Feng, Zhao; Zhang, Jianbao; Luo, Zhen
A icle
Ma ke compe i ion, labo alue and p ice: A Ma xis
disequilib ium heo e ical and empi ical amewo k
China Poli ical Economy (CPE)
P o ided in Coope a ion wi h:
School o Economics, Nanjing Uni e si y
Sugges ed Ci a ion: Feng, Zhao; Zhang, Jianbao; Luo, Zhen (2024) : Ma ke compe i ion, labo alue
and p ice: A Ma xis disequilib ium heo e ical and empi ical amewo k, China Poli ical Economy
(CPE), ISSN 2516-1652, Eme ald, Leeds, Vol. 7, Iss. 1, pp. 47-71,
h ps://doi.o g/10.1108/CPE-06-2024-040
This Ve sion is a ailable a :
h ps://hdl.handle.ne /10419/319474
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Ma ke compe i ion, labo alue and
p ice: a Ma xis disequilib ium
heo e ical and empi ical amewo k
Feng Zhao
School o Economics, Renmin Uni e si y o China, Beijing, China and
Na ional Resea ch Cen e o Poli ical Economy o Socialism wi h Chinese
Cha ac e is ics, Renmin Uni e si y o China, Beijing, China
Jianbao Zhang
School o Economics, Renmin Uni e si y o China, Beijing, China, and
Zhen Luo
School o Economics, Sichuan Uni e si y, Chengdu, China
Abs ac
Pu pose –The co ela ions and de ia ions be ween ma ke p ices, p oduc ion p ices and alues a e c i ical
indexes o es ing he labo heo y o alue. Howe e , he e is no ye a uni e sally accep ed me hod o sol ing
o he p oduc ion p ice ec o , and gi en he complexi y and ola ili y o economic dynamics, p oduc ion p ices
based on he assump ion o economic equilib ium canno be accu a e measu ing. This pape a emp s o p opose
a new app oach o es he labo heo y o alue.
Design/me hodology/app oach –This pape p oposes a di e en app oach. F om he pe spec i e o
disequilib ium p ice, he pape deduces ha he ange o he ela i e p ices o commodi ies is de e mined by he
ela i e alue, he a e o su plus- alue and he echnical s uc u e o p oduc ion inpu s, wi h ela i e p ice
luc ua ing wi hin he alue ange speci ied by he labo heo y o alue unde ma ke compe i ion in luences.
Findings –Wi h empi ical esea ch esul s based on China’s economic da a, his pape no only a i ms he
scien i ic and p ac ical explana o y powe o he labo heo y o alue in a mo e gene al sense bu also unco e s
how su plus alue is dis ibu ed ac oss sec o s, which can be used o analyze ma ke compe i ion and echnical
ela ions and hei impac s on indus ial s uc u e and dis ibu ion.
O iginali y/ alue –The disequilib ium analy ical amewo k p o ides a new pe spec i e o he empi ical
s udy o labo heo y o alue. Mo eo e , i e ol es he labo heo y o alue in o a obus empi ical amewo k,
b eaking h ough he heo e ical pa h o he adi ional labo heo y o alue ha is mos ly limi ed o he
no ma i e discussion o exploi a ion.
Keywo ds Disequilib ium, Labo heo y o alue, Rela i e p ice, Rela i e alue
Pape ype T ansla ed pape
1. In oduc ion
The labo heo y o alue is he co ne s one o scien i ic Ma xis economics and emains a
highly con o e sial a ea wi hin bo h Ma xis economis s and o he economic schools. One o
he mos amous and endu ing con o e sies lies in he so-called “ ans o ma ion p oblem”. In
pa icula , a e Wo ld Wa II, heo e ical ques ions on his opic we e in oduced om Ge man
academic ci cles o English-speaking schola s, no ably h ough he wo k o Paul Sweezy. This
in usion o ideas spa ked ex ensi e and sys ema ic esea ch by Ma xis economis s, aimed a
de ending he labo heo y o alue agains heo e ical c i icisms, as well as e ining and
u he de eloping Ma x’s o iginal concep s ega ding he labo heo y o alue. Rele an
s udies mainly ollow he ollowing wo esea ch app oaches.
China Poli ical
Economy
47
© Feng Zhao, Jianbao Zhang and Zhen Luo. O iginally published in Simpli ied Chinese in Nankai
Economic S udies in 2023: Zhao, F. Zhang, J. and Luo Z. (2023), “Ma ke Compe i ion, Labo Value, and
P ice: A Ma xis Disequilib ium Theo e ical and Empi ical F amewo k”, Nankai Economic S udies, Vol.
2023 No.11, pp 51-71. DOI: 10.14116/j.nkes.2023.11.004
This is a ansla ion o an a icle o iginal pos a : h ps://doi.o g/10.14116/j.nkes.2023.11.004
The cu en issue and ull ex a chi e o his jou nal is a ailable on Eme ald Insigh a :
h ps://www.eme ald.com/insigh /2516-1652.h m
Recei ed 24 Sep embe 2024
Accep ed 24 Sep embe 2024
China Poli ical Economy
Vol. 7 No. 1, 2024
pp. 47-71
Eme ald Publishing Limi ed
2516-1652
DOI 10.1108/CPE-06-2024-040
The i s is undamen ally heo e ical, demons a ing he logical cohe ence o he
ans o ma ion om alue o p oduc ion p ice h ough igo ous heo e ical easoning. The
s anda d solu ion de eloped in acco dance wi h Bo kiewicz’s analy ical adi ion acili a es a
shi owa d s anda dized ma hema ical exp essions in he s udy o alue ans o ma ion. Since
he 1970s, signi ican heo e ical ad ancemen s ha e been achie ed in Ma xis economics.
The “New In e p e a ion” p oposed by Foley and Dum�
enil add esses he issue o equal
agg ega e alues be o e and a e he ans o ma ion p ocess. Chinese schola s Rong Zhaozi
and Chen Yang app oached he ans o ma ion p oblem by upholding he in a ian condi ion
ha he agg ega e alue o commodi ies equals he agg ega e p oduc ion p ice and he o e all
a e o su plus- alue emains unchanged, e ealing he logical mechanism inhe en in
consis en dis ibu ion ela ion be o e and a e he ans o ma ion (Chen and Rong, 2018;
Rong and Chen, 2014,2022). These s udies e eal he in insic heo e ical logic unde lying he
ans o ma ion o alue in o p oduc ion p ice om a ious heo e ical pe spec i es, enhancing
he alidi y o he labo heo y o alue h ough heo e ical consis ency.
The second esea ch app oach is empi ical o e idence-based. I aims o empi ically
demons a e ha p oduc ion p ices ac as he cen e o g a i y o ma ke p ice luc ua ions,
while alues o m he basis o he o ma ion o p oduc ion p ices. This app oach is in ended o
a gue o he p ac ical explana o y powe o he labo heo y o alue. Such s udies employ
inpu -ou pu da a o measu e he co ela ions and de ia ions be ween ma ke p ices,
p oduc ion p ices and alues ac oss a ious coun ies and egions o p o e ha luc ua ions
in bo h ma ke p ice and p oduc ion p ice a e undamen ally in luenced o de e mined by
alue. This empi ical alida ion aligns he labo heo y o alue wi h angible e idence om
eali y, ad ancing empi ical s udies wi hin Ma xis poli ical economy. Howe e , he exis ing
empi ical me hods o s udying he labo heo y o alue exhibi echnical and heo e ical
limi a ions. Fi s , he limi a ions in he measu emen indexes and he con o e sy o e he
solu ion o he p oduc ion p ice ec o lead o disc epancies in he calcula ion esul s be ween
di e en models and economic da a om a ious economies, making i challenging o
es ablish a uni ied measu emen s anda d. Mo e c i ically, p oduc ion p ice is an abs ac
ca ego y o med unde he condi ion o comple e ma ke compe i ion equilib ium. Economic
ac i i ies in he eal wo ld a e cha ac e ized by complexi y and ola ili y; hus, heo e ically,
de i ed p oduc ion p ices based on he p emise o comple e compe i ion equilib ium do no
di ec ly co espond o ma ke p ices. This heo e ical limi a ion esul s in con adic ions
be ween heo y and eali y in empi ical s udies [1].
