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Theories of Value and the Monetary Theory of Production

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  • L. Randall Wray

    (The Jerome Levy Economics Institute)

Abstract

This paper extends earlier work (Wray 1991; see also Wray 1992b) that argued that liquidity preference theory should be interpreted as a theory of value. Here I will argue that two theories of value are needed for analysis of a monetary production economy: the labor theory of value and the liquidity preference theory of value. Both Keynes and Marx were trying to develop a monetary theory of production; Marx, of course, adopted a labor theory of value in his analysis, and it was previously argued that Keynes adopted a liquidity preference theory in his. A monetary theory of production should adopt both, however, and I will argue that Keynes seems to have recognized this. Further, Keynes did adopt labor hours as the measure of value and said he agreed that labor produces all value. I admit it is still a leap to claim that Keynes accepted both theories of value. Instead, I argue he should have adopted both and will show that this is consistent with the purposes of the General Theory.

Suggested Citation

  • L. Randall Wray, 1999. "Theories of Value and the Monetary Theory of Production," Macroeconomics 9902008, University Library of Munich, Germany.
    • Handle: RePEc:wpa:wuwpma:9902008
    Note: Type of Document - Acrobat PDF; prepared on IBM PC; to print on PostScript; pages: 35; figures: included
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    References listed on IDEAS

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    1. Avi J. Cohen, 1989. "Prices, Capital, and the One-Commodity Model in Neoclassical and Classical Theories," History of Political Economy, Duke University Press, vol. 21(2), pages 231-251, Summer.
    2. Roy J. Rotheim, 1981. "Keynes' Monetary Theory of Value (1933)," Journal of Post Keynesian Economics, Taylor & Francis Journals, vol. 3(4), pages 568-585, July.
    3. Fan-Hung, 1939. "Keynes and Marx on the Theory of Capital Accumulation, Money and Interest," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 7(1), pages 28-41.
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    Cited by:

    1. Javidanrad, Farzad, 2021. "Paradox of Monetary Profit, Shortage of Money in Circulation & Financialisation," The Warwick Economics Research Paper Series (TWERPS) 1365, University of Warwick, Department of Economics.
    2. Jochen Hartwig, 2004. "Keynes's multiplier in a two-sectoral framework," Review of Political Economy, Taylor & Francis Journals, vol. 16(3), pages 309-334.
    3. Desai, Milinf, 2010. "An exploration of money & interest in the theory of value," MPRA Paper 37315, University Library of Munich, Germany.
    4. Guglielmo Forges Davanzati & Rosario Patalano, 2017. "Marx on Public Debt: Fiscal Expropriation and Capital Reproduction," International Journal of Political Economy, Taylor & Francis Journals, vol. 46(1), pages 50-64, January.

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    JEL classification:

    • E - Macroeconomics and Monetary Economics

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