What is the Problem with Neoclassical Price Theory?

Research output: Contribution to journalArticlepeer-review


"The article seeks to focus attention on Neoclassical price theory, as one of the two
problematic foundations of modern mainstream economics—the other being the theory of
distribution. After outlining what is understood to be Neoclassical price theory and noting the
various criticisms which it has been subject to from both within and without the school, the
article proceeds to argue that its major flaws need to be understood as stemming from how it
conceives of the formation of prices in the first instance. Specifically, the article argues that the
basic problem with the Neoclassical theory of price is that it abstracts from both production and
money in the first instance, such that when these are eventually brought back into the explanation
of price it is done so in an inessential manner; one where production and money have no bearing
on the findings of the analysis of price which excluded them."
Original languageEnglish
Pages (from-to)457-477
Number of pages21
JournalWorld Review of Political Economy
Issue number4
Publication statusPublished - 2012


  • price
  • relative price
  • money
  • equilibrium


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