Based on p e ious esea ch, his pape shi s om a guing he co ela ion o de ia ion
be ween ma ke p ices, p oduc ion p ices and alues o a guing ha he ange o ma ke p ices
can be explained by he labo heo y o alue. This s udy has wo goals: To e eal he p ac ical
explana o y powe o he labo heo y o alue in a mo e gene al sense while seeking o
de elop he labo heo y o alue in o an empi ical esea ch amewo k o examining eal
economic issues. To his end, we p o e h ough a disequilib ium alue-p ice model ha he
ange o ela i e p ices is de e mined by ela i e alues, he a e o su plus- alue and he
echnical s uc u e o p oduc ion inpu s, while he ela i e p ices luc ua e wi hin he ange
de e mined by he labo heo y o alue unde he in luence o ma ke compe i ion. T adi ional
me hods o es ing he labo heo y o alue ocus on measu ing he ela ionships be ween
ma ke p ices, p oduc ion p ices and alues, which can be seen as a o m o “poin es ima ion”.
In con as , ou app oach ocuses on demons a ing ha he ange o p ices is de e mined by
ca ego ies ele an o he labo heo y o alue, which can be iewed as a o m o “in e al
es ima ion”. The ad an age o his “in e al es ima ion” app oach is ha i a oids he
disc epancies in poin es ima ion esul s caused by ac o s such as p ice ola ili y, he selec ion
o indexes and he solu ion o p oduc ion p ices, which may weaken he in e p e i e powe o
empi ical indings. Consequen ly, i enables a mo e gene al alida ion o he empi ical
explana o y powe o he labo heo y o alue, which o e s a new pe spec i e o he
empi ical s udies on he labo heo y o alue.
CPE
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48
The scien i ic alidi y o a heo y is demons a ed no only by i s in e nal logical
consis ency bu also by i s p ac ical applicabili y. Howe e , adi ional heo e ical and
empi ical s udies on he labo heo y o alue ocus mo e on demons a ing he consis ency o
he heo y and empi ical logic o discussing labo “exploi a ion” wi h less a en ion o he
heo y’s implica ions o economic p ac ices. This pape in oduces an analy ical amewo k
ha can examine he low o alue ac oss a ious sec o s unde eal ma ke compe i ion, i.e.
he edis ibu ion o alue ac oss a ious sec o s o socie y. Based on his, he labo heo y o
alue can be de eloped in o an empi ical esea ch amewo k o examining how ac o s such
as ma ke compe i ion and echnical condi ions a ec he indus ial s uc u e and dis ibu ion
ela ions, s i ing o go beyond he adi ional labo heo y o alue limi ed o no ma i e
discussions o issues like exploi a ion. Based on his, by inco po a ing speci ic economic
ac o s such as ma ke compe i ion o ces and he ans o ma ion o ma ke sys ems, he labo
heo y o alue can be u he de eloped in o a p oblem-o ien ed heo e ical and empi ical
esea ch amewo k.
The emainde o his pape is o ganized as ollows: Sec ion 2 c i ically e iews and
e alua es he common me hods employed in exis ing empi ical s udies on he labo heo y o
alue; Sec ion 3 p esen s he alue-p ice disequilib ium model p oposed he ein; Sec ion 4
conduc s an empi ical analysis u ilizing da a on he Chinese economy, while he concluding
sec ion syn hesizes he indings and implica ions.
2. Li e a u e e iew: common me hods and e alua ions o empi ical s udies on he
labo heo y o alue
This sec ion sys ema ically summa izes he me hods o he empi ical s udies on he labo
heo y o alue and analyzes he di e gences and con o e sies among exis ing app oaches.
The easons o he di icul y in esol ing hese dispu es and disag eemen s lie in he
di e ences be ween a ious heo e ical models unde equilib ium condi ions and he ac ha
exis ing esea ch p edominan ly applies equilib ium models wi hou conside ing he
disequilib ium and ola ili y in empi ical da a. The e o e, by compa ing and e iewing
exis ing esea ch, his pape aims o mo e comp ehensi ely demons a e he heo e ical
signi icance and p ac ical alue o he me hod employed he ein.
2.1 The ans o ma ion o alue in o p oduc ion p ice: a gene al model
A undamen al issue in he deba e o e he labo heo y o alue is how o ans o m he
abs ac alue o a commodi y in o a measu able en i y. Mo ishima (1973) p oposed a me hod
o measu e alue, e olu ionizing alue heo y by b idging he gap be ween pu e heo e ical
discussion and empi ical esea ch. Based on he inpu –ou pu ela ionship o commodi y
p oduc ion, alue can be ma hema ically exp essed as ollows:
i¼ai1 1þ���ain nþτi(1)
whe e iis he alue pe uni p oduc p oduced by sec o i, including he ans e ed alue o
in e media e inpu s (embodied labo ) and he newly added alue (li ing labo ), aij ep esen s
he amoun o in e media e inpu om sec o jconsumed by sec o i o p oduce one uni
p oduc and τiis he di ec labo inpu equi ed o p oduce one uni p oduc by sec o i.
Assuming he e a e np oduc ion sec o s, le ep esen he alue ec o , A he ma ix o
di ec consump ion coe icien s and τ he labo inpu ec o . Equa ion (1) can be exp essed in
he ollowing ma ix o m:
¼A þτ(2)
The alue- ow ec o can be sol ed in he physical inpu –ou pu able as ollows:
China Poli ical
Economy
49
¼ ðI�AÞ−1τ(3)
Equa ion (3) can only be applied o physical inpu –ou pu ables. Howe e , mos coun ies and
egions compiled alue-based inpu –ou pu ables. Thus, i is necessa y o ans o m
Equa ion (3) in o a o m ha can be applied o alue-based inpu –ou pu ables:
¼�I�A
�−1
τ(4)
whe e
i¼ i
pi,a*
ij ¼aij
pj
pi,τ*
i¼τi
piand piis he ma ke p ice o one uni p oduc p oduced by
sec o i. A his poin , as long as we ge he column ec o o di ec labo inpu and he di ec
consump ion coe icien ma ix, we can calcula e he labo alues o commodi ies wi h uni
mone a y alue in he alue-based inpu –ou pu able.
The es ima ion o p oduc ion p ice alls wi hin he ealm o he ans o ma ion p oblem in
Ma xis poli ical economy. Acco ding o Ma x’s de ini ion [2], he p oduc ion p ice column
ec o can be de ined as ollows:
p¼ ð1þ ÞðAp þwτÞ(5)
In Equa ion (5),wdeno es he nominal wage, and he a e age p o i a e. The sys em o
equa ions comp ises nþ2unknowns, ye only nlinea equa ions. The solu ion o pand
equi es wo addi ional cons ain s, deno ing he ans o ma ion p oblem o Ma xis poli ical
economy, which has been s udied by Rong and Chen (2014, 2018, 2022) sys ema ically.
