Reality Political Economy Pages


Planned Economy

Value theory


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Our aim in these pages is to give a defense of classical Marxian political economy. In particular we defend the Marxian ideas of the superiority of the planned over the free market economy. Secondarily we are concerned to show that the Labour Theory of value is scientifically valid, against various detractors.


Planned Economy

Transition to 21st Century Socialism in the European Union. programme presented at the Feb 2010 Berlin Conference on XXI Century Socialism.

REVIEW: THE DEVELOPMENT OF SOCIALIST ECONOMIC THOUGHT. This is a review of Maurice Dobb's book on the development of socialist economic thought.

 A reply to Brewster A response to the critique of Towards a New Socialism by the right wing economist Brewster

A critical look at market socialism A critique of market socialism particularly of Yunker.

von Mises Kantorovich and Economic Computation   A defence by Paul Cockshott of the work of the Soviet economist Kantorovich arguing that his work fundamentally undermined the critique of socialist economics by von Mises

  Towards XXI Century Socialism, with the help of the World Spirit, Heinz Dieterich

Computers and Economic Democracy – talk at the international seminar‘ New Historical Project’ Quito , 2003, power-point version.  Translated as LAS COMPUTADORAS Y LA DEMOCRACIA ECONOMICA,

In defense of socialist planning, by Ernest Mandel 

 Sozialismus ist machbar, Herr Nachbar! Helmut Dunkhase.

 On Ljungrens Plan and Market, also in Swedish as: För ett genomskinligt produktionssätt - W Paul Cockshott & Allain Cottrell röda rummet 3-02 PDF Swedish version

Communism: the abolition of private property, (Communist Formation 1977) an analysis of property relations with a view to seeing what it is that communism abolishes. (pdf version available)


.pdf version ( this will print properly on a postscript printer)

Translators introduction  With this work the Group of International Communists have put forward for debate, for the first time in the post-war history of the working class movement, the practical possibility of ordering social production and distribution on the basis of a use-value economy. They have brought together all the experience accumulated as a result of earlier attempts, by theoretical representatives of the working class of a previous era, to solve this most ultimate and conclusive of all areas of the revolutionary theory of the proletariat, in order that the root causes which in the final outcome render all those earlier efforts scientifically untenable may be laid bare and so prevented from generating further confusion.

Economic planning, computers and labor values Since the collapse of the Soviet Union it has seemed to many that the socialist calculation debate is essentially over, with a decisive verdict in favor of the market. Recent instabilities in the world market are again prompting the question whether some form of conscious regulation of economies may be appropriate. We argue that the increasing power of modern computer technology along with the use of Ricardian-Marxian labor values opens up new possibilities for economic planning. In particular we criticise the notion put forward by Samuelson that 'bourgeois prices' are the appropriate measure for socialist economic calculation.

PDF version

A critique of HayekHayek is a prominent right wing economist, a significant part of whose out has been devoted to attacking the very idea of socialism from an economic standpoint. This article isa detailed refutation to his claims that as an information processing system capitalism is superior to socialism.

Against MisesVon Mises was the first prominent economist to argue the impossibility of a socialist economy. His ideas continue to be recycled by opponents of socialism.

un modèle de planification efficace Bien sur, il y a des Marxistes qui ont rejete l’idee de planification, en favo-risant le " socialisme du marche ". Dans ce contexte-ci, nous ne pouvons que déclarer notre opposition à ce tour. Les mécanismes du marché — même qu’ils soient dirigés par un gouvernement dit socialiste — ne peuvent fournir ni l’égalité, ni la direction consciente de l’ensemble de production sociale, telles que le Marxisme classique les a envisagé.

Socialist Planning After the Collapse :  Analysis of what went wrong with central planning in the USSR .

 Value Markets and socialismThis paper which originally appeared in Science and Society outlines how the labour theory of value can be applied to planning a socialist economy.

Value Theory

Marxian reproduction prices versus prices of productionThis attempts to compare the implications of Marx's system of reproduction schemes to the system of prices of production. It shows that only a small proportion of feasible reproduction schemes are compatible with prices of production, and that there is no consistent dynamical process that will bring them into such compatibility. Indeed, from some starting points, free capital movement leads to economic decline.

Conservation laws, financial entropy and the Eurozone crisis, The report attempts of apply econophysics concepts to the Eurozone crisis. It starts by examining the idea of conservation laws as applied to market economies. It formulates a measure of financial entropy and gives numerical simulations indicating that this tends to rise. We discuss an analogue for free energy released during this process. The concepts of real and symbolic appropriation are introduced as a means to analyse debt and taxation.
We then examine the conflict between the conservation laws that apply to commodity exchange with the exponential growth implied by capital accumulation and how these have necessitated a sequence of evolutionary forms for money, and go on to present a simple stochastic model for the formation of rates of interest and a model for the time evolution of the rate of profit.
Finally we apply the conservation law model to examining the Euro Crisis and the European Stability pact, arguing that if the laws we hypothesise actually hold, then the goals of the stability pact are unobtainable.

