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Tag Archives: Karl Marx

Karl Marx’s Law of Value in the Twilight of Capitalism — Murray Smith

Global capitalism, with humanity in tow, is now facing a triple crisis: a deepening structural contradiction of the capitalist mode of production, one manifested as a multi-dimensional crisis of ‘valorisation’ – that is to say, a crisis in the production of ‘surplus-value’, the very lifeblood of the profit system; an acute crisis in international relations stemming from the fact that the global productive forces are bursting the confines of the nation-state system, whose individual units...

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Why Does The Labor Theory Of Value Work Empirically As A Theory Of Prices?

Anwar Shaikh On The Transformation Problem Lots of empirical work shows that prices tend to be proportion to the labor embodied in commodities. My references in this article document this claim. Furthermore, empirical wage-rate of profits curves tend to be close to straight lines. This is not what, say, Sraffa' mathematical economics would lead me to expect. What explains these surprising empirical findings? Almost 34 minutes in, in the above video, Shaikh makes the...

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Productivity, Labor Complexity, and Wage Determination Procedures — Peter Cooper

This post concerns an implication of Marx’s treatment of productivity and labor complexity for the appropriateness of alternative processes of wage determination. For simplicity, it is assumed that all activity is productive in Marx’s sense (that is, productive of surplus value) and that conditions are competitive in the Marxian (and classical) sense that investment is free to flow in and out of sectors in search of the highest return. Introducing unproductive labor, including a substantial...

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Michael Roberts Blog: blogging from a marxist economist — Minsky and socialism

Minsky’s journey from socialism to stability for capitalist profitability comes about because he and the post-Keynesians deny and/or ignore Marx’s law of value, just as the ‘market socialists’, Lange and Lerner, did. The post-Keynesians and MMTers deny/ignore that profit comes from surplus value extracted by exploitation in the capitalist production process and it is this that is the driving force for investment and employment. They ignore the origin and role of profit, except as a residual...

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Marx’s concept of socialism — Peter Hudis

Marx of course supports collective ownership of the means of production. But by this he does not mean simply transferring ownership deeds from private to collective entities, but rather ensuring that the working class owns and controls the means of production. He makes this clear in writing, “When one speaks of private property, one is dealing with something external to man. When one speaks of labour, one is directly dealing with man himself. This new formulation of the question already...

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The Cambridge Equation, Expanded Reproduction, and Markup Pricing: An Example

1.0 Introduction I have sometimes set out Marx's model of expanded reproduction, only with prices of production instead of labor values. I assume two goods, a capital good and a consumption good, are produced with constant technology. If one assumes workers spend all their wages and capitalists save a constant proportion of profits, one can derive the Cambridge equation in this model. The Cambridge equation shows that, along a steady state growth path, the economy-wide rate of profits is...

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Literature Distinguishing Large Corporations And Finance From Competitive Firms

A considerable body of literature has been published, during the last century, arguing that a movement away from competitive markets must be recognized in trying to describe and understanding contemporary capitalism. The literature I am thinking of emphasizes big business, corporations, and finance. Here are some selections, not all of which I have read: Rudolf Hilferding (1910). Finance Capital: A study of the latest phase of capitalist development. Adolfe A. Berle and Means (1932). The...

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The Rate of Profits is Not the Scale Factor

Figure 1: Rate of Profits Unequal to Scale Factor for Rate of Profits This post continues the example in the previous post. I modify the prices equations so that the rate of profits in producing corn is (s1 r̂), and the rate of profits in producing ale is (s2 r̂). The solution to the price equations are: pcorn = 16 [16 + (s1 - s2) r̂]/[204 + (3 s1 + 9 s2) r̂] pale = 32 [10 - (s1 - 3 s2) r̂]/[204 + (3 s1 + 9 s2) r̂] w = 4 [51 - (9 s1 + 5 s2) r̂ - s1s2 r̂2]/[204 + (3 s1 + 9 s2) r̂]...

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An Example Of The Labor Theory Of Value

Figure 1: Variation of Prices of Production with Wages and Markups1.0 Introduction This post documents an example in my working paper, The Labor Theory of Value and Sraffa's Standard Commodity with Markup Pricing. 2.0 Technology Consider a simple economy in which corn and ale are each produced from inputs of labor, corn, and ale. Inputs for unit outputs are shown in the columns in Table 1. Obviously, the units of measure should not be taken serious. Inputs are totally used up in the...

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Michael Roberts — US rate of profit measures for 2018

Every year, I look at measuring the US rate of profit a la Marx. Official data are now available in order to update the measurement for 2018 (not 2019 yet!). As usual, if you wish to replicate my results, I again refer you to the excellent manual for doing so, kindly compiled by Anders Axelsson from Sweden.There are many ways to measure the rate of profit a la Marx (for the various ways, see http://pinguet.free.fr/basu2012.pdf). As previously, I start with an update of the measure used by...

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