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Price-Value Deviations and the Labor Theory of Value. Evidence from 42 Countries, 2000-2017

Author

Listed:
  • B. Güney Işıkara

    (New York University, Liberal Studies)

  • Patrick Mokre

    (Department of Economics, New School for Social Research)

Abstract

The relationship between prices and labour values has been the source of fruitful controversy since the earliest Classical Political Economists. The alleged refutation of the labour theory of value was an integral part of the marginalist attack against Classical and Marxist analysis. However, statistical analysis of price-value relationships made possible by the data available since the later 20th century suggest considerable empirical strength of the labour theory of value. We trace the intellectual history of the price-value relationship and its inseparable link to capitalist competition through Smith, Ricardo, Marx and Sraffa. Following Shaikh and Ochoa, we present an empirical model of testing their hypotheses that (1) labour values regulate prices of production and (2) serve as gravitational centers for market prices. The analysis of a large dataset of 42 countries and 15 years reveal only small and stable deviations and thus lend support to the Classical Political Economic analysis. With a sample of over 36,000 price vectors, we provide the most comprehensive empirical application of its class and generalize the results that have been established in the relevant literature.

Suggested Citation

  • B. Güney Işıkara & Patrick Mokre, 2020. "Price-Value Deviations and the Labor Theory of Value. Evidence from 42 Countries, 2000-2017," Working Papers 2003, New School for Social Research, Department of Economics.
    • Handle: RePEc:new:wpaper:2003
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    File URL: http://www.economicpolicyresearch.org/econ/2020/NSSR_WP_032020.pdf
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    References listed on IDEAS

    as
    1. Cockshott, W Paul & Cottrell, Allin F, 1997. "Labour Time versus Alternative Value Bases: A Research Note," Cambridge Journal of Economics, Cambridge Political Economy Society, vol. 21(4), pages 545-549, July.
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    Cited by:

    1. Luis Daniel Torres-González, 2020. "The Characteristics of the Productive Structure Behind the Empirical Regularities in Production Prices Curves," Working Papers 2016, New School for Social Research, Department of Economics.

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    More about this item

    Keywords

    Price; value; input-output; classical political economics; labour theory of value;
    All these keywords.

    JEL classification:

    • B12 - Schools of Economic Thought and Methodology - - History of Economic Thought through 1925 - - - Classical (includes Adam Smith)
    • B51 - Schools of Economic Thought and Methodology - - Current Heterodox Approaches - - - Socialist; Marxian; Sraffian
    • C67 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Input-Output Models
    • O57 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Comparative Studies of Countries
    • P16 - Political Economy and Comparative Economic Systems - - Capitalist Economies - - - Capitalist Institutions; Welfare State

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