The law of value : a contribution to the classical approach to economic analysis

Wright, Ian Paul (2016). The law of value : a contribution to the classical approach to economic analysis. PhD thesis The Open University.



This thesis contributes to our understanding of the relationship between the material activity of human labour and the monetary forms of an economy by examining the theoretical foundations of the classical approach to economic analysis, in particular the objective costs-of-production approach to economic value.

The classical labour theory of value suffers from two related problems: David Ricardo's problem of an invariable measure of value and Karl Marx's transformation problem. This thesis proposes to resolve both problems by constructing a more general labour theory of value.

The more general theory provides a new perspective on related issues in the classical theory, including Marx's classification of money-capital as an irrational commodity, the meaning and significance of Piero Sraffa's standard commodity and Luigi Pasinetti's restriction of the labour theory to a normative role.

According to the classical account of capitalist competition the scramble for profit causes market prices to "gravitate" to natural prices. This thesis proposes a nonlinear dynamic model of classical gravitation in which prices and labour costs converge to a state of mutual consistency in equilibrium. The dynamic model, combined with a general labour theory of value, establishes a lawful relation between prices and labour costs, which reconstructs Marx's version of the classical "law of value".

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