Price-Value Deviations and the Labor Theory of Value. Evidence from 42 Countries, 2000-2017

B. Güney Işıkara () and Patrick Mokre ()
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B. Güney Işıkara: New York University, Liberal Studies
Patrick Mokre: Department of Economics, New School for Social Research

No 2003, Working Papers from New School for Social Research, Department of Economics

Abstract: The relationship between prices and labour values has been the source of fruitful controversy since the earliest Classical Political Economists. The alleged refutation of the labour theory of value was an integral part of the marginalist attack against Classical and Marxist analysis. However, statistical analysis of price-value relationships made possible by the data available since the later 20th century suggest considerable empirical strength of the labour theory of value. We trace the intellectual history of the price-value relationship and its inseparable link to capitalist competition through Smith, Ricardo, Marx and Sraffa. Following Shaikh and Ochoa, we present an empirical model of testing their hypotheses that (1) labour values regulate prices of production and (2) serve as gravitational centers for market prices. The analysis of a large dataset of 42 countries and 15 years reveal only small and stable deviations and thus lend support to the Classical Political Economic analysis. With a sample of over 36,000 price vectors, we provide the most comprehensive empirical application of its class and generalize the results that have been established in the relevant literature.

Keywords: Price; value; input-output; classical political economics; labour theory of value (search for similar items in EconPapers)
JEL-codes: B12 B51 C67 O57 P16 (search for similar items in EconPapers)
Pages: 37 pages
Date: 2020-04
New Economics Papers: this item is included in nep-hme and nep-pke
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Citations: View citations in EconPapers (1)

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