Review of Althusser's book Philosophy of the Encounter

Review of Michael Heinrich's book on Marx's Capital
Competing Theories: Wrong or Not Even Wrong? Paul Cockshott The paper compares the claims of marginalist theory and the labour theory of value to be scientifically founded.

Information, Work, and Meaning an introduction to information theory by me and Greg Michaelson, it relationship to thermodynamics and to classical political economy with particular emphasis on how it applies to industrial mass production.

Testing the labour theory of value : an exchange
An exchange with Shimshon Bichler and Jonathan Nitzan stemming from an open letter originally posted by Stefanos Kourkoulakos regarding the conference
Crisis of Capital, Crisis of Theory held at York University Canada.

CREDIT CRUNCH: ORIGINS AND ORIENTATION PAUL COCKSHOTT AND DAVE ZACHARIAH , an article which looks at the causes of the credit crisis and how  economic policy should respond to it. 

  How Physics is validating the Labour Theory of Value, by Paul Cockshott/Zoltan Zigedy

Determinants of the average profit rate and the trajectory of capitalist economies, explains how the dynamics of a falling rate of profit constrain capitalism

From Adam Smith to the Equilibrium rate of profit .  an article that defends the scientific character of Smiths work and shows how one can derive the laws governing the time evolution of the rate of profit from his premises

Information Money and Value , by Cockshott, Cottrell, Wright and Michaelson

Draft edition of a book that unites Marxian value theory with statistical mechanics and information theory.

Labour value and equalisation of profit rates: , Dave Zachariah This study investigates the empirical strength of the labour theory of value and its relation to profit rate equalisation. It replicates tests from previous studies, using input-output data from 18 countries spanning from year 1968 to 2000. The results are broadly consistent; labour values and production prices of industry outputs are highly correlated with its market price. The predictive power is compared to alternative value bases. Furthermore, the empirical support for profit rate equalisation, as assumed by the theory of production prices, is weak.

Defining productive sectors , Dave Zachariah

The paper briefly discusses the concept of productive labor in the economy. From the standpoint of materialist social theory it attempts to formulate a simpler and more coherent definition than has been previously suggested.

Hunting productive work, Dave Zachariah and Paul Cockshott,
Provides an extended defence of the definition of productive labour given in the article above.

Testing the labor theory of value in Sweden, Dave Zacharaih
This study aims to investigate the empirical strength of the labor theory of value. Using
input-output data and labor hour statistics for Sweden it replicates tests done by Cockshott and
Cottrell (1998) for the British economy. Its results are broadly consistent: labor values are closely
correlated with market prices. When it comes to reality, the labor theory of value works at least as
well as the theory of production prices.

Hilbert space models commodity exchange, Paul Cockshott
A relatively technical article arguing that there are strong underlying similarities between the mathematical properties of the value form and of the maths underlying quantum physics.

Scientific Status of the Labour theory of Value:this paper argues that the labour theory of value is a scientific theory in the strongest sense of the empirical sciences. It shows that the criteria of science are in practice met by the labour theory of value.

Values law and values metric Examines what is meant by the law of value.

Profit exploitation and the development of capitalism

CREDIT CRUNCH: ORIGINS AND ORIENTATION PAUL COCKSHOTT AND DAVE ZACHARIAH , an article which looks at the causes of the credit crisis and how socialist economic policy should respond to it.

Imperialism in the 21st Century   by Paula Cerni

 Dr. Ambedkar or Dr. Marx An article that attempts to situate our work with respect to the Buddhist Socialism of the famous Dalit leader and intellectual Ambedcar.

Marxism in the 21st Century  by Paul  Cockshott

In defence of the theory of the falling rate of profit, We discuss the original formulation of the theory of the falling rate of profit by Marx and the criticisms of the theory’s micro-foundations by Roemer. We then counterpose to this an alternative macroeconomic interpretation in which the falling rate of profit is driven by demographic factors. We follow this up with an examination of why the assumptions made in Roemer’s analysis are empirically unjustified. In particular we criticize his use of the average rate of profit rather than the monetary interest rate as the regulator of investment decisions. We conclude with an examination of the social implications of a declining rate of profit.

“…the difficulty which has hitherto troubled the economists, namely to explain the falling rate of profit…�? ( Marx)

The organic composition of capital and profit rates,  Allin Cottrell and Paul Cockshott
 Shows that industries with high organic composition have low profit rates. This contrary to what one would expect from Neo-Ricardian and orthodox Marxian theory, but in conformity with volume I of Marx’s Capital.

Testing Marx with Input Output Tables. An analysis of the UK economy over the last 100 years bearing out the validity of the labour theory of value and other marxian economic theories. This is in pdf format.