The Review of Austrian Economics

, Volume 26, Issue 2, pp 207–220 | Cite as

Testing Böhm-Bawerk’s theory of capital: Some evidence from the Finnish economy

  • Theodore MariolisEmail author
  • George Soklis
  • Eugenia Zouvela


This paper considers the pure labour theory of value and Böhm-Bawerk’s theory of capital as approximations of Sraffa’s model of single production, and tests them with data from the Symmetric Input-output Tables of the Finnish economy. The results show that (i) in comparison with the labour values, the actual Böhm-Bawerkian production prices are ‘equally’ good or even better approximations of the actual Sraffian production prices and market prices; and (ii) the Sraffian production price-profit rate relationship is, by and large, governed by the differences in the Böhm-Bawerkian average periods of production.


Average period of production Böhm-Bawerk’s theory of capital Empirical labour theory of value Sraffian theory 

JEL classification

B25 B51 C67 D46 D57 


  1. Bidard, C. (1991). Prix, Reproduction, Rareté. Paris: Dunod.Google Scholar
  2. Bienenfeld, M. (1988). Regularity in price changes as an effect of changes in distribution. Cambridge Journal of Economics, 12, 247–255.Google Scholar
  3. Böhm-Bawerk, E. von. ([1889] 1959). Capital and Interest. South Holland, Illinois: Libertarian Press.Google Scholar
  4. Burmeister, E. (1974). Synthesizing the neo-Austrian and alternative approaches to capital theory: a survey. Journal of Economic Literature, 12, 413–456.Google Scholar
  5. Burmeister, E. (1980). Capital Theory and Dynamics. Cambridge: Cambridge University Press.Google Scholar
  6. Cockshott, P., Cottrell, A., & Michaelson, G. (1995). Testing Marx: some new results from UK data. Capital and Class, 55, 103–129.CrossRefGoogle Scholar
  7. Faber, M. (1980). Relationships between modern Austrian and Sraffa’s capital theory. Zeitschrift für die gesamte Staatswissenschaft/Journal of Institutional and Theoretical Economics, 136, 617–629.Google Scholar
  8. Fink, G. (1980). Price distortions in the Austrian and in the Hungarian economy. Journal of Economics, 41, 111–132.CrossRefGoogle Scholar
  9. Gintis, H., & Bowles, S. (1981). Structure and practice in the labor theory of value. Review of Radical Political Economics, 12, 1–26.CrossRefGoogle Scholar
  10. Hicks, J. R. (1939). Value and Capital. Oxford: Clarendon.Google Scholar
  11. Hicks, J. R. (1973). Capital and Time: A Neo-Austrian Theory. Oxford: Oxford University Press.Google Scholar
  12. Horn, R., & Johnson, C. R. (1990). Matrix Analysis. Cambridge: Cambridge University Press.Google Scholar
  13. Howard, M. C. (1980). Austrian capital theory: an evaluation in terms of Piero Sraffa’s Production of Commodities by Means of Commodities. Metroeconomica, 32, 1–23.CrossRefGoogle Scholar
  14. Kurz, H. D., & Salvadori, N. (1995). Theory of Production. A Long-Period Analysis. Cambridge: Cambridge University Press.CrossRefGoogle Scholar
  15. Lager, C. (2000). Production, prices and time: a comparison of some alternative concepts. Economic Systems Research, 12, 231–253.CrossRefGoogle Scholar
  16. Macaulay, F. R. (1938). Some Theoretical Problems Suggested by the Movements of Interest Rates, Bond Yields, and Stock Prices in the United States since 1856. New York: Columbia University Press.Google Scholar
  17. Mariolis, T., & Soklis, G. (2010). Additive labour values and prices: evidence from the supply and use tables of the French, German and Greek economies. Economic Issues, 15, 87–107.Google Scholar
  18. Mariolis, T., & Soklis, G. (2011). On constructing numeraire-free measures of price-value deviation: a note on the Steedman-Tomkins distance. Cambridge Journal of Economics, 35, 613–618.CrossRefGoogle Scholar
  19. Mariolis, T., & Tsoulfidis, L. (2009). Decomposing the changes in production prices into ‘capital-intensity’ and ‘price’ effects: theory and evidence from the Chinese economy. Contributions to Political Economy, 28, 1–22.CrossRefGoogle Scholar
  20. Mariolis, T., & Tsoulfidis, L. (2010). Measures of production price-labour value deviation and income distribution in actual economies: a note. Metroeconomica, 61, 701–710. enlarged version available at: Scholar
  21. Mariolis, T., & Tsoulfidis, L. (2011). Eigenvalue distribution and the production price-profit rate relationship: theory and empirical evidence. Evolutionary and Institutional Economics Review, 8, 87–122. enlarged version available at: Scholar
