Value, Competition and Exploitation
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Value, Competition and Exploitation

Marx's Legacy Revisited

Jonathan F. Cogliano, Peter Flaschel, Reiner Franke, Nils Fröhlich and Roberto Veneziani

This book provides a comprehensive and rigorous, yet accessible, analysis of classical and Marxian price and value theory using the tools of contemporary economic analysis. The broad conceptual framework and methodology of Marx and the classical authors offers interesting and relevant perspectives on the basic structure and evolution of modern capitalist economies. Arguably, the book provides a deeper and more nuanced understanding of today's economic problems than can be gained via mainstream approaches.
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Chapter 5: The von-Neumann-Sraffa Model

Jonathan F. Cogliano, Peter Flaschel, Reiner Franke, Nils Fröhlich and Roberto Veneziani

Abstract

In the previous chapters, we have examined classical production prices in linear models in which each industrial sector produces a single output—also known as the basic Leontief model. We have proved that, under some general assumptions on technology, production prices are well-defined, unique and strictly positive. We have interpreted these production prices as a long-period equilibrium: prices of production emerge when capitalist profit-maximizing behavior, and workers’ competition for jobs, ensure that a uniform profit rate and a uniform wage rate emerge in all sectors. Furthermore, under some additional mild assumptions, all sectors are operated in a classical long-period equilibrium.

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