VALUE AND DISTRIBUTION IN THE CLASSICAL ECONOMISTS AND MARX 1

Abstract

1. THE theory of value and distribution is at present in a situation of unease and uncertainty: we no longer find the same general agreement about its basic elements which obtained until a few decades ago. Two main theoretical developments have undermined the dominant theory which explained distribution and relative prices by means of the of the two opposing sets of forces, and for of The first development in order of time has been Keynes's refutation of the doctrine according to which a competitive economic system tends towards the full employment of labour, i.e. towards that equilibrium between demand and supply of labour, which was to determine the wage. Keynes' concentration on the short period, and the persistence in the General Theory of many traditional premises favoured the successive attempts to reconcile his results with orthodox long-period analysis: but the weakening of the dominant theory which nonetheless resulted from his work can be seen both in the uneasiness which, in ever-changing forms, characterizes the renewed orthodoxy, and in the tendency of Keynes' direct followers towards a more radical departure from traditional theory. The second development consists in the critique of the notion of as a factor of measurable independently of distribution.2 This critique has shown the invalidity of some propositions of the theory, like the inverse relation between the rate of interest (rate of profit) and the quantity of capital per worker, which are basic for the explanation of distribution in terms of and for factors of production. The uncertainty which has resulted from these developments finds its expression in authors who think that new theoretical approaches should be explored. It is also revealed by the nature of some of the work carried out by those who adhere to the traditional approach.3 1 This paper which develops under the impact of Sraff a's production of commodities by means of commodities some propositions contained in a Ph.D dissertation of 1955-1958, is based on notes delivered at a conference on Marx's Transformation of Values into Prices of Production held in Siena in 1972, and used then for lectures given in Cambridge and elsewhere since