  22. Ochoa, E. (1989). Value, prices and wage-profit curves in the US economy. Cambridge Journal of Economics, 13, 413–429.Google Scholar
  23. Orosel, G. O. (1979). A reformulation of the Austrian theory of capital and its application to the debate on reswitching and related paradoxa. Journal of Economics, 39, 1–31.CrossRefGoogle Scholar
  24. Pasinetti, L. (1973). The notion of vertical integration in economic analysis. Metroeconomica, 25, 1–29.CrossRefGoogle Scholar
  25. Petrović, P. (1987). The deviation of production prices from labour values: some methodological and empirical evidence. Cambridge Journal of Economics, 11, 197–210.Google Scholar
  26. Schefold, B. (2008a). Families of strongly curved and of nearly linear wage curves: a contribution to the debate about the surrogate production function. Bulletin of Political Economy, 2, 1–24.Google Scholar
  27. Schefold, B. (2008b). Approximate surrogate production functions. Institut für Volkswirtschaftslehre, Johann Wolfgang Goethe-Universität, Mimeo (New version (2010) available at:
  28. Shaikh, A. (1984). The transformation from Marx to Sraffa. In A. Freeman & E. Mandel (Eds.), Ricardo, Marx and Sraffa. London: Verso.Google Scholar
  29. Shaikh, A. M. (1998). The empirical strength of the labour theory of value. In R. Bellofiore (Ed.), Marxian Economics. A Reappraisal (2nd ed.). London: Macmillan.Google Scholar
  30. Shaikh, A. (2012). The empirical linearity of Sraffa’s critical output-capital ratios. In C. Gehrke, N. Salvadori, I. Steedman, & R. Sturn (Eds.), Classical Political Economy and Modern Theory. Essays in honour of Heinz Kurz. London and New York: Routledge.Google Scholar
  31. Shibata, K. (1935). On Böhm-Bawerk’s theory of interest-rate. Kyoto University Economic Review, 10, 107–127.Google Scholar
  32. Soklis, G. (2009). Alternative value bases and prices: evidence from the input-output tables of the Swedish economy. Journal of Applied Input-output Analysis, 15, 21–39.Google Scholar
  33. Soklis, G. (2011). Shape of wage-profit curves in joint production systems: evidence from the supply and use tables of the Finnish economy. Metroeconomica, 62, 548–560. enlarged version available at: Scholar
  34. Sraffa, P. (1960). Production of Commodities by Means of Commodities. Prelude to a Critique of Economic Theory. Cambridge: Cambridge University Press.Google Scholar
  35. Steedman, I. (1991). The irrelevance of Marxian values. In G. A. Caravale (Ed.), Marx and Modern Economic Analysis (Vol. 1). Aldershot: Edward Elgar.Google Scholar
  36. Steedman, I. (1999). Vertical integration and ‘reduction to dated quantities of labour. In G. Mongiovi & F. Petri (Eds.), Value Distribution and Capital. Essays in Honour of Pierangelo Garegnani. London and New York: Routledge.Google Scholar
  37. Steedman, I., & Tomkins, J. (1998). On measuring the deviation of prices from values. Cambridge Journal of Economics, 22, 379–385.CrossRefGoogle Scholar
  38. Tsoulfidis, L. (2008). Price-value deviations: further evidence from input-output data of Japan. International Review of Applied Economics, 22, 707–724.CrossRefGoogle Scholar
  39. Tsoulfidis, L., & Maniatis, T. (2002). Values, prices of production and market prices: some more evidence from the Greek economy. Cambridge Journal of Economics, 26, 359–369.CrossRefGoogle Scholar
  40. Tsoulfidis, L., & Mariolis, T. (2007). Labour values, prices of production and the effects of income distribution: evidence from the Greek economy. Economic Systems Research, 19, 425–437.CrossRefGoogle Scholar
  41. Val’tukh, K. K. (1987). Marx’s Theory of Commodity and Surplus Value. Formalised Exposition. Moscow: Progress Publishers.Google Scholar
  42. Val’tukh, K. K. (2005). The theory of value: statistical verification, generalization of information, and topical conclusions. Herald of the Russian Academy of Sciences, 75, 516–528.Google Scholar
  43. von Weizsäcker, C. C. (1971). Steady State Capital Theory. Berlin: Springer Verlag.CrossRefGoogle Scholar
  44. von Weizsäcker, C. C. (1974). Substitution along the time axis. Kyklos, 27, 732–756.CrossRefGoogle Scholar
  45. von Weizsäcker, C. C. (1977). Organic composition of capital and average period of production. Revue d’Économie Politique, 87, 198–231.Google Scholar

Copyright information

© Springer Science+Business Media, LLC 2012

Authors and Affiliations

  • Theodore Mariolis
    • 1
    Email author
  • George Soklis
    • 1
  • Eugenia Zouvela
    • 1
  1. 1.Department of Public AdministrationPanteion UniversityAthensGreece

Personalised recommendations