Value Theory

1627 Words7 Pages
Introduction In this essay it disused the link respectively between value theory and distribution theory both in classic political economic school, Karl Marx political economic school and Knut economic school. And then it provided evidence to illustrate the correctness of the contention. Moreover, it expounded the common element between different view of value and distribution in these three theories. At the end of essay, it summarized the main idea of this essay. Link between value and distribution in classical economy David Ricardo as one of representative economist in the classics economy, their studies have made outstanding contributions not only to the classical political economy but also to the whole society. David Ricardo inheritance and developed the theory of value that smith build, meanwhile, he become to consummator of classics theory of labor value , who brought prosperity to classics political economy. Ricardo built an important bridge between the theory of Adam smith and theory of Marx. In his theory of value, he insisted on commodity value was determined by labor time and negated the view of Smith that value was determined by purchased labor power and three factor determined value. ‘On the Principles of Political Economy and Taxation’ is magnum opus of Ricardo. In this book, he point out value theory is separable with distribution theory. For the theory of value, Ricardo support and accept the idea of Smith which differentiated between use value and exchange value, meanwhile, he criticized the point which smith assert great exchange value do not have use value. He point out use value is not the exchange value, but it is essentially for exchange value. For one commodity, it might have one use value but it must hav... ... middle of paper ... ..., equilibrium price equaled the cost which also can be regard as quantity of value. This argument can be used in the labor theory also. Conclusion To conclude, there are strong link between value and distribution theory in the classic, Marx and wicksellian theory. Ricardo as the most representative classical economist firstly provide value and distribution theory that lay a foundation. In Marx concept, it inherited the idea of value theory and it improved to labor value theory. For the Wicksellian capital theory, it repudiated the view of value and distribution in classic and Marx economic theory. Both of these distribution theories were based on the value theory. Furthermore, marx study and classical study were all subjective, and they have same opinion at rent distribution theory. The assumption of human nature is identical between marx view and wickliam view.
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