Acco ding o he a ious supplemen a y cons ain s, he solu ion o he ans o ma ion
p oblem is di ided in o Sys ems A, B and C as ollows:
Sys em A 8
>
>
<
>
>
:
p¼ ð1þ ÞðAp þwτÞ
w¼bTp
pTx¼ Tx
(6)
Sys em B 8
>
>
<
>
>
:
p¼ ð1þ ÞðAp þwτÞ
ðAp þwτÞTx¼eωτTx
pTx¼ Tx
(7)
Sys em C
p¼ ð1þ ÞðAp þwτÞ
pTy
Ty¼w
ω
pTx¼ Tx
8
>
>
>
>
<
>
>
>
>
:
(8)
whe e eis he a e o su plus- alue which is he a e measu ed by alue, x hee column ec o o
o al ou pu and y he ne ou pu -wage a e. The equa ion in he hi d ow o he h ee sys ems is
he same; namely, he o al p ice equals he o al alue. The di e ence lies in he second
condi ion: Sys em A assumes ha wo ke s ecei e gi en wages in kind, Sys em B assumes ha
o al p o i s a e equal o o al alue and Sys em C assumes ha he agg ega e a e o su plus-
alue emains unchanged [3]. Using a me hod simila o Equa ion (4), we can ind p*, he
column ec o o he p oduc ion p ice o a commodi y wi h uni mone a y alue in he alue-
based inpu –ou pu able.
CPE
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50
2.2 Empi ical es and applica ion o he ela ionships be ween ma ke p ice, alue and
p oduc ion p ice: mains eam me hods and e alua ions
Since he 1980s, esea che s such as Shaikh (1984) and Ochoa (1989) ha e ini ia ed empi ical
in es iga ions in o he labo heo y o alue by calcula ing p oduc ion p ices and alues
de i ed om inpu –ou pu ables. By compu ing hese p oduc ion p ices and alues, one can
de i e he labo alue ec o
*
and he p oduc ion p ice ec o p
*
o a uni cu ency alue o he
commodi y, as well as he ma ke p ice ec o 1 o he commodi ies (in a alue-based inpu -
ou pu able, his ma ke p ice ec o is cha ac e ized as a column ec o wi h all elemen s
equal o 1). The dimension o labo alue is measu ed in e ms o labo ime, while he
p oduc ion p ice ec o [4] and ma ke p ice a e quan i ied in mone a y uni s. The e o e, di ec
compa isons among hese h ee ec o s a e no easible. The e o e, i becomes essen ial o
con e he labo alue ec o
*
o he commodi y in o i s mone a y equi alen , Λ, as ollows:
Λ¼ �1Tx
Tx�(9)
A his poin , we can de i e dimensionally consis en ec o s o commodi y alue, p oduc ion
p ice and ma ke p ice. We can assess whe he empi ical da a suppo s he labo heo y o alue
by measu ing he ela ionships be ween hese h ee ec o s. The me hods o e alua ing hese
ela ionships can be ca ego ized in o wo ypes: compa ing co ela ion coe icien s o
conduc ing eg ession analyses be ween each pai o ec o s and quan i ying he deg ee o
de ia ion be ween each pai . I he calcula ed ec o s demons a e high co ela ion
coe icien s, eg ession coe icien s app oaching uni y o minimal de ia ions, he
explana o y powe o he labo heo y o alue will be p o ed by empi ical e idence.
U ilizing inpu –ou pu able da a om I aly and he USA, Shaikh (1984) quan i ied p ices
and alues, unco e ing a co ela ion exceeding 90% be ween he wo. This inding
unde sco es he pi o al ole o labo alue in shaping ma ke p ices. Building upon Shaikh’s
(1984) me hodological amewo k, subsequen s udies ha e u he ad anced empi ical
in es iga ions in o he labo heo y o alue by b oadening da a samples and e ining
measu emen indexes. Empi ical in es iga ions by Pe o i�
c(1987),Ochoa (1989) and
Cocksho e al. (1995), u ilizing inpu –ou pu able da a om he USA, o me Yugosla ia and
he Uni ed Kingdom, consis en ly demons a e ha de ia ions be ween ma ke p ices,
p oduc ion p ices and alues gene ally emain wi hin 15%, which subs an ia es he pi o al ole
o alue in in luencing bo h p oduc ion p ice and ma ke p ice. Resea ch by Chinese schola s
(Li, 2017;Ma, 2018;Ren and Wang, 2023) sys ema ically expounded he cha ac e is ics o
ele an indexes o measu ing he ela ionships be ween ma ke p ice, alue and p oduc ion
p ice. Based on he da a om China’s inpu –ou pu able, hey measu ed he co ela ion and
de ia ion be ween ma ke p ices, alues and p oduc ion p ices unde di e en measu emen
indexes and ob ained simila empi ical esul s, p o iding mo e obus da a o suppo he
conclusions o exis ing empi ical esea ch. Cheng and Li (2020) u ilized da a om China’s
inpu –ou pu ables o examine he ela ionships be ween ma ke p ice, alue, Ma xian
p oduc ion p ice and S a ian p oduc ion p ice, whose esea ch esul s indica ed ha he
de ia ions be ween all hese indexes a e ela i ely mino and ha he de ia ions o bo h
Ma xian and S a ian p oduc ion p ices om ma ke p ice a e less han ha o alue om
ma ke p ice, sugges ing ha p oduc ion p ice ins ead o alue is he cen e o g a i y o
ma ke luc ua ions. Is
¸ıka a and Mok e (2022) b oadened he scope o hei in es iga ion o
encompass inpu -ou pu da a om 42 coun ies o e 15 yea s. Thei indings con i med ha
he de ia ion o alue om p oduc ion p ice is smalle han ha o alue om ma ke p ice.
The empi ical esul s ob ained ac oss a ious na ions and egions subs an ia e he eal-wo ld
explana o y powe o he labo heo y o alue, illus a ing i s capaci y o in eg a e heo e ical
amewo ks and p ac ical applica ions e ec i ely.
China Poli ical
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51
The abo e me hods o es ing he labo heo y o alue demons a e he heo e ical and
empi ical logical cohe ence o he heo y, he eby a i ming he scien i ic alidi y o he heo y
and mo e impo an ly, enable he measu emen o such essen ial a iables o poli ical economy
as labo alue and p oduc ion p ice, ad ancing he empi ical s udy in he ield o poli ical
economy. Some schola s ha e unde aken empi ical in es iga ions in o China’s economic
g ow h, s uc u al dynamics, income dis ibu ion and echnical ad ancemen s based on Ma x’s
wo-sec o g ow h model o i s expanded h ee-sec o a ian (Wang and Liu, 2018;Li e al.,
2019;Xu and Liu, 2022). O he esea che s ha e applied economic ci cula ion heo y o
examine egional dispa i ies and pa e ns o economic ci cula ion (Feng e al., 2020;Li e al.,
2021;Qiao e al., 2023). Fu he mo e, some in es iga o s ha e adap ed ep oduc ion models
o encompass he global ep oduc ion sys em o empi ically analyze he o ma ion o
in e na ional alue and in e na ional p oduc ion p ice (Feng, 2016;Liu and Song, 2017). This
ype o li e a u e ei he di ec ly employs he inpu –ou pu me hod in empi ical esea ch o
calcula e such a iables as labo alue and p oduc ion p ice o explo ing ac ual economic
issues o uses ma ke p ice as a p oxy a iable o labo alue o p oduc ion p ice in empi ical
analyses, which implici ly assumes ha , in he long un, he de ia ions be ween alues,
p oduc ion p ices and ma ke p ices a e small – a hypo hesis suppo ed by nume ous empi ical
s udies examining he labo heo y o alue.
