Introduction

We have shown that the traditional Marxian notion that equilibrium prices must be the vector of equal-profit-rate prices can be imbedded in a general equilibrium framework using the idea of reproducibility, at least in a linear, Leontief model. The task now is to investigate how robust these ideas are if we consider more general technologies. In particular, we shall focus on two important ideas: the existence of reproducible solutions for economies with more general specifications of production, and the validity of the fundamental Marxian theorem – that exploitation is synonymous with positive profits. In Chapter 3 we investigate a third important idea – whether equilibrium prices equalize profit rates among sectors in these more general models.

The answer is that the Marxian concepts, as discussed in Chapter 1, remain tractable, and the important theorems do generalize to a production environment in which capitalists face general, convex production sets. Thus, the ideas developed by Morishima (1973), Wolfstetter (1973), Okishio (1961), von Weizsäcker (1973), Maarek (1975), Brody (1970), and others for linear, Leontief models, and generalized by Morishima (1974) to von Neumann production models, are shown here to depend not at all on the activity analysis specification of production. Convexity suffices to define the concept of exploitation, and to verify the equivalence of profit making and exploitation.

Carrying out the analysis for convex production sets is instructive for another reason: It makes clear precisely which aspects of classical Marxian value theory are not robust, but incidental to the main story.