Skip to content

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

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

Işıkara Güney and Mokre Patrick (2021): Price-Value Deviations and the Labor Theory of Value. Evidence from 42 Countries, 2000-2017. Review of Political Economy, DOI: 10.1080/09538259.2021.1904648.

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

JEL Classification: B12, B51, C67, O57, P16 

Inter-Industry Wage Inequality: Persistent differences and turbulent equalization

Inter-Industry Wage Inequality: Persistent differences and turbulent equalization published on

Mokre Patrick and Rehm Miriam, 2020. “Inter-Industry Wage Inequality: Persistent differences and turbulent equalization,” Cambridge Journal of Economics.

Abstract

The empirical stylised fact of persistent inter-industry wage differentials is an enduring challenge to economic theory. This paper applies the classical theory of ‘real competition’ to the turbulent dynamics of these inter-industrial wage differentials.

Theoretically, we argue that competitive wage determination can be decomposed into equalising, dispersing and turbulently equalising factors. Empirically, we show graphically and econometrically for 31 US industries in 1987–2016 that wage differentials, like regulating profit rates, are governed by turbulent equalisation. Furthermore, we apply a fixed-effects OLS as well as a hierarchical Bayesian inference model and find that the link between regulating profit rates and wage differentials is positive, significant and robust.


Ausnahmezustand Geringverdienst? Ursachen der Beschäftigungsverhältnisse unter der Steuergrenze. (German)

Ausnahmezustand Geringverdienst? Ursachen der Beschäftigungsverhältnisse unter der Steuergrenze. (German) published on

Mokre Patrick (2019), Ausnahmezustand Geringverdienst? Ursachen der Beschäftigungsverhältnisse unter der Steuergrenze. Wirtschaft und Gesellschaft 2019, Band 45 Nr.2, S. 203-227

Abstract

Wage income lower than the minimum threshold for taxation is an exception. However, the share of low-income earners in Austria is substantial: A quarter of all wage earners and 12% of all employees. The extensive literature on the subject agrees that low income is an exceptional situation that can be traced to atypical employment and demographic factors. Based on the 2016 micro-census, I estimate the impact of both demographic and labor relations-factors on low-income susceptibility. I conclude that low income in Austria is more likely to affect women and young people, workers with lower formal education, those with care responsibilities, part-time employees and temporary workers.

Primary Sidebar