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      Comment on H. Nicholas's Paper “What is the Problem with Neoclassical Price Theory?”

      research-article
      World Review of Political Economy
      Pluto Journals
      neoclassical, Walras, post-Walras, production, capital and money, commodity prices
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            Abstract

            This comment shows that Walras, the central figure among the Neoclassical school founders, describes a comprehensive theory of production, capital and money; hence, Nicholas's main claims that “the Neoclassical approach has a fundamentally flawed view of the determination of commodity prices because it conceives of them as being formed in the first instance in the process of exchange abstracting, in the sense of ignoring, production and money” are not based on Walras's theory, and they are unfounded and incorrect. Nicholas accepts the erroneous method of post-Walras authors, namely, when they discuss Walras's approach, the economy is presented either through the exchange economy or through the production economy; moreover, these representations differ from his original model and are incomplete. The result is that these two different theories, post-Walras authors' theory and Walras's original theory, have been identified with each other; and these terms are used interchangeably as if they are not any different from each other.

            Content

            Author and article information

            Journal
            10.13169
            worlrevipoliecon
            World Review of Political Economy
            Pluto Journals
            2042891X
            20428928
            Spring 2015
            : 6
            : 1
            : 132-147
            Article
            worlrevipoliecon.6.1.0132
            10.13169/worlrevipoliecon.6.1.0132
            7acc32c4-1e33-42d9-8366-f94c010354de
            Copyright 2015 World Association for Political Economy

            All content is freely available without charge to users or their institutions. Users are allowed to read, download, copy, distribute, print, search, or link to the full texts of the articles in this journal without asking prior permission of the publisher or the author. Articles published in the journal are distributed under a http://creativecommons.org/licenses/by/4.0/.

            Categories
            Communications

            Political economics
            Walras,production,capital and money,commodity prices,post-Walras,neoclassical

            Notes

            1. Marx stated, “CAPITAL—Profit (Profit of Enterprise plus Interest), Land—Ground-Rent, Labor— Wages, this is the trinitarian formula which comprises all the secrets of the social process of production.” http://www.econlib.org/library/YPDBooks/Marx/mrxCpC48.html#Part VII, Chapter 48

            2. “Walras's ‘cash-balance’ theory of money is both valuable in itself and remarkable in the way it is integrated into his general equilibrium system” (Hutchison [1953] 1962, 209).

            3. “In particular, the best-developed modern Walrasian general-equilibrium models cannot find room for money” (Bridel 1997).

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