Presentation by Mikael Malmaeus
Historically, value theories used to be at the heart of critiques of capitalism. However, contemporary economists rarely focus on value theories, and the labor theory of value has not been discussed in relation to macroeconomic growth or in the context of degrowth. In this article it is theoretically and empirically demonstrated that economic values at the macroeconomic level are fundamentally determined by the use of production factors, primarily labor and physical capital as predicted by the labor theory of value. Technical innovations or efficiency gains increasing utility without raising the costs of production do not add to the GDP unless they stimulate investments in physical capital. It is also shown that the Solow model, which is frequently applied in growth accounting, cannot be meaningfully applied to predict changes in the monetary value of production at the macro level and that results obtained with this model, indicating that increases in total factor productivity play a major role in achieving GDP growth, are theoretically flawed. In practice, GDP growth is mostly explained by capital accumulation and a key question is whether or not capital accumulation can be decoupled from the use of materials and energy. What is certain is that GDP growth cannot, according to the labor theory of value, be decoupled from capital investments and degrowth therefore implies the end of capital accumulation. Beyond GDP growth the role of human labor in the realization of economic values will be accentuated.