catholique de Louvain, Institut de Recherches Economiques et Sociales (IRES).
    • Handle: RePEc:ctl:louvre:1981022
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