Okishio's theorem

Okishio's theorem is the proposition obtained by comparing the equilibrium rate of profit before and after the introduction of new technology.

Okishio's theorem was therefore received in the West as establishing that Marx's proof of this fundamental result was inconsistent.

Okishio's theorem is a theorem formulated by Japanese economist Nobuo Okishio.

Okishio does not believe his famous Okishio's theorem rules out entirely the possibility of the Falling Rate of Profit taking effect.

Nevertheless Okishio's theorem is relevant because it denies that the FRP is established automatically from technical change by itself.

His ""The Okishio Theorem and Its Critics" was the first published response to the temporalist critique of Okishio's theorem.

N. Okishio, in 1961, devised a theorem (Okishio's theorem) showing that if capitalists pursue cost-cutting techniques and if the real wage does not rise, the rate of profit must rise.

The statement of Okishio's theorem, and the controversies surrounding it, may however be understood intuitively without reference to, or in-depth knowledge of, the Perron-Frobenius theorem or the general theory of nonnegative matrices.

The crux of Okishio's theorem is that the constant technological progess in the capitalist system of change and if the rate of profit falls in the long run, there must have happened an increase of real wage rate.

In the same paper, Laibman claimed that Okishio's theorem was true, even though the path of the temporally determined value rate of profit can diverge forever from the path of Okishio's material rate of profit.

The lack of any function to transform Marx's "values" to competitive prices has important implications for Marx's theory of labour exploitation and economic dynamics-namely that, some people argue with Okishio's theorem, that there is no tendency of the rate of profit to fall.

Okishio's theorem, they argued, has always been understood as a disproof of Marx's law of the tendential fall in the rate of profit, and Marx's law does not pertain to an imaginary special case in which input and output prices happen for some reason to be equal.

The Japanese economist Nobuo Okishio (see Okishio's theorem) famously argued, "if the newly introduced technique satisfies the cost criterion [i.e. if it reduces unit costs, given current prices] and the rate of real wage remains constant", then the rate of profit must increase (Okishio, 1961, p. 92).