Howe e , as esea ch in his ield ad anced, he e ha e been c i icisms on he empi ical
app oach o employing inpu –ou pu analysis o e alua e he labo heo y o alue om bo h
echnical and heo e ical pe spec i es. Thus, he alidi y o ela ed empi ical s udies in
poli ical economy ha eme ged om his me hodological amewo k necessi a es u he
explana ion.
Fi s ly, on he echnical le el, he e a e ce ain me hodological limi a ions in measu ing he
co ela ions, eg ession coe icien s and de ia ions be ween alues, p oduc ion p ices and
ma ke p ices. As o he co ela ion and eg ession coe icien s, since he ma ke p ices in he
alue-based inpu -ou pu able consis o a ec o o all ones, he co ela ion coe icien canno
be ma hema ically de ined. Addi ionally, he coe icien s ob ained om eg essing ma ke
p ices ep esen he expec a ions o commodi y alues and p ices only. To add ess his
limi a ion, he academic communi y has begun o shi owa d measu ing he co ela ion o
eg ession coe icien s be ween he agg ega e ma ke p ices, agg ega e alues and agg ega e
p oduc ion p ices o a ious sec o s. Howe e , i is c ucial o no e ha such co ela ions
p ima ily a ise om he co ela ions be ween agg ega e ou pu s a he han ma ke p ices,
alue and p oduc ion cos s. Thus, hese indings a e deemed un eliable (Kliman, 2002).
Consequen ly, esea che s ha e ega ded de ia ions be ween ec o s o ma ke p ice, alue
and p oduc ion p ice as indexes o es he p ac ical explana o y powe o he labo heo y o
alue (Shaikh, 2016). The de ia ion indexes can be classi ied in o wo p ima y ca ego ies. The
i s ca ego y encompasses de ia ion indexes wi h uni s o measu emen , such as mean
absolu e de ia ion (MAD), mean absolu e weigh ed de ia ion (MAWD) and no malized
ec o dis ance (NVD). The alues o hese indexes a e linked o he uni s o measu emen
associa ed wi h he calcula ed ec o s, ende ing compa isons be ween de ia ion indica o s
o e di e en yea s imp ac ical. This limi a ion poses a signi ican challenge o e alua ing he
p ac ical explana o y powe o he labo heo y o alue. The second ca ego y consis s o
de ia ion indica o s wi hou uni s o measu emen , which p ima ily assess de ia ions based on
he angles be ween ec o s, e ec i ely o e coming he limi a ions inhe en in he i s
ca ego y and allowing o compa a i e analyses o de ia ions ac oss di e en yea s. They a e
ega ded as ela i ely obus and eliable among cu en indexes employed o es he labo
heo y o alue. Howe e , he e a e also limi a ions associa ed wi h he angle-based de ia ion
indexes. When he de ia ions o ma ke p ices om hei co esponding alues o p oduc ion
p ices a y ac oss di e en sec o s, he angles be ween ec o s may emain unchanged. In
o he wo ds, his index may no adequa ely e lec he s uc u al di e ences in de ia ions. In
addi ion, since all h ee ec o s a e de i ed om he same alue-based inpu -ou pu able, he
high co ela ions, eg ession coe icien s app oaching 1 and small de ia ions obse ed
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be ween ma ke p ices, alues and p oduc ion p ices may esul om in insic co ela ions
gene a ed by linea calcula ion me hods a he han om heo e ical cause-and-e ec
ela ionships.
Secondly, om he heo e ical pe spec i e, he exis ing me hodologies o es ing he labo
heo y o alue necessi a e u he e inemen . A key s ep in exis ing empi ical s udies es ing
he labo heo y o alue is he es ima ion o p oduc ion p ices. Howe e , he es ima ion o
p oduc ion p ices in ol es mul iple me hods, each co esponding o di e en assump ions,
esul ing in a ying p oduc ion p ices. Consequen ly, he e a e mul iple possible ou comes
when measu ing he ela ionship be ween ma ke p ices, p oduc ion p ices and alues, and no
uni e sally accep ed s anda d exis s. Resea che s mus choose in e p e a i e amewo ks in
p ac ical esea ch based on hei speci ic needs. The e o e, he alidi y o es ing he labo
heo y o alue emains open o u he discussion. Mo e impo an ly, in Ma x’s heo e ical
amewo k, he o ma ion o p oduc ion p ices esul s om he equaliza ion o p o i a es.
This equaliza ion is a heo e ical law disco e ed by Ma x as he mo ed om conc e e analyses
o highe le els o abs ac ion, logically e ealing changes in how he law o alue ope a es.
Howe e , abs ac ion and conc e eness do no ha e a one- o-one co espondence. Applying
abs ac ca ego ies di ec ly o conc e e issues con a enes he equi emen s o he scien i ic
me hod o abs ac ion. In empi ical esea ch, p oduc ion p ices calcula ed based on he
a e age p o i a e can only be conside ed a special case in he alue ealiza ion p ocess
(Zambelli, 2018). Ma x (2004, p. 181) also poin s ou ha as o he p oduc ion p ice, “in he
whole capi alis p oduc ion, he gene al law, as a dominan end, always wo ks only in an
ex emely complica ed and app oxima e way, as a cons an ly luc ua ing bu ne e ce ain
mean alue.” The equaliza ion o p o i a es is achie ed h ough a cons an ly complex and
luc ua ing p ocess. Since a ious ac o s obs uc he p ocess o equalizing p o i a es, he
equaliza ion o p o i a es can only be pe cei ed as a long- e m end. The e o e, in heo y,
al hough p oduc ion p ices adjus he capi alis ela ionships as a ans o med ca ego y o
alue, he ola ili y and complexi y o economic dynamics make i di icul o accu a ely
measu e he speci ic alues o p oduc ion p ices empi ically. This heo e ical limi a ion has
also been e lec ed in some empi ical s udies, whe e he de ia ion o ma ke p ice om
p oduc ion p ice is g ea e han he de ia ion o ma ke p ice om alue (Ochoa, 1989;
Tsoul idis and Mania is, 2002). Howe e , acco ding o Ma x, he ans o ma ion o alue in o
p oduc ion p ice is a ans o ma ion p ocess om abs ac ion o conc e eness, and he p ice o
p oduc ion, ins ead o alue, becomes he cen e o g a i y o ma ke p ice luc ua ions, so he
de ia ion o ma ke p ice om p oduc ion p ice should be smalle han he de ia ion o ma ke
p ice om alue logically. In he empi ical esea ch li e a u e on Ma xian economics, some
pa s deal wi h he calcula ion o p oduc ion p ices. The abo e issues can impac he alidi y o
he empi ical esea ch indings based on such calcula ions o a ce ain ex en . Mo eo e , he
p oduc ion p ices as a esul o he equaliza ion o p o i a es ep esen a gene al ule in
capi alis economies and o en se e as a e e ence s anda d. The e o e, whe he om he
pe spec i e o es ing he labo heo y o alue o om he s andpoin o e ining empi ical
esea ch in poli ical economy, we need o imp o e he me hods o es ima ing p oduc ion
p ices o de elop new a iables o subs i u e he e e ence s anda d unc ion o
p oduc ion p ice.
I is wo h men ioning ha Fa joun and Macho e (1983) and Sche old (2013,2019)
in oduced p obabili y heo y and quan i a i e s a is ics in o he empi ical s udy o poli ical
economy. They iew he capi alis economy as a complex and u bulen p ocess whe e p o i
a es, p ices, p oduc ion echnologies, e c. ollow a ce ain andom p obabili y dis ibu ion.
