Capital Theory: Effective Demand and Monetary Theory

Author: Liu Xin
Publisher:
Publish Date: 2003-12-01
Features: The main argument of the book "Capital Theory—Value, Distribution, and Growth Theory" is "the interaction between technological relations and income distribution," contrasting it with the pure technological analysis of the neoclassical mainstream theory. The book derives a definitive conclusion from a modified classical model, stating that when capitalists or firms use a given "capital" or money to purchase labor and capital goods, their profit maximization is not based on the tenet of the neoclassical theory that makes the marginal product of factors, but rather on the classical condition that allows the ratio of the two factors to achieve a unified rate of profit. This given "capital" or money assumption is precisely the real-world condition. This conclusion is highly important for understanding the relationship between technological relations and income distribution. The purpose of this book is to establish a new theoretical system, change the neoclassical dogma ingrained in people's minds, and reinterpret economics and the society we live in from a new perspective. Obviously, this goal is overly ambitious and may just be the reflection of a decade-long window of contemplation, but the author still hopes that readers of this book can find some inspiration in it.