Is It An Equilibrium Theory?
Some Marxists such as Thomas T. Sekine have interpreted Marx's law of value as a purely theoretical principle of market equilibrium which has no application to empirical reality. This raises the question of how we verify that it is a "law" at all. Others such as Paul Mattick argued that Marx offered no theory of market equilibrium, only a dynamic theory of enlarged economic reproduction. In reality, markets were rarely in equilibrium anyway (that was more a hypothesis used by economists, or a euphemism for "price stability"), and what explained the market behaviour of individuals and groups was precisely the imbalances between supply and demand propelling them into action. On this interpretation, capitalist development is always imbalanced development which, typically, the state tries to mitigate or compensate for.
Read more about this topic: Law Of Value
Other articles related to "is it an equilibrium theory, equilibrium, theory":
... The difference between the equilibrium theories of neoclassical economists and Marx's theory of the regulation of trade can be illustrated with a simple analogy ... of many different economic trends this is sometimes referred to as "dynamic equilibrium", but it is often no longer clear what exactly is being equilibrated, or what ... It is more a theory of how to prevent the decline or collapse of the circulation of commodities, money and capital, or promote balanced growth on some definition ...
Famous quotes containing the word equilibrium:
“They who feel cannot keep their minds in the equilibrium of a pair of scales: fear and hope have no equiponderant weights.”
—Horace Walpole (17171797)