Based on his amewo k, hey s udied issues ela ed o he labo heo y o alue. This aligns
wi h he “disequilib ium” pe spec i e emphasized in his pape . The app oach o sol ing o
ma ke p ices and p oduc ion p ices unde unce ain condi ions can be conside ed heo e ically
sound. Howe e , hei assump ion abou speci ic p obabili y dis ibu ions o p o i a es and
p ices lacks a co esponding heo e ical basis. The closeness o hei model o eal-wo ld da a
on p o i a es and p ices migh be a esul o da a i ing. Fu he mo e, hei conclusions ha e
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no been s ongly suppo ed by empi ical es s o da a om some economies (Basu, 2017;
Mohun and Veneziani, 2017). The e o e, his pape abandons he heo e ical assump ion o
speci ic p obabili y dis ibu ions bu d aws upon he esea ch app oach o in e p e ing he
labo heo y o alue unde condi ions o unce ain y.
He ein, we pu o wa d a new app oach o es he labo heo y o alue, shi ing om
a guing he co ela ions o de ia ions be ween ma ke p ice, p oduc ion p ice and alue o
demons a ing ha he ange o ma ke p ices can be explained by he labo heo y o alue,
he eby e ealing he p ac ical explana o y powe o he labo heo y o alue in a mo e gene al
sense. To his end, we cons uc a disequilib ium-p ice model o p o e ha he ange o he
ela i e ma ke p ice ha a commodi y can inally achie e can be explained by he labo heo y
o alue in he hi d sec ion. The model esul s show ha he ange o he ma ke p ices o
commodi ies is de e mined by h ee ac o s: he ela i e alue o he commodi y, he a e o
su plus- alue and he echnical condi ions o p oduc ion.
3. The disequilib ium alue–p ice model
In his sec ion, we cons uc a alue-p ice disequilib ium model based on ex ending he
heo e ical model o Naka ani and Okishio (1995). We a gue he ela ionship be ween ela i e
p ices and ela i e alues om he pe spec i e o disequilib ium p ices.
In an n-sec o model, he cons ain s o capi alis s in each sec o o ob ain posi i e p o i s
[5] a e as ollows:
pi>X
n
j¼1
aijpjþτiw(10)
w¼X
n
j¼1
bjpj(11)
whe e piis he ma ke p ice o one uni p oduc p oduced by sec o i,aij is he in e media e
inpu o sec o j consumed by sec o i o p oduce one uni p oduc , τiis he di ec labo inpu o
sec o i o p oduce one uni p oduc and b¼ ðb1;���;bnÞT he ec o o in-kind wage. The
labo alue iand he a e o su plus- alue epe uni commodi y can be exp essed as ollows:
i¼X
n
j¼1
aij jþτi(12)
e¼
1�P
n
j¼1
bj j
P
n
j¼1
bj j
(13)
Le xi¼pi
pn;y¼w
pn;ui¼πi
pn, and Equa ions (10) and (11) can be exp essed as ollows:
xi�X
n
j¼1
aijxj�τiy¼ui(14)
�X
n
j¼1
bjxjþy¼0(15)
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complemen s he mains eam app oach o es ing he labo heo y o alue, which is o explain
he ole o alue in de e mining ma ke p ices om he pe spec i e o he ange o ma ke
p ices, in addi ion o he co ela ion and de ia ion indexes.
I should be no ed ha he empi ical esul s p esen ed in Figu e 1 show ela i e p ices in
speci ic sec o s exceeding he heo e ical ceiling o he ollowing easons: Fi s ly, he model
o calcula ing he heo e ical uppe limi s on ela i e p ices is based on he cos o p oduc ion
o med by he p ices o each sec o de e mined by he cu en pe iod’s echnical coe icien s.
Howe e , he ma ke p ices o he sec o s coun ed in he inpu –ou pu ables a e a ec ed by
his o ical cos s. Ma ke p ices a e cons an ly luc ua ing, and a model based on he cu en -
pe iod echnology ma ix would lea e ou he e ec o his o ical cos s. Secondly, he
heo e ical model is a “closed economy”, and i he e a e di e ences be ween he p ices o
impo ed inpu s and domes ic p ices, his will also ha e an impac on he esul s. Finally,
inpu –ou pu ables, as a esul o s a is ical wo k, a e subjec o a ce ain amoun o s a is ical
e o . This is pa icula ly common in he was e ma e ials ecycling and p ocessing sec o
whe e p oduc ion s a is ics a e no s anda dized, as he inpu -ou pu coe icien s a e no
s anda dized and a e likely o cause he labo inpu s in ol ed and, hus, he agg ega e su plus
alue o be unde es ima ed. This leads o an unde es ima ion o he uppe limi o he
p oduc ion p ice, so ha he ma ke p ice, which con ains he ue amoun o su plus alue, is
highe han he heo e ical uppe limi . The “excep ions” o ma ke p ices in speci ic sec o s
a e una oidable e o s in he p ojec ion o heo y in o eali y and do no a ec he alidi y o
he conclusion o his pape .
(2) Empi ical inding 2: The ange o ela i e ma ke p ices and he end
The esul s in Figu e 1 also show he magni ude and end o he ange o ma ke p ices in
di e en yea s, which u he explains he empi ical alidi y o he labo heo y o alue. As
can be seen om Figu e 1, he limi s o ela i e p ice a ailable in a ious sec o s a e
app oxima ely a he same le el in he yea s selec ed o his s udy. This is he esul o he
gene alized linkage o p oduc ion p ocesses ac oss sec o s unde mode n echnical condi ions.
In he n-sec o inpu –ou pu model, p oduc ion in one sec o o en in ol es in e media e inpu s
om almos all o he sec o s, i.e. p oduc ion is uni e sally linked and he economic p oduc ion
p ocess is a “ci cula low”. The e o e, he ange o possible alues o ela i e p ices in any
sec o is de e mined o a la ge ex en by all o he sec o s a he han by he sec o i sel . The ac
ha he ange o ela i e p ices in he di e en sec o s is gene ally s able in he same ange
sugges s ha his ange is go e ned by a uni e sally ope a ing economic law wi hin he whole
economic sys em. This uni e sally ope a ing law is he ele an abs ac ca ego y o he labo
heo y o alue se up in he model o his pape . This ela ionship is also e lec ed in Shaikh’s
(1984) s udy, which demons a es ha he de ia ions o he ela i e p oduc ion p ices o
di e en commodi ies om hei ela i e alues a e oo minimal o conside . Since his
de ia ion depends on he “ e ically in eg a ed” capi al- o-labo a io, he “ e ically
in eg a ed” capi al- o-labo a ios a e app oxima ely equal, while he di ec in es men
capi al- o-ou pu a ios di e ma kedly be ween sec o s. This is due o he ac ha he esul o
e ical in eg a ion app oxima es a weigh ed a e age o he capi al-ou pu a ios o all sec o s.
Simila ly, he con e gence o ela i e p ice anges ac oss sec o s is empi ical e idence o he
ole o he labo heo y o alue.
In addi ion, he empi ical esul s also e eal he end o changes in he ela i e p ice ange.
The uppe limi o he sec o al ela i e p ices o he sec o was a ound 2.5 in 2007 ac oss
sec o s and has been basically main ained a a ound 2 since 2012; simila ly, he lowe limi o
he sec o al ela i e p ices has isen om a ound 0.2 in 2007 o app oxima ely 0.5 ac oss
sec o s. This shows ha since en e ing he new e a, China’s ma ke -o ien ed e o m has
e ec i ely p omo ed he imp o emen o he socialis ma ke economic sys em, and he law o
alue has played a ole in esou ce alloca ion in a wide scope and a a deepe le el, e ec i ely
egula ing social p oduc ion. As a esul , he ange o ela i e ma ke p ices ha can be ealized
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in di e en sec o s becomes smalle , he po en ial space o excess p o i s is u he educed
and he law o compe i ion plays a be e ole in he alloca ion o esou ces in he ope a ion o
he economy.
