On a Dynamic Non‐Substitution Theorem and Other Issues in Burgstaller's Property and Prices

Burgstaller's Property and Prices (Burgstaller (1994)) is a short book whose main aim is to provide a framework for unifying different strands of classical and neoclassical theories of value. The main thesis in the book is that a common Hamiltonian or quasi-Hamiltonian structure emerges in very different price theories when the `stock market' is taken into account. This Hamiltonian structure results from the operation of a smooth arbitrage process in the asset markets that grants the instantaneous equality of the expected rates of returns on different assets. According to Burgstaller, classical economists, with their emphasis on the uniform rate of pro®t, came close to a full understanding of the implications of the asset arbitrage principle. If they failed, it was because they did not extend this principle to all forms of wealth-holding (Ricardo's rent theory, for example, covers the pricing of land productive services but not the pricing of land itself). In a sense, this left too much room for a disproportionate development of the role of ̄ow markets. Neoclassical theorists, in fact, moved away from the capital-theoretic perspective implicit in the classical theory of value and attempted to reduce the pricing problem within a system in which only ̄ow equilibrium matters. The signs of this shift are visible both in Walras's capital theory and in modern general equilibrium models. On the one hand, Walras's `unexamined prior commitment to pure exchangeÐthus, ̄ow