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The labour theory of value: a marginal analysis

Hagendorf, Klaus (2008): The labour theory of value: a marginal analysis.

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Abstract

The difficulties of the classical and Marxian labour theory of value are overcome when labour value is understood as cost, analogously to marginal cost as marginal labour value. Marginal labour value is the reciprocal of the marginal productivity of labour. Under “perfect ompetition” relative prices are equal to the ratio of marginal labour values. Indeed, Pareto-optimality implies the validity of the labour theory of value. But it is shown that, in principle, a capitalist system can never be in a Pareto-optimal state. To assure a maximum productivity of labour, and therefore minimum socially necessary labour values, society has to overcome capitalism and organise the formation and control over capital collectively. This article presents the marginal approach to the labour theory of value.

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