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Takesh Nakatani(kobe University, Greenwich University) Professor Okishio wrote many papers covering various important fields, for example value and price, accumulation theory, critical analysis of Keynesian economics, trade cycle theory and on the long run tendency of capitalistic economy. They were published in over twenty books and two hundred papers, unfortunately almost in Japanese. In English about thirty papers are published and main materials are collected in the following book. Nobuo Okishio, Michael Kruger and Peter Flaschel(1993), NOBUO OKISHIO ESSAYS ON POLITICAL ECONOMY: COLLECTED PAPERS, Peter Lang Publishing (ISBN 3631435584) We focus today the following topics and summarize his work as objectively as possible. I have studied economics for long years under Professor Okishios guidance. So objectively speaking needs some efforts. I know you have some critics about Okishios work but first I focus to introduce his own main research itself.
ignore this fact because there exists some discrepancy between prices and values. Here, of course, prices mean output prices and values mean input prices at the first stage. So Marx suggested the need to proceed this iterative transformation process to the end. Marx completely showed the transformation formula although he left others to do it. Okishio executed the iteration process to the end using mathematical tools and proved that it converges to production price equilibrium with positive profits, i.e. equal to Bortkiewitz equation. One important finding relating this work is that the equilibrium rate of profit and the production prices are determined depending on real wage rate and technologies in basic sectors only. This result was accepted with surprise, because many economists considered that non-basic sectors also have some relations with the equilibrium rate of profit. As far as Japan concerned, some heated arguments are held between Okishio and some other Marxian economists.
Keynes denied the harmonic adjusting mechanism of market economy. Keynes also emphasized the independent and volatile role of investment demand in capitalistic economy. In these respects Keynes shared the similar viewpoint with Marx. Recent New Keynesian or Neo Keynesian has been neglecting these fundamental characteristics of original Keynes theory.
1. Crisis Theory
Capitalistic accumulation process displays instability. However, for one production system to survive for long years, some kinds of equilibrium or near equilibrium conditions must be satisfied. In the shot run the economy diverges from the equilibrium growth path due to Harrod Instability but in the long run it satisfy several conditions as shown in Reproduction Formula of Marx Book Two. Okishio proceeds to investigate the crisis theory to reconcile these two requirements by introducing crisis theory as regulating mechanism. His accumulation theory is published in his main publication CHIKUSEKIRON Accumulation Theory in Japanese.
Recently Okishio is scrutinizing the relation between profits and competition. As I stated in Okishio Theorem, Okishio Theorem is the proposition obtained by comparing the equilibrium rate of profit before and after the introduction of new technology. Whether the economic disturbances due to technical change will smoothly converge to new stationary state is very problematic.
1. Tentative Results
Okishios tentative conclusion on this problem is that competition can drive the economy to zero-profit equilibrium unless there exist no continuous technical innovations or an increase in labor supply or independent capitalist consumption. This investigation is still under way.
1. Work to Do
This viewpoint is exactly the same with Marxs historical dialectic. If this is correct, the necessity for capitalistic society to be switched to another economic system can be proved by showing the following two. First, we have to prove how production power advances in capitalistic society. Next, we have to show what is the upper bound of production power for capitalistic economy to be able to work effectively.
BIBLIOGRAPHY Monopoly and the Rates of Profit, KER 1955 Durable Equipment and Equilibrium Growth, KER 1958 Technical Change and the Rate of Profit, KER 1961 A Mathematical Note on Marxian Theorems, Weltwirtschaftliches Archiv Vol.91 No.2, 1963 Instability of Harrod=Domars Steady State, KER 1964 Technical Choice under Full Employment in Socialist Economy, Economic Journal Vol.76, 1966 On Mr. N Kaldors Growth Model, KER 1967 Technical Choice and Planning Price, Australian Economic Paper Vol.6 No.8, 1967 An Extension of a Discrete Version of Pontryagins Maximum Principle and its simple Application, KER 1970 A Formal Proof of Marxs two Theorems, KER 1972 Value and Production Price, KER 1974 A Formal Proof of Marxs two Theorems: Reply, KER 1974 Fixed Capital and Extended Reproduction, KER 1975 Marxian Fundamental Theorem, lecture note in Wochum Unicersity, 1976 Marxian Fundamental Theorem: Joint-Production Case, KER 1976 Notes on Technical Progress and Capitalist Society, Cambridge Journal of Economics 1, 1977 Theorems of Investment Truncation, KER 1977 Inflation as an Expression of Class Antagonism, KER 1977 Three Topics on Marxian Fundamental Theorem, KER 1978 Dimensional Analysis in Economics, KER 1982 The Decision of New Investment, Technique and Rate of Utilization, KER 1984 A Measurement of the Rate of Surplus Value in JAPAN: the 1980 case, KER 1985 Stagflation: Causes and Policies, KER 1986 Theoretical Foundations of International Macroeconomic Model, KER 1987 A Sketch of Theory of Trade Cycle, KER 1988 On Marxs Reproduction Scheme, KER 1988 Problems and Method of Economics, KER 1989 On the Theories of Determination of the Real Wage Rate, KER 1989 To What Dissent, Bibliographical Dictionary of Dissenting Economists, Edward Elgar Publishing, 199? NOBUO OKISHIO ESSAYS ON POLITICAL ECONOMY: COLLECTED PAPERS, Peter Lang Publishing, Okishio, Michael Kruger and Peter Flaschel, 1993