Let us assume that wages and profit fell simultaneously in total value, from whatever cause (for example, because the nation had grown lazier), and at the same time in use value (because labour had become less productive owing to bad harvests, etc.), in a word, that the part of the product whose value is equal to the revenue declines, because less new labour has been added in the past year and because the labour added has been less productive...Prescott, Barro, Sargent, Lucas, etc. owe this guy royalties! or at least a footnote.
Sunday, November 7, 2010
Karl Marx, Original Real Business Cycle Theorist
From Theories of Surplus Value: