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Exploitation and Profits: A General Axiomatic Approach in Convex Economies with Heterogeneous Agents

Author

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  • Roberto Veneziani

    () (Queen Mary University of London)

  • Naoki Yoshihara

    () (Hitotsubashi University)

Abstract

This paper provides an innovative axiomatic analysis of the notion of exploitation as the unequal exchange of labour, focusing on the relation between exploitation and profits. General convex economies with heterogeneous agents endowed with unequal amounts of physical and human capital are considered. An axiomatic characterisation of the class of definitions that preserve the Fundamental Marxian Theorem (FMT) in this general context is derived. It is shown that none of the main received definitions preserves the FMT. Instead, a definition related to the `New Interpretation' (Dumenil, 1980; Foley, 1982) is presented which preserves the FMT and allows one to generalise a number of key insights of exploitation theory to complex advanced economies. JEL Categories: D63; D70; B51; D51.

Suggested Citation

  • Roberto Veneziani & Naoki Yoshihara, 2010. "Exploitation and Profits: A General Axiomatic Approach in Convex Economies with Heterogeneous Agents," UMASS Amherst Economics Working Papers 2010-12, University of Massachusetts Amherst, Department of Economics.
  • Handle: RePEc:ums:papers:2010-12
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    References listed on IDEAS

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    1. Roberto Veneziani & Naoki Yoshihara, 2011. "Strong Subjectivism In The Marxian Theory Of Exploitation: A Critique," Metroeconomica, Wiley Blackwell, vol. 62(1), pages 53-68, February.
    2. Gérard Duménil & Duncan Foley & Dominique Lévy, 2009. "A Note On The Formal Treatment Of Exploitation In A Model With Heterogenous Labor," Metroeconomica, Wiley Blackwell, vol. 60(3), pages 560-567, July.
    3. Takao Fujimoto & Arrigo Opocher, 2010. "Commodity Content In A General Input-Output Model: A Reply To Bellino, Yoshihara And Veneziani," Metroeconomica, Wiley Blackwell, vol. 61(4), pages 754-758, November.
    4. Foley, Duncan K., 1982. "Realization and accumulation in a Marxian model of the circuit of capital," Journal of Economic Theory, Elsevier, vol. 28(2), pages 300-319, December.
    5. Tadasu Matsuo, 2008. "Profit, Surplus Product, Exploitation And Less Than Maximized Utility: A New Equivalence Proposition On The Fundamental Marxian Theorem," Metroeconomica, Wiley Blackwell, vol. 59(2), pages 249-265, May.
    6. Negishi, Takashi, 1998. "Marx, economies of scale, and the falling rate of profit," Japan and the World Economy, Elsevier, vol. 10(3), pages 253-263, July.
    7. John E. Roemer, 1986. "Equality of Resources Implies Equality of Welfare," The Quarterly Journal of Economics, Oxford University Press, vol. 101(4), pages 751-784.
    8. Morishima, Michio, 1974. "Marx in the Light of Modern Economic Theory," Econometrica, Econometric Society, vol. 42(4), pages 611-632, July.
    9. Yoshihara, Naoki, 2010. "Class and exploitation in general convex cone economies," Journal of Economic Behavior & Organization, Elsevier, vol. 75(2), pages 281-296, August.
    10. Flaschel, Peter, 1983. "Actual Labor Values in a General Model of Production," Econometrica, Econometric Society, vol. 51(2), pages 435-454, March.
    11. Yoshihara, Naoki, 2003. "Characterizations of bargaining solutions in production economies with unequal skills," Journal of Economic Theory, Elsevier, vol. 108(2), pages 256-285, February.
    12. Yoshihara, Naoki & Veneziani, Roberto, 2009. "Exploitation as the Unequal Exchange of Labour : An Axiomatic Approach," Discussion Paper Series a524, Institute of Economic Research, Hitotsubashi University.
    13. Reiko Gotoh & Naoki Yoshihara, 2003. "A class of fair distribution rules à la Rawls and Sen," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 22(1), pages 63-88, August.
    14. Roberto Veneziani, 2004. "The Temporal Single-system Interpretation of Marx's Economics: A Critical Evaluation," Metroeconomica, Wiley Blackwell, vol. 55(1), pages 96-114, February.
    15. Roberto Veneziani & Naoki Yoshihara, 2010. "Exploitation and Profits: A General Axiomatic Approach in Convex Economies with Heterogeneous Agents," UMASS Amherst Economics Working Papers 2010-12, University of Massachusetts Amherst, Department of Economics.
    16. Veneziani, Roberto, 2007. "Exploitation and time," Journal of Economic Theory, Elsevier, vol. 132(1), pages 189-207, January.
    17. Roberto Veneziani, 2012. "Analytical Marxism," Journal of Economic Surveys, Wiley Blackwell, vol. 26(4), pages 649-673, September.
    18. Sylla, Richard, 1998. "Comments on "Marx, economies of scale, and the falling rate of profit" by T. Negishi," Japan and the World Economy, Elsevier, vol. 10(3), pages 265-266, July.
    19. Sen, Amartya K, 1978. "On the Labour Theory of Value: Some Methodological Issues," Cambridge Journal of Economics, Oxford University Press, vol. 2(2), pages 175-190, June.
    20. Takao Fujimoto & Arrigo Opocher, 2010. "Commodity Content In A General Input-Output Model," Metroeconomica, Wiley Blackwell, vol. 61(3), pages 442-453, July.
    21. Fleurbaey Marc, 1995. "Three Solutions for the Compensation Problem," Journal of Economic Theory, Elsevier, vol. 65(2), pages 505-521, April.
    22. Roemer, John E, 1980. "A General Equilibrium Approach to Marxian Economics," Econometrica, Econometric Society, vol. 48(2), pages 505-530, March.
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    Cited by:

    1. Yoshihara, Naoki & Roberto Veneziani, 2011. "Exploitation of Labour and Exploitation of Commodities: A "New Interpretation"," Discussion Paper Series 556, Institute of Economic Research, Hitotsubashi University.
    2. Veneziani, Roberto & Yoshihara, Naoki, 2010. "Exploitation and Profits: A General Axiomatic Approach in Convex Economies with Heterogeneous Agents," Discussion Paper Series 542, Institute of Economic Research, Hitotsubashi University.

    More about this item

    Keywords

    Exploitation; convex economies; heterogeneous agents; New Interpretation.;

    JEL classification:

    • D63 - Microeconomics - - Welfare Economics - - - Equity, Justice, Inequality, and Other Normative Criteria and Measurement
    • D70 - Microeconomics - - Analysis of Collective Decision-Making - - - General
    • D51 - Microeconomics - - General Equilibrium and Disequilibrium - - - Exchange and Production Economies
    • B51 - Schools of Economic Thought and Methodology - - Current Heterodox Approaches - - - Socialist; Marxian; Sraffian

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