Another Reply to Park: Given Real Wage and Endogenous Output are not Consistent with the MMI

Abstract

This paper responds to Park (2019b) which attempts to add an input-output structure to my macro-monetary interpretation of Marx’s theory (abbreviated as MMI) in order to incorporate the equilibrium condition of input prices = output prices into my interpretation. He considers two cases – a real wage case and a nominal wage case. I argue that both of these cases are not compatible with the MMI. The real wage case is not compatible with the MMI because there is no such thing in reality of a given bundle of wage goods paid to all workers. Both cases are not consistent with the MMI because the quantities of output produced in different industries are treated as endogenous variables that are determined within Park’s model, not taken as given as in Marx’s theory and the MMI. The paper also presents an alternative method of incorporating the equality input prices = output prices into the MMI, based on Marx’s logical method of the sequential determination of levels of abstraction from macroeconomic variables to microeconomic variables.