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Labor Productivity and the Law of Decreasing Labor Content

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Listed author(s):
  • Peter Flaschel, Reiner Franke and Roberto Veneziani

    (Bielefeld University, Kiel University, Queen Mary University of London)

Abstract

This paper analyzes labor productivity and the law of decreasing labor content (LDLC) originally formulated by Farjoun and Machover (1983). First, it is shown that the standard measures of labor productivity may be rather misleading, owing to their emphasis on monetary aggregates. Instead, the conventional classical-Marxian labor values provide the theoretically and empirically sound measures of labor productivity. The notion of labor content and the LDLC are therefore central in order to understand the dynamics of capitalist economies. Second, some rigorous theoretical relations between different forms of profit-driven technical change and productivity are derived in a general input-output framework with fixed capital, which provide deterministic foundations to the LDLC. Third, the main theoretical propositions are analyzed empirically based on a new dataset of the German economy. JEL Categories: B51, D57, O33, C67

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Paper provided by University of Massachusetts Amherst, Department of Economics in its series UMASS Amherst Economics Working Papers with number 2010-11.

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Date of creation: Sep 2010
Handle: RePEc:ums:papers:2010-11
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Keywords: labor productivity; law of falling labor content; technical change; labor values; Input-Output analysis.;

Other versions of this item:

Find related papers by JEL classification:
  • B51 - Schools of Economic Thought and Methodology - - Current Heterodox Approaches - - - Socialist; Marxian; Sraffian
  • D57 - Microeconomics - - General Equilibrium and Disequilibrium - - - Input-Output Tables and Analysis
  • O33 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes
  • C67 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Input-Output Models

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Cited by:

  1. Yoshihara, Naoki & Veneziani, Veneziani, 2013. "The measurement of labour content: a general approach," CCES Discussion Paper Series 47, Center for Research on Contemporary Economic Systems, Graduate School of Economics, Hitotsubashi University.
  2. 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, 05.
  3. repec:ums:papers:2014-010 is not listed on IDEAS
  4. Veneziani, Roberto & Yoshihara, Naoki, 2014. "One Million Miles to Go: Taking the Axiomatic Road to Defining Exploitation," Discussion Paper Series 615, Institute of Economic Research, Hitotsubashi University.
  5. Jonathan F. Cogliano, 2017. "Surplus Value Production and Realization in Marxian Theory - Applications to the U.S., 1987-2015," Working Paper Series 2017-01, Dickinson College, Department of Economics.
  6. Flaschel, Peter & Fröhlich, Nils & Veneziani, Roberto, 2011. "The sources of profitability," MPRA Paper 30861, University Library of Munich, Germany.
  7. Naoki Yoshihara & Roberto Veneziani, 2017. "The measurement of labour content: a general approach," Working Papers SDES-2017-17, Kochi University of Technology, School of Economics and Management, revised Sep 2017.
  8. Roberto Veneziani & Naoki Yoshihara, 2017. "One million miles to go: taking the axiomatic road to defining exploitation," Working Papers SDES-2017-12, Kochi University of Technology, School of Economics and Management, revised Aug 2017.
  9. Yoshihara, Naoki & Veneziani, Roberto, 2017. "The measurement of labour content: a general approach," Discussion Paper Series 663, Institute of Economic Research, Hitotsubashi University.

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