Finally, we also complemen he alidi y o he empi ical esul s by p esen ing he esul s
when non-p oduc i e sec o s a e included. Figu e 2 shows he esul s when non-p oduc i e
sec o s a e included, and he esul s show ha al hough he ela i e p ices be ween sec o s
we e s ill wi hin he luc ua ion ange speci ied in he model in gene al, and he labo heo y o
alue is s ill alid in his sense, he ola ili y o he ma ke p ices is much highe and he e a e
mo e ou lie s ou o he ola ili y ange han he esul s in Figu e 1. This sugges s ha he
ea men o he non-p oduc i e sec o in his pape is app op ia e and suppo s he alidi y o
he empi ical esul s.
(3) Empi ical inding 3: Rela i e p ice di e ences e lec in lows and ou lows o alue
be ween indus ies
The empi ical esul s o his pape can no only e i y he alidi y o he labo heo y o alue
bu also p o ide a pe spec i e o analyzing he in e -indus y ela ionship om he labo
heo y o alue, he eby p o iding sugges ions on policymaking o p omo ing he balanced
de elopmen o in e -indus y and op imizing he layou o he indus ial chain. Table 1 shows
he i e sec o s wi h he highes and i e sec o s wi h he lowes ela i e ma ke p ices ac oss
all sec o s om 2007 o 2020. A highe ela i e ma ke p ice means ha he su plus alue
ob ained by he sec o exceeds he a e age ma ke le el, which is conduci e o he
accumula ion and de elopmen o he sec o and ice e sa.
Fi s o all, Table 1 shows ha in China’s economic de elopmen , he sec o s wi h high
ela i e ma ke p ices pe uni o labo ime a e mainly concen a ed in na u al monopoly
indus ies such as oil, na u al gas, elec ici y and mining, which, o an ex en , e lec s ha hese
monopoly indus ies ha e become he main alue-in low sec o s by i ue o hei monopoly
posi ion in he ma ke and ob ained a ela i ely la ge sha e o he excess p o i s in he o al
social p oduc s. These na u al monopoly indus ies a e mainly composed o la ge s a e-owned
en e p ises (SOEs), which means ha , on he one hand, i is necessa y o con inue o p omo e
he ma ke -o ien ed e o m o SOEs o build a ai and compe i i e socialis ma ke s uc u e;
on he o he hand, he go e nmen can collec pa o he su plus alue by way o he p o i s
paid by SOEs and use i o se e he enhancemen o social wel a e, o example, o inc ease
he in es men in some basic and leading echnological ields, so ha hei esea ch esul s can
d i e he high-quali y de elopmen o ela ed indus ies.
Secondly, sec o s wi h low ela i e ma ke p ices mainly include adi ional indus ies and
public goods sec o s, including ag icul u e, o es y, animal husband y, ishe y, ex iles and
se ices. Such sec o s ha e seen an ou low o su plus alue unde ma ke economic
condi ions, which is no conduci e o he accumula ion and de elopmen o he sec o , and,
he e o e, equi e easonable guidance and p ecise assis ance based on he needs o
employmen and people’s li elihood. O cou se, he mos undamen al de elopmen pa h is he
ans o ma ion and upg ading o adi ional indus ies h ough new echnologies o imp o e
p oduc ion e iciency and achie e high-quali y de elopmen .
Thi dly, some sec o s ha a e in line wi h he law o indus ial- echnological upg ading and
he de elopmen plan o he na ional economy, such as special pu pose equipmen ,
ins umen a ion, in o ma ion ansmission, compu e se ices, so wa e and in o ma ion
echnology se ices, ha e also become sec o s wi h ela i ely high ela i e ma ke p ices in
hal o he yea s in he examina ion pe iod. This indica es, on he one hand, ha he socialis
ma ke economy sys em wi h Chinese cha ac e is ics can s ongly p omo e echnological
inno a ion and indus ial upg ading and ealize he p og ess o p oduc i e o ces; on he o he
hand, he de elopmen o eme ging indus ies is no s able and a ec ed by he epidemic, hey
did no appea in he op i e sec o s wi h high ela i e ma ke p ices in he da a o 2021. I can
be seen ha he sus ained and apid de elopmen o high- ech indus ies canno be sepa a ed
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om he ele an policy suppo . Meanwhile, we should also be ale o he isks b ough by
new echnologies and new o ms o business, egula e and guide he sound de elopmen o
capi al, and p e en he diso de ly expansion o capi al o enable p i a e en e p ises o be e
Figu e 2. Sec o al ela i e p ices and hei anges om 2007 o 2020 (including non-p oduc i e sec o s)
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se e he cons uc ion o socialism wi hou o e -accumula ion and dis o ion o sec o ial
s uc u e.
O e all, hecompe i i e ela ionshipbe weensec o sleads o hein lowandou lowo alue
ac oss indus ies. I is essen ial o acknowledge he pi o al ole o ma ke compe i ion in
enabling capi al mobili y and alue dis ibu ion when de ising mac oeconomic policies. Such
policies should s i e o es ablish a uni ied, open and o de ly na ional ma ke and, h ough he
mechanisms o ma ke compe i ion, gi e ull play o he law o alue ac oss a ious sec o s,
he eby p omo ing coo dina ed and sus ainable de elopmen ac oss indus ies. Mo eo e ,
a ge ed indus ial policies mus be implemen ed o speci ic sec o s. Regula ion o na u al
monopoly sec o s should be s eng hened, and ma ke -o ien ed e o ms o s a e-owned
en e p ises should be p omo ed. Besides, i is necessa y o in oduce co esponding indus ial
Table 1. The i e sec o s wi h he highes and lowes ela i e p ices
Yea
The i e sec o s wi h he highes ela i e ma ke
p ices
The i e sec o s wi h he lowes ela i e ma ke
p ices
2007 Was e uel Resea ch and expe imen al de elopmen
In o ma ion ansmission, compu e se ices and
so wa e
Food manu ac u ing and obacco p ocessing
Wholesale and e ail ade Pos al sec o
Oil and gas ex ac ion Heal h, social secu i y and social wel a e
T anspo a ion and wa ehousing Fa ming, o es y, animal husband y, ishe y and
se ices
2012 Was e uel Food and obacco
Oil and gas ex ac ion Heal h and social wo k
Wholesale and e ail ade Accommoda ion and ca e ing
Pe oleum, coking and nuclea uel p ocessing Educa ion
Gas p oduc ion and supply Fa ming, o es y, animal husband y, ishe y and
se ices
2015 Pe oleum, coking and nuclea uel p ocessing Food and obacco
Elec ici y and hea p oduc ion and supply Heal h and social wo k
Oil and gas ex ac ion Accommoda ion and ca e ing
Gas p oduc ion and supply Educa ion
Mining and p ocessing o me al o es Fa ming, o es y, animal husband y, ishe y and
se ices
2017 Recycling and p ocessing o was e esou ces and
was e ma e ials
Heal h and social wo k
Pe oleum, coking and nuclea uel p ocessing Food and obacco
Oil and gas ex ac ion Residen se ices, epai s and o he se ices
Gas p oduc ion and supply Educa ion
Me al smel ing and olling Fa ming, o es y, animal husband y, ishe y and
se ices
2018 Special pu pose equipmen Mining and p ocessing o non-me allic and o he
mine al o es
Accommoda ion and ca e ing Tex iles
Manu ac u e o pape , p in ing and a icles o
cul u e, educa ion and spo ac i i y
Ga men and appa el, oo wea , headgea ,
lea he , down and ela ed p oduc s
Ins umen a ion Elec ical machine y and equipmen
In o ma ion ansmission, so wa e and
in o ma ion echnology se ices
Elec ici y and hea p oduc ion and supply
2020 Oil and gas ex ac ion sec o Food and obacco
Pe oleum, coking and nuclea uel p ocessing Educa ion
Repai o me al p oduc s, machine y and equipmen Tex iles
P oduc ion and supply o wa e Heal h and social wo k
Mining and p ocessing o me al o es Fa ming, o es y, animal husband y, ishe y and
se ices
Sou ce(s): Au ho s’ own wo k
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policies o suppo some weak indus ies. Fo example, policy suppo should be p o ided o
weak indus ies such as chip manu ac u ing, in addi ion o guiding go e nmen capi al o
pa icipa e in hese high- ech indus ies. Addi ionally, o eme ging ields such as he digi al
economy, i is necessa y o speed up policymaking, no only o p o ec he income o speci ic
ac o owne ssuchasowne so da aandp omo e hesoundde elopmen o heindus ybu also
o egula e and guide he de elopmen o capi al, p e en ing he diso de ly expansion o capi al.
