The Labour Theory of Property and Marginal Productivity Theory

Economic Thought 5 (1):19 (2016)
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After Marx, dissenting economics almost always used 'the labour theory' as a theory of value. This paper develops a modern treatment of the alternative labour theory of property that is essentially the property theoretic application of the juridical principle of responsibility: impute legal responsibility in accordance with who was in fact responsible. To understand descriptively how assets and liabilities are appropriated in normal production, a 'fundamental myth' needs to be cleared away, and then the market mechanism of appropriation can be understood. On the normative side, neoclassical theory represents marginal productivity theory as showing that the imputation principle is satisfied in competitive enterprises. Since that shows the moral commitment of neoclassical economics to the imputation principle, the labour theory of property is presented here as the actual non-metaphorical application of the imputation principle to property appropriation. The property-theoretic analysis at the firm level shows how the neoclassical analysis in terms of 'distributive shares' wholly misframed the basic questions. Finally, the paper shows how the imputation principle is systematically violated in the present wage labour system of renting persons. The paper can be seen as taking up the recent challenge posed by Donald Katzner for a dialogue between neoclassical and heterodox microeconomics.
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Capitalism and Freedom.Friedman, Milton
A Treatise of Human Nature.Hume, David & Lindsay, A. D.
A Matter of Principle.Dworkin, Ronald

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