By first identifying that the preconditions necessary for J . B . Clark's old model of " aggregate " marginal productivity to hold true are the same as those necessary for Marxian values to conform to relative prices, we are then supposed to conclude that the foundation of Marx's analysis " as based in these preconditions " is faulty " because"
42.
He was further noted for producing a theory of interest and of profit in equilibrium based upon the interaction of diminishing marginal utility with diminishing marginal productivity of time and with time preference . ( This theory was adopted in full and then further developed by Knut Wicksell and, with modifications including formal disregard for time-preference, by Wicksell's American rival Irving Fisher .)
43.
Both Radelet and Sachs agreed that Krugman's critique is correct on a general point . " To the extent that growth is driven by capital accumulation rather than pure productivity gains, the marginal productivity of capital is likely to decline as the capital stock deepens-- that is, as capital per worker in the Asian economies rises to the level of Western economies, " they said.
44.
To clarify this point, it may be noticed that the special cases in question are also precisely those where J . B . Clark's old model of " aggregate " marginal productivity holds strictly true, leading to equality between the equilibrium levels of the real wage rate and labour's aggregate marginal product, a hypothesis regarded as disproved by all sides during the Cambridge capital controversy.
45.
Support for this theory comes from the idea that the returns gained by traders from the sale s price of slaves were offset by both the fall in the value of land that resulted from the subsequent decrease in the marginal productivity of land and the fall in the price of output, which occurred due to the increase in market size as given by westward expansion.