The low o alue be ween sec o s, e lec ed by ela i e p ice di e en ials, p o ides a
e e ence o o mula ing indus ial policies, which is a p ac ical applica ion o he analy ical
amewo k discussed in his pape . Fu u e esea ch should u he quan i y he le el o
indus ial compe i ion as indica ed by ela i e p ices, whe ein he ange o ela i e p ices
pa ly se es as a p oxy o p oduc ion p ices as a e e ence s anda d. In he p esence o
p oduc ion p ices, he de ia ion o ma ke p ices om hese p oduc ion p ices e lec s he
ex en o ma ke compe i ion dis o ions. P oduc ion p ices a e he cen e o g a i y o p ice
luc ua ion, unc ioning as a benchma k. The esea ch in his pape indica es ha i is di icul
o di ec ly de e mine he p oduc ion p ice empi ically; hus, hei ole as a e e ence is la gely
heo e ical. In empi ical esea ch, he easible ange o ela i e p ices can pa ially subs i u e
o p oduc ion p ices, se ing as a e e ence. The smalle he de ia ion be ween ela i e p ices
and he uppe limi o ela i e p ice, he s onge he compe i i e posi ion o ha sec o . This
de ia ion alue can ac as a p oxy a iable o compe i ion deg ee. Fu u e empi ical s udies
may inco po a e mo e speci ic economic ac o s such as echnical di e ences, capi al u no e
and he o ganic composi ion o capi al o u he modeling o analyze mo e speci ic
mac oeconomic p oblems.
The e o e, he heo e ical amewo k p esen ed in his pape e ec i ely analyzes he low
o o al social p oduc ion alue ac oss a ious sec o s, which enables an explo a ion o he
compe i i e ela ionships be ween indus ies and in o ms adjus men s o indus ial policies
aimed a p omo ing balanced de elopmen and op imizing he indus ial chain layou . This no
only b oadens he applica ion scope o he labo heo y o alue bu also p o ides new insigh s
o guiding economic p ac ice h ough his heo y. Fu he esea ch can del e deepe in o he
mechanisms and heo e ical logic behind highe o lowe ma ke p ices in di e en sec o s,
inco po a ing mo e speci ic ac o s such as monopoly powe , di e ences in echnical s uc u e
and capi al u no e , he eby o e ing obus heo e ical suppo o os e ing coo dina ed
de elopmen among indus ies.
In summa y, ou empi ical esul s alida e he p ac ical explana o y powe o he labo
heo y o alue ac oss mul iple dimensions, obus ly complemen ing exis ing esea ch.
Fu he mo e, he heo e ical amewo k p esen ed he ein can be u ilized o analyze he low o
alue be ween di e en sec o s, p esen ing signi ican eal-wo ld implica ions. O cou se,
he e a e ce ain limi a ions, as e idenced by he esul s and ample oom emains o u he
explo a ion. Fi s ly, he handling o non-p oduc i e sec o s di ec ly impac s ou empi ical
indings, and he e is s ill ongoing deba e ega ding he de ini ion o hese sec o s. Al hough
non-p oduc i e sec o s do no pa icipa e in alue p oduc ion, hey engage in alue
dis ibu ion, sugges ing ha simply excluding hem migh no be he op imal app oach and
wa an s u he examina ion. The empi ical esul s ob ained wi hou excluding he non-
p oduc i e sec o s show mo e ou lie s in ela i e p ices compa ed o he esul s wi h hese
sec o s excluded, indica ing ha ou exclusion app oach is ela i ely easonable. Secondly, he
ea men o in-kind wages is somewha udimen a y, aising ques ions abou he accu acy o
using he p opo ion o household consump ion in di e en sec o s as he sha e o in-kind
wages, which equi es addi ional discussion. As p e iously no ed, he academic communi y
also deba es he heo e ical assump ion o an exogenously gi en ec o o in-kind wage.
5. Conclusion
Since he abs ac elemen s in ol ed in he labo heo y o alue a e challenging o obse e
di ec ly, adi ional esea ch on he labo heo y o alue p ima ily ocuses on heo e ically
China Poli ical
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65
explaining i s logical consis ency and using i as an analy ical ool o issues such as
exploi a ion. The inpu –ou pu me hod in poli ical economy shi s he esea ch on he labo
heo y o alue owa ds empi ical analyses, e i ying he eal-wo ld explana o y powe o he
labo heo y o alue and b oadening i s esea ch scope o include eal economic p oblems.
This pape summa izes and analyzes he empi ical esea ch me hod o he labo heo y o alue
de eloped by schola s, including Shaikh and Ochoa, and poin s ou ha hei limi a ions lie in
he con en ious solu ions o he p oduc ion p ice ec o . No only is he e no consensus on he
me hod o calcula ing p oduc ion p ices, bu conside ing he complexi y and ola ili y o
economic mo emen s, p oduc ion p ices can ha dly be accu a ely calcula ed. The e o e, his
pape abandons he app oach o sol ing o he p oduc ion p ice and, om he pe spec i e o
disequilib ium p ices, de i es a ange o alues o he ela i e ma ke p ices ha can be
ealized o commodi ies based on mo e gene ous assump ions in an n-sec o model. The
model’s conclusions indica e ha he ange o ela i e p ices is join ly de e mined by ela i e
alues, he a e o su plus- alue and he echnical s uc u e o p oduc ion inpu s. In o he
wo ds, he ange o ela i e p ices is de e mined by elemen s ela ed o he labo heo y o
alue, e lec ing he decisi e ole o alue in de e mining ma ke p ices. This pape
empi ically alida es he heo e ical model’s conclusions using da a om China’s inpu –
ou pu ables, suppo ing he scien i ic alidi y o he labo heo y o alue. The analysis
amewo k based on disequilib ium p ices we p opose he ein e eals, in a mo e gene al
heo e ical sense, he decisi e ole o alue in he ange o ma ke p ice, p o ing he
e ec i eness o he labo heo y o alue. I supplemen s exis ing empi ical esea ch me hods
o es ing he labo heo y o alue, u he alida es p e ious conclusions and expands he
me hods o expe imen al esea ch on he labo heo y o alue.
This pape seeks o anscend he con en ional analy ical amewo k o he labo heo y o
alue, which is p ima ily ocused on a i ming he heo y’s scien i ic alidi y. Based on
exis ing empi ical esea ch pa adigms ela ed o he labo heo y o alue, he pape in oduces
an analy ical amewo k ha examines how ma ke compe i ion, echnical condi ions and
o he ac o s in luence indus ial s uc u e and dis ibu ion ela ions h ough he lens o his
heo y. By examining alue edis ibu ion ac oss di e se sec o s, we e alua e he a ionali y o
p o i dis ibu ion wi hin hese sec o s and p o ide a heo e ical amewo k o ad ancing a
high-le el ma ke economy and os e ing high-quali y indus ial de elopmen om he
pe spec i e o Ma xis poli ical economy.
