Value and Labour‪.‬

Peter C. Dooley. The Labour Theory of Value (Routledge Frontiers of Political Economy No. 70). London: Routledge. 2005. Pp. xvi + 285. ISBN 0-415-32821-7. [pounds sterling] 65.00. The subjective theory of value which emerged in the latter part of the nineteenth century, and subsequently rose to dominance during the twentieth century, offers a striking contrast with the objective approach to value, severally taken by the classical authors from Petty to Marx. The subjective approach reached its high point in the decades following World War II, in the research programme of general equilibrium theory--a programme which, at least from a constructive point of view, proved to be a failure. It was unable to provide a plausible account of relative prices, along 'demand-and-supply' lines, for a decentralised market economy (vide Kirman 1979). The classical approach, on the other hand, culminated in Ricardo and Marx; (1) and the conception of relative price determination as being grounded in production conditions (and distribution) came to be identified with the labour theory of value. This, notwithstanding that Ricardo and Marx were very much alive to its lack of validity in explaining the determination of production prices independent of the general profitability of capital (or real wage). The labour theory of relative prices also loses any general validity in a decentralised economy, though for reasons somewhat different from those which ended up compromising the subjective approach.