[OPE-L:1124] Re: individual prices in Volume 1

Fred Moseley (fmoseley@laneta.apc.org)
Mon, 19 Feb 1996 15:53:24 -0800

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Duncan (1094) has replied to me earlier post (1083) about whether Marx's
aggregate theory of price and suruplus-value is consistent with the
neoclassical equibrium theory of individual prices.

I think prices of production arise in a lot of particular cases of
neoclassical general equilibrium. I talked about this in my Bergamo paper
and cited Dana, Rose-Anne, Monique Florenzano, Cuong Le Van, and
Dominique Levy, Dominique. 1988b. Asymptotic Properties of a
Leontieff Economy. CEPREMAP Working Paper No 8814. Forthcoming
in the Journal of Economic Dynamics and Control for a more complete
examination of the issue. So it's not clear to me that there's any logical

I will check out the references you cite when I can. The main question I
will have in mind is precisely how the rate of profit is determined (i.e. is
the rate of profit determined in a way consistent with Marx's theory).

Duncan continued:

In considering the comparative statics or dynamics of the theories, we
should be careful to specify what variables are exogenous. You can't
shift the wage in neoclassical models, because they are an endogenous
variable. You could shift the wage, or the value of labor power, in some
Marxian/Classical models which take the real wage to be exogenous.

I guess I was thinking of neoclassical PARTIAL equilibrium theory, in which
the wage rate is exogeneous and a change in the wage rate shifts the supply
(cost) curve. If, in GENERAL equilibrium theory, one cannot shift the wage
variable, that in itself is a significant difference between Marx's theory
and neoclassical GE theory. It would also seem to be a significant way in
which Marx's theory is superior to neoclassical GE theory - it can at least
analyze this question which has been of immense practical significance
throughout the history of capitalism. Are you saying that GE theory cannot
even ask the question of the effects of a change in the money wage rate or
the real wage?