Econometrica: Mar 1983, Volume 51, Issue 2

Actual Labor Values in a General Model of Production<435:ALVIAG>2.0.CO;2-R
p. 435-454

Peter Flaschel

In contrast to current counterfactual linear programming definitions of labor values this paper introduces an at least equivalent definition of such values for the general case of joint production which is exclusively based on actual data. This task is accomplished by extending Marx's concept of "individual values" from multiple activities to joint production by means of certain price ratios at those points where production data are insufficient to ensure the positiveness of "embodied labor time." Our approach generalizes the simple formula that relates labor values to monetary input-output tables, and it reformulates the labor theory of value in such a way that the "theoretical priority" of the case of a uniform composition of capital is reaffirmed.

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