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Kiyoshi Kojima on International Equilibrium: A Unification of Ricardo’s Value Theory and Keynes’s Theory of Efficiency Wages

Tabuchi Taichi, Doshisha University

This paper gives a reappraisal of the theory of international equilibrium presented by Kiyoshi Kojima (1920-2010), focusing especially on Ricardo’s value theory and Keynes’s theory of efficiency wages. Recent studies showed that, contrary to the standard interpretation since J. S. Mill’s arguments, Ricardo’s value theory in his Principles can be understood exclusively as the cost-of-production theory of value, which integrates the domestic value theory and international value theory, requisitely taking into consideration changes in the value of money when it is applied to the analysis of international exchange. However, it is notable that, as early as in the 1950s, Kojima not only argued these points clearly, but raised a theory of international equilibrium, unifying Ricardo’s cost-of-production theory of value and Keynes’s theory of efficiency wages, based on the framework of general equilibrium theory. The structure of this paper is as follows: First, we track how Kojima dismissed the Mill-Marshallian analysis of reciprocal curves and how he rediscovered Ricardo’s theory of international equilibrium based on the concept of natural price, which distinguishes between adjustments in individual transactions and over-all adjustments in national economy as a whole. Then, we show that Kojima’s analysis of the factoral terms of trade, which, according to him, is the fundamental element in the over-all mechanism of international equilibrium, was closely related to Keynes’s theory of efficiency wages. The paper will, thus, provide a critical review of Kojima’s approach to international equilibrium from today’s perspective.


Keywords: international equilibrium, cost-of-production theory of value, efficiency wages, Ricardo, Keynes, Mill

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