Competing Theories of Value: A Spectral Analysis

Abstract

This paper is based on a spectral–controllability analysis of the Sraffian price system and develops a relevant reconstruction of the theory of value. It shows that (i) the hitherto competing theories of value correspond to specific complex plane locations of the eigenvalues of the vertically integrated technical coefficients matrix; and (ii) the real-world economies cannot be coherently analyzed in terms of the traditional theory of value (classical, Marxian, Austrian, and neoclassical), despite the fact that they are characterized by rather low degrees and relatively low numerical ranks of price controllability. Hence, on the one hand, the Sraffian theory of value is not only the most general to date, but also empirically relevant. On the other hand, the real-world economies constitute almost uncontrollable systems, and this explains, in turn, the specific shape features of the empirical price–wage–profit rate curves that are at the heart of the capital theory debate.