The analysis amewo k based on disequilib ium p ices is cons uc ed on he ela i ely
lexible heo e ical assump ion ha all sec o s can achie e posi i e p o i s. The aim is o
alida e he p ac ical explana o y powe o he labo heo y o alue in a mo e gene alized
sense. In u u e esea ch, we can apply his me hod o analyze mo e p ac ical economic issues
by in oducing mo e speci ic cons ain s. Fo ins ance, we can conside inco po a ing ac o s
such as he deg ee o ma ke compe i ion, he u no e a e o capi al and he o ganic
composi ion o capi al in o he disequilib ium-p ice model o analyze he s uc u al di e ences
in ma ke p ices and hei anges ac oss sec o s and es ima e he in lows and ou lows o alue
among hese indus ies. By in oducing conc e e economic ac o s, his analy ical amewo k
can e eal he in insic connec ions be ween sec o s om alue p oduc ion and ealiza ion,
he eby p o iding co esponding policy ecommenda ions o op imize he alloca ion o labo
esou ces ac oss indus ies, p omo e he cons uc ion o a mode n indus ial and economic
sys em and acili a e high-quali y economic de elopmen .
No es
1. Fo a de ailed discussion o he echnical and heo e ical limi a ions o exis ing empi ical esea ch
me hods, e e o he li e a u e e iew in sec ion 2 below.
2. In he S a a sys em on ans o ma ion, wages a e paid pos - ac um, meaning ha wages a e no
conside ed as ad ance capi al. The e ha e been s udies examining he labo heo y o alue wi h bo h
p epaid and pos paid wages. Howe e , he conclusions om hese s udies do no di e signi ican ly.
CPE
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66
Fo he sake o b e i y, his pape will only desc ibe he solu ion o p oduc ion p ices based on he
assump ion o p epaid wages.
3. In his pape , we only in oduce h ee solu ions o he ans o ma ion p oblem o sol e o he
p oduc ion p ice. As o o he solu ions o he ans o ma ion p oblem and he ad an ages and
disad an ages o di e en solu ions, hey ha e li le o do wi h he heme o his pape , so we will no
discuss hem he e.
4. S ic ly speaking, he p oduc ion p ice ec o does no necessa ily need o be measu ed in mone a y
uni s, because, in heo y, p oduc ion p ices esul om he edis ibu ion o su plus alue based on
alue. Howe e , p oduc ion p ices calcula ed based on alue-based inpu –ou pu ables and nominal
wages a e indeed measu ed in mone a y uni s.
5. I should be no ed ha he assump ion o posi i e p o i in n-sec o model is heo e ically jus i ied. In
an n-sec o economy, he economic sys em is u bulen and complex. While indi idual en i ies may
expe ience ope a ing losses, each sec o is an agg ega e o nume ous i ms. Thus, i is e iden ly
easonable o assume ha , on a e age, any gi en sec o achie es posi i e p o i s.
6. whe e
Δ¼��������
1−a11 . . . −a1n−τ1
.
.
..
.
..
.
.
−an1. . . 1−ann −τn
−b1. . . −bn1
��������
and Δnn indica es he sub- o mulas a e ow nand column na e emo ed, Δsn he sub- o mulas a e
ow sand column na e emo ed, Δss;nn;nþ1nþ1 he sub- o mulas a e ow s,n,nþ1and column s,n,
nþ1a e emo ed.
7. Mo e he elemen s o Δsn in column s o column n�1and ge :
△sn ¼ ð−1Þn−s−1
����������������
1−a11 ��� −a1s−1−a1sþ1��� −a1s−τ1
.
.
..
.
..
.
..
.
..
.
.
−as−11 ��� 1−as−1s−1−as−1sþ1��� −as−1s−τs−1
−asþ11 ��� −asþ1s−11−asþ1sþ1��� −asþ1s−τsþ1
.
.
..
.
..
.
..
.
..
.
.
−an1��� −ans−1−ansþ1��� −ans −τn
−b1��� −bs−1−bsþ1��� −bs1
����������������
The e o e, de e minan combina ion o nΔss − sΔsn can be ca ied ou .
8. We de ine i as ollows: *
i¼Pn−1
j≠s;naij *
jþτiði¼1;���;nÞ
9. In Equa ion (27),Δand *
ican be in e p e ed as indexes e lec ing he cha ac e is ics o he echnical
s uc u e o p oduc ion inpu s in he n-sec o model, which is no in ui i ely ep esen ed in he
n-sec o disequilib ium model, bu i s meaning can be isualized in a wo-sec o model. In he wo-
sec o model, he ange o ela i e p ices is as ollows:
�1−e
1þe� 1
2<p1
p2<�1þe
k2ð1þeÞ� 1
2
whe e k
2
is he o ganic composi ion o he second sec o , and he speci ic de i a ion p ocess o he
wo-sec o model is shown in Appendix A.1 o his pape . The abo e o mula delinea es ha he ange
o ela i e p ices be ween di e en p oduc ion sec o s unde he cons ain o posi i e p o i
condi ions is de e mined by he labo alue, he a e o su plus- alue and he o ganic composi ion o
capi al. In an n-sec o model, he o ganic composi ion ha e lec s he echnical s uc u e
cha ac e is ics o p oduc ion inpu s is ans o med in o a mo e complex ma hema ical o m as
p esen ed in he main ex .
10. F om Equa ions (24), (25) and (26), we ha e SΔsn ¼ nΔss−ð−1Þnþse
eþ1 *
nΔss;nn;nþ1nþ1, which can be
ans o med in o Equa ion (34) by subs i u ing in o Equa ion (35).
China Poli ical
Economy
67
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(The Appendix ollows o e lea )
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Appendix
A.1 The alue-p ice disequilib ium model in a wo-sec o model
Conside he ela ionship be ween ela i e p ice and ela i e alue o commodi ies in a wo-sec o model.
Assuming ha sec o I is he sec o o he means o p oduc ion, commodi y 1 capi al goods, sec o II he
sec o o he means o consump ion, and commodi y 2 consume goods, Table 1 desc ibes he economic
p oduc ion p ocess in he wo-sec o model.
The condi ions unde which capi alis s in bo h sec o s can ea n posi i e p o i s a e:
p1>a1p1þτ1w(A1)
p2>a2p1þτ2w(A2)
w¼bp2(A3)
whe e w ep esen s he in-kind wages o wo ke s,
1
and
2
he labo alue o uni commodi y 1 and
commodi y 2, espec i ely. The labo alue o commodi y can be exp essed as ollows:
1¼a1 1þτ1(A4)
2¼a2 1þτ2(A5)
The a e o su plus- alue eand he o ganic composi ion o capi al o sec o II, k
2
, a e:
e¼1�b 2
b 2
(A7)
k2¼τ2
a2 1
(A8)
Sol ing he sys em o join equa ions, we can ge he ollowing ela ionship be ween ela i e p ices and
ela i e alues o commodi ies:
�1�e
1þe� 1
2
<p1
p2
<�1þe
k2ð1þeÞ� 1
2
(A9)
Table A1. P oduc ion p ocess
Inpu Ou pu
Commodi y 1 Labo Commodi y 1 Commodi y 2
Sec o I a
1
τ
1
1 0
Sec o II a
2
τ
2
0 1
Sou ce(s): Au ho s’ own wo k
CPE
7,1
70
