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VICTOR VALENTINOVICH NOVOZHILOV: A MARXIAN MATHEMATICAL ECONOMIST—IN HONOR OF THE 120th ANNIVERSARY OF HIS BIRTH
Abstract
This article attempts to present the important contribution of Victor V. Novozhilov to Marxian economic theory, the proof that the theory of optimal planning is the proper field of general economic equilibrium theory and that this theory, by fully respecting the objective law of value, leads to planned prices which equalize supply and demand and for which the labor theory of value holds: prices of production are proportional to marginal labor values. In Novozhilov's and Soviet terminology marginal labor values are differentially socially necessary labor which includes not only the socially necessary labor needed to produce a unit of a given product, as it is commonly understood by bourgeois and many Marxian economists, but also the socially necessary accumulation of the means of production. In mathematical programming this is the rational for the Lagrange multipliers and norms of effectiveness. Novozhilov in fact proves that in an optimal plan (Pareto optimum), prices are proportional to marginal labor values and use values.
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Notes
Jevons' 2nd edition of The Theory of Political Economy, footnote page xxxvii in the 5th edition.
"Relations of the Theory of Labour and Exchange" in the 4th and 5th edition on page 187.
Tugan- Baranowsky (1905: 144).