DