RE: marx on money

[Allin Cottrell <cottrell@xxxxxxxxxxxxxxxxx>]

I'm not sure I understand Jim's references to Marx's
"silliness" in assuming that prices are proportional
to (labor) values, or to the "so-called labor theory
of value".  Shaikh has showed, by reference to both
US and Italian input-output tables, that values and
prices are indeed very close to proportional, with
R^2's on the order of 96-98 per cent.  (In "Ricardo,
Marx, Sraffa", E. Mandel, ed., 1984).  Petrovic and
Ochoa (CJE, 1987 and 1989 respectively), confirmed
this result on Yugoslav and further US data.  Paul
Cockshott and I have recently replicated Shaikh's
study using the 1984 UK input-output tables: our
findings were essentially the same.  Ricardo and Marx
were right: the labor theory of value stands up to
empirical scrutiny as well as just about any theory
in economics, and better than most!

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Allin Cottrell
Department of Economics
Wake Forest University
cottrell@xxxxxxxxxxxxxxxxx
(910) 759-5762
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