20 Pages Posted: 21 Oct 2012 Last revised: 11 Mar 2013
Date Written: September 27, 2012
This article attempts to present the important contribution of Victor V. Novozhilov to Marxian economic theory, the proof that the theory of optimal planning is the proper field of general economic equilibrium theory and that this theory, by fully respecting the objective law of value, leads to planned prices which equalize supply and demand and for which the labour theory of value holds: prices of production are proportional to marginal labour values. In Novozhilov's and Soviet terminology marginal labour values are differentially socially necessary labour which includes not only the socially necessary labour needed to produce a unit of a given product, as it is commonly understood by bourgeois and many Marxian economists, but also the socially necessary accumulation of the means of production. In mathematical programming this is the rational for the Lagrange multipliers and norms of effectiveness. Novozhilov in fact proofs that in an optimal plan (Pareto optimum), prices are proportional to marginal labour values and use values.
Keywords: differentially socially necessary labour, general equilibrium theory, law of value, labour theory of value, Marxian economics, Pareto optimum, planning prices, theory of optimal planning, Victor V. Novozhilov
JEL Classification: B31, D50, P11, P21, P22
Suggested Citation: Suggested Citation
Hagendorf, Klaus, Victor Valentinovich Novozhilov: A Marxian Mathematical Economist: In Honour of the 120th Anniversary of His Birth (September 27, 2012). Available at SSRN: https://ssrn.com/abstract=2164935 or http://dx.doi.org/10.2139/ssrn.2164935