2023/03/13 by Christian Flamant, Flamant, Christian
Economics, Econometrics and Finance · Social Sciences · #Economic Theory and Policy #Political Economy and Marxism
paper · pdf · doi:10.48550/arxiv.2303.09399
This book starts from the basic questions that had been raised by the\nfounders of Economic theory, Smith, Ricardo, and Marx: what makes the value of\ncommodities, what are production, exchange, money and incomes like profits,\nwages and rents. The answers that these economists had provided were mostly\nwrong, above all by defining the equivalence of commodities at the level of\nexchange, but also because of a confusion made between values and prices, and\nwrong views of what production really is and the role of fixed capital. Using\nthe mathematical theory of measurement and the physical theory of dimensional\nanalysis, this book provides a coherent theory of value based on an equivalence\nrelation not at the level of exchange, but of production. Indeed exchange is\nconsidered here as an equivalence relation between money and a monetary price,\nand not between commodities, modern monetary theory having demonstrated that\nmoney is not a commodity. The book rejects the conception of production as a\nsurplus, which owes much to Sraffa's theory of production prices, and is shown\nto be severely flawed. It founds the equivalence of commodities at the level of\na production process considered as a transformation process. It rehabilitates\nthe labor theory of value, based on the connection between money and labor due\nthe monetary payment of wages, which allows the homogenization of various kinds\nof concrete labor into abstract labor. It shows that value is then a dimension\nof commodities and that this dimension is time, i.e. the time of physics. On\nthis background, the book shows that the calculation of values for all\ncommodities is always possible, even in the case of joint production, and that\nthere cannot be any commodity residue left by this calculation. As a further\nstep, this book provides a coherent theory of the realization of the product,\nwhich occurs in the circulation process. Using an idea - the widow's cruse -\nintroduced by Keynes in his Treatise on Money, it brings to light the mechanism\nbehind the transformation of money values into money prices and of\nsurplus-value into profits and other transfer incomes, ensuring the formation\nof monetary profits. The book sheds some light on the rate of profit, its\ndeterminants and its evolution, showing in particular the paramount importance\nof capitalist consumption as one of its main determinants. In passing it\nexplains the reasons why in the real world there is a multiplicity of profit\nrates. Finally, it allows to solve in a precise and illustrated way the\nproblems raised by the Marxist law of the tendency of the rate of profit to\nfall. Most of the results obtained translate into principles, the first ones\nbeing truly basic, the following ones less basic, but all of them being\nfundamental. All in all, this book might provide the first building blocks to\ndevelop a full-fledged and scientific economic theory to many fellow\neconomists, critical of neo-classical theory, but who have not yet dicovered\nthe bases of a complete and coherent alternative.\n