The Structural Price Mechanism

Abstract

Standard economics rests on behavioral assumptions that are formally expressed as axioms. With the help of additional assumptions like perfect competition and equilibrium a price vector is established that displays a host of desired properties. This approach is tightly stuck in a cul-de-sac. Conceptual rigor demands to discard the subjective-behavioral axioms and to take objective-structural axioms as the point of departure. The present paper reconstructs the price system in structural axiomatic terms for the most elementary economic configuration. The generalization of the structural price mechanism supplants the collapsed Walrasian and Keynesian attempts to formulate a consistent price and value theory.

Keywords: new framework of concepts, structure-centric, axiom set, structural value theorem, harmonic structure, zero profit condition, full employment, deflation, price vector, wage rate vector, Say’s law

JEL Classification: D40, D46, D51