Labour Values and the Theory of the Firm, Part I: The Competitive Firm
36 Pages Posted: 18 Oct 2009 Last revised: 21 Dec 2009
Date Written: October 15, 2009
This paper is the first part of a Marxian critique of the theory of the firm, focusing on the analysis of labour values. Starting from Adam Smith's example of the deer hunter marginal analysis is introduced, culminating in the derivation of the Labour Value Function as the supply curve of the competitive firm in terms of labour values. The analysis is based on a new definition of labour value, which is Marxian in spirit and respects explicitly production conditions and by this becomes an integral part of modern mathematical optimization methods not found in Marx. The analysis offers a further development and coherent interpretation of Marx's value theory. The analysis is limited to the case of the competitive firm.
Keywords: Marxian economics, labour theory of value, value theory, marginal analysis, microeconomics, theory of the firm, marginal cost, the labour value function, supply function, Adam Smith
JEL Classification: A13, B14, B24, B51, D21, D41, D46
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