The Labour Theory of Value: A Marginal Analysis
38 Pages Posted: 13 Nov 2011 Last revised: 28 Mar 2014
Date Written: March 27, 2014
This article presents the marginal approach to the labour theory of value. The difficulties of the classical and Marxian labour theory of value are overcome when labour value is understood as marginal labour value analogously to marginal cost. Marginal labour value is the reciprocal of the marginal productivity of labour. Under perfect competition relative prices are equal to the ratio of marginal labour values; indeed, Pareto-optimality implies the validity of the labour theory of value but in general, even in a Pareto optimal state, there is exploitation. It is shown that in principle, a capitalist system can never be in a Pareto-optimal state. To assure a maximum productivity of labour and therefore minimum socially necessary labour values, society has to assure the socially necessary accumulation of capital and to organise the formation and control over capital democratically and collectively, a Pareto-optimum without exploitation.
Keywords: Capital Accumulation, Cost Theory, Exploitation, Labour Theory of Value, Marginal Analysis, Marxism, General Economic Equilibrium
JEL Classification: B10, B14, B24, B51, D21, D33, D46
Suggested Citation: Suggested Citation