Matter Matters: Productivity, Profit, and Non-Marginal Factor Prices
21 Pages Posted: 21 Oct 2011 Last revised: 6 May 2015
Date Written: October 20, 2011
Tastes and technology are the ultimate givens of standard economics. Their interaction is mediated by the marginal principle. This approach is unsuitable to explain the nature and magnitude of overall profit and its distribution within the business sector. The present paper therefore takes a quite different analytical route. The standard behavioral axioms are replaced by objective structural axioms and the standard production function is replaced by a sequential production function. From this new formal basis two exemplary factor prices, the product price, and the real wage are derived under the conditions of market clearing and equal profit ratios.
Keywords: new framework of concepts, structure-centric, axiom set, factors of production, substitution, profit redistribution, bargaining margin, equal profit ratios, metachoice
JEL Classification: D24, D33
Suggested Citation: Suggested Citation