Academic journal article World Review of Political Economy


Academic journal article World Review of Political Economy


Article excerpt

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.

Key words: differentially socially necessary labor; general equilibrium theory; law of value; labor theory of value; Marxian economics; Pareto optimum; planning prices; theory of optimal planning; Victor V. Novozhilov


At first sight it may seem inappropriate for a non-mathematical non-Russianspeaking Western economist attempting to appreciate the works of an eminent Soviet mathematical economist who has contributed very much of his life to the really revolutionary task of organizing the socially planned economy of the Soviet Union serving to the best of her people. And this work on the build-up of the first socialist state on earth was always being threatened by Western capitalist states with devastating military as well as economic attacks.

Of course we cannot deal with his role in the discussions on the organization of the economic structure of the Soviet Union, nor can we go into details of his analysis in his many articles as they are in Russian and so, for the time being, inaccessible for the author. But nevertheless some of his papers have been translated into German and/or English and French. I am referring to:

* "Arbeitswerttheorie und Mathematik" (Nowoshilow 1965)

* "Mesures des dépenses de production et de leurs résultats en Economie Socialiste" (Novozhilov 1964)

* Problems of Cost-Benefit Analysis in Optimal Planning (Novozhilov 1970)

and to the diverse comments on and reviews of these works by Western commentators. And although this is a very thin basis it is still sufficient to underline the importance of Novozhilov's work for the Marxian understanding of modern bourgeois economics. When Marxism is in a deep crisis it is precisely because Western lefteconomists usually ignore the achievements of the Soviet mathematical economists or are incapable to grasp properly their significance. Here we find the theoretical and ideological causes of the present-day world economic and financial, social and political crisis. Not only Western lefteconomists but even economists of the real existing socialist states have not sufficiently taken notice of the works of the Soviet mathematical economists and have not worked on their proper integration into Marxian economic doctrine. Although Soviet mathematical economists have really succeeded in the further development of Marxian economics overcoming the contradictions of the orthodox interpretations, the communist parties worldwide have not succeeded to adapt their ideological views appropriately, not to speak of a common socialist political economy to counter neoliberal ideology.

There are many other works of the Soviet mathematical economists which are accessible to the Western reader, notably those of Nobel Prize winner Leonid Kantorovich, but the particular importance of Victor V. Novozhilov is that he has attempted explicitly to integrate modern mathematical economics into Marxian theory. …

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