What is the Theory of Marginal Productivity Distribution

It means that the remuneration paid or income received for a unit of services of a certain factor will be equal to the reduction in the value of the commodity produced if the unit of factor of production were to be removed from production while the other factors remained unchanged. This reason was first developed by the American economist Clark at the end of the 19th century and further used in his distributive analysis.

1. The Theory of Marginal Productivity.

The foreign name is theoryofmarginalproductive

Proposed by Clark, the first time, the expression formula of the late 19th century.

The marginal return product is equal to the product of the marginal material product and the marginal return of the factor, and the marginal productivity theory MRP=MP MRP, therefore, the marginal return product MRP of the variable factor depends on two factors: the change in the marginal material product (MP) brought about by increasing one unit of factor input; The change in revenue (MR) added by adding one unit of product. In particular, the output of the last employed worker is called the marginal productivity of labor or the marginal yield of labor; The output of the last additional unit of capital is called the marginal productivity of capital or the marginal yield of capital.

2. Theoretical significance: The theory of marginal productivity is the cornerstone of neoclassical economic theory. The theory of marginal productivity is a method used to clarify the remuneration of various factors of production or resources that cooperate with each other in production. Under normal circumstances, when the quantity of other factors remains unchanged, the decrease (or increase) in the value of commodity output caused by the departure (or addition) of a certain factor of production from the production process is equal to the service remuneration or other remuneration of one unit of that factor of production.

Here it is clear that the remuneration of the factors of production is determined by the technical conditions of the production process.

Third, the production function, the traditional manufacturer theory has strong assumptions, so that the so-called production function can be specified. This production function represents the maximum amount of physical output that can be obtained from a technically feasible combination of physical inputs under the prevailing technical knowledge of the relationship between inputs and outputs that can be freely applied. It is customary to divide inputs into more or less similar types, and each type of input should be expressed in terms of "man-hour", "machine-hour" and "acre-year", rather than "labour", "capital" and "land", because the inputs involved here are flow variables and not stock variables.

For the sake of convenience, further assumptions have been made that the micro-production function is smooth and varied, and that there is a strictly necessary assumption that the firm is maximizing profits (without taking into account the psychological income of the entrepreneur), so that the traditional firm theory derives the input demand function by transforming the marginal productivity equation.

Theory of Marginal Productive The term "marginal productivity" was coined by the American economist Clark at the end of the 19th century and further used in his analysis of distribution theory. It refers to the increase in output for each additional unit of factor input, i.e., marginal physical product (sometimes referred to as marginal product MP) under the premise that other conditions remain constant. The increase in output brought about by increasing one unit of factor input is called marginal return.

Marginal Revenue Product (MRP). The marginal return product is equal to the product of the marginal material product and the marginal return of the factor, i.e.:

The theory of marginal productivity distribution is a theory in economics that asserts that the market supply and demand of factors (such as land, labor, and capital) jointly determine the ** of factors. This theory is also known as Euler's theorem.

In addition, the theory of the distribution of marginal productivity is also considered to be the "net exhaustion theorem of product distribution", that is, the income of the owners of factors of production should be equal to the value of their products that end up in the hands of consumers.

In economics, this theory is important for understanding how the market determines factors** and income distribution.

The micro theories of neoclassical economics, namely the marginal utility theory of value and the marginal productivity distribution theory, are used as the micro basis of Keynesian macroeconomics.

There are two main views on the micro-foundations of Keynesian macroeconomics:

That. 1. Samuelson has long proposed to use the micro theory of neoclassical economics, that is, the marginal utility theory of value and the marginal productivity distribution theory, as the micro basis of Keynesian macroeconomics, so it is called the "neoclassical synthesis school".

That. Second, the Keynesians, led by Carldo and Joan Robinson, believe that it is necessary to find the micro basis of macroeconomics from Ricardo's theory of value and distribution theory, to admit that value itself has an objective and material basis, and to admit that the issue of distribution cannot be examined in isolation from specific historical conditions and ownership factors.

Keynesian economics background:

Scientific theories in the context of the Great Depression.

From 1929 to 1933, the world experienced an unprecedentedly severe economic crisis. This great crisis has swept the countries of the world. After a four-year-long crisis, the whole world has fallen into a long-term special depression.

The West called the Great Crisis and the ensuing special depression the "Great Depression of the '30s."

2. Scientific theories that are compatible with state interventionism.

Before the First World War, state interventionism began to emerge. In the intervening years of the Great War, this state intervention developed rapidly and took on an extraordinary military character. New economics opposes laissez-faire and advocates state interventionism; It is pointed out that the "visible hand" plays an important role in ensuring the smooth operation of the economy, and does not simply emphasize the role of the "invisible hand" market mechanism.

The term marginal productivity was coined by the American economist Clark at the end of the 19th century and further used in his distributive analysis. It refers to the increase in output for each unit of factor input under the premise that other conditions remain unchanged, that is, marginal material products. The increase in output brought about by increasing a unit of factor input is called a marginal income product.

The marginal return product is equal to the product of the marginal material product and the marginal return of the factor, therefore, the marginal return product MRP of the variable factor depends on two factors:

1. The change of marginal material products brought about by the increase of one unit of factor input in the buried car.

2. The change in the increase in revenue by adding one unit of product.

In particular, the output of the last employed worker is called the marginal productivity of labor or the marginal yield of labor; The amount of production and auction noise generated by the last additional unit of capital is called the marginal productivity of capital or the marginal yield of capital.

Answer]: At the end of the 19th century, there was a famous "marginal revolution" in Western economics, and two economists, Jevons and Menger, put forward the theory of marginal utility at the same time, which became the main theoretical basis of modern Western economics. Based on the marginal theory, the famous American economist John Bates Clark first put forward the theory of marginal productivity wages.

To this day, this theory is still the most widely popular wage theory.

The marginal return product is equal to the product of the marginal material product and the marginal return of the factor, i.e., mrp=mp mr, therefore, the marginal return product mrp of the variable factor depends on two factors: the change in the marginal material product (mp) brought about by increasing one unit of factor input; The change in revenue (MR) added by adding one unit of product.

In particular, the output brought about by the last hired worker is called the marginal productivity of labor or the marginal yield of labor; The output brought about by the last additional unit of capital is called the marginal productivity of capital or the marginal yield of capital.

What practical inferences can be made on the basis of a simplistic theory of the distribution of marginal productive forces? The fierce criticism of orthodox economics seeks to convince that the trade union problem, the corporate power structure, the state of aggregate demand, the policies concerning income and, all these factors that seem to be related to the question of income distribution, have been pushed to "sociology" by neoneoclassical theory. This neo-neoclassical theory of rationale and profit is explained only in terms of technology, consumer preferences, and given factor supply.

This criticism should not be lightly dismissed, but it does contain some linguistic confusion.

As far as the theory of distribution is concerned, the criticism of the slippage can give rise to a theory of distributive shares, whereas in traditional economics the theory of income distribution is a theory of factor pricing: in fact, until Hicks' time, there was no universally accepted theory of the share of wages and profits in national income. It was only after Hicks that we had this theory, but its true meaning has often been misunderstood.

However, whether this theory is considered good or bad, it does not prevent people from believing that the "class struggle" is extremely useful in determining the distribution share, and even in the determination of wages and rates of profit.