Generalizing the New Interpretation of the Marxian Value Theory: A Simulation Analysis with Stochastic Profit Rate and Labor Heterogeneity

Sang B. Hahn and Dong-Min Rieu

Review of Political Economy, 2017, vol. 29, issue 4, 597-612

Abstract: This article elucidates the relation between price and labor content in the context of generalizing the New Interpretation of Marxian value theory. We examine a generalized New Interpretation in a linear economic model introducing a differential value-creating capacity of different concrete labors, which regards price, value and the profit rate as random variables. Simulations are performed by constructing stochastic models with labor heterogeneity in two comparable ways. Considering that the standard New Interpretation suffers from the indeterminacy of the skilled labor reduction criterion without the assumption of an equalized rate of surplus value, it is hoped that the results of this analysis provide a research guideline for bridging the theoretical gap.

Date: 2017
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DOI: 10.1080/09538259.2018.1424067

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