Theories of Value and the Monetary Theory of Production

Levy Economics Institute Working Paper No. 261

35 Pages Posted: 6 May 1999

See all articles by L. Randall Wray

L. Randall Wray

University of Missouri at Kansas City; Bard College - The Levy Economics Institute

Date Written: January 1999

Abstract

This paper extends earlier work (Wray 1991; see also Wray 1992b) that argued that liquidity preference theory should be interpreted as a theory of value. Here I will argue that two theories of value are needed for analysis of a monetary production economy: the labor theory of value and the liquidity preference theory of value. Both Keynes and Marx were trying to develop a monetary theory of production; Marx, of course, adopted a labor theory of value in his analysis, and it was previously argued that Keynes adopted a liquidity preference theory in his. A monetary theory of production should adopt both, however, and I will argue that Keynes seems to have recognized this. Further, Keynes did adopt labor hours as the measure of value and said he agreed that labor produces all value. I admit it is still a leap to claim that Keynes accepted both theories of value. Instead, I argue he should have adopted both and will show that this is consistent with the purposes of the General Theory.

JEL Classification: E49

Suggested Citation

Wray, L. Randall, Theories of Value and the Monetary Theory of Production (January 1999). Levy Economics Institute Working Paper No. 261, Available at SSRN: https://ssrn.com/abstract=150497 or http://dx.doi.org/10.2139/ssrn.150497

L. Randall Wray (Contact Author)

University of Missouri at Kansas City ( email )

5100 Rockhill Road
Kansas City, MO 64110-2499
United States

Bard College - The Levy Economics Institute

Blithewood
Annandale-on-Hudson, NY 12504-5000
United States

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