Measuring the Wealth of Nations: The Political Economy of National Accounts Book

I was recommended this book by a friend, and the best I can say is that Profs. Shaikh and Tonak make some interesting points about how the national accounts and gross national product had been devised, specifically why it shouldn't treat certain activities as output producing (e.g. financial services, ground rent, certain parts of government expenditure like administration and defense spending) and instead as a form of social consumption, thereby getting perhaps a clearly picture of available national savings and real investment. Others in the mainstream neoclassical tradition have put forth similar arguments (see: Kelvin J. Lancaster), but Shaikh's and Tomak's come at it from a classical political economic perspective a la Ricardo and Marx.

Where I get lost, however, is when they delve into the nebulous realm of Marxian economics - labor values, money values, surplus value, the whole transformation problem, etc. To be frank, I think it undermines their whole argument by spending so much time trying to use this novel perspective to try and solve problems most economists had largley moved on from for good reason, including many Marxists from Joan Robinson to John Roemer.

Much of the analytical structure the authors make rests on one critical assumption that allows them to solve the Marxian transformation problem through national input-output tables, and they are clear about it: labor values and producer prices are proportional by some assumed constant. This is a rather bold hypothesis, and without it, sadly, the problem devolves back into the same one Marx had in Capital Vol. III of how 'labor values' map into market prices that is one-to-one (in other words, from a given set of prices, there is an inverse mapping from prices to labor values to allow value-based calculations).

Overall, this book is a good thought provoker for macroeconomists if one just reads the introduction and conclusion, and skip most of the body. For most of everyone else, you probably will find it to be a long and pointless read.