Social Sciences
2 years ago

Aggregate production function reveals true distribution of wages and profits.

The New Palgrave Dictionary of Economics
humbug production function
Anwar Shaikh

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The article discusses how wages and profits are determined in neoclassical economics. It explains that labor and capital are connected to output through an aggregate production function, where the wages and profits are based on the marginal products of labor and capital. In competitive equilibrium, each social class receives the equivalent of the marginal product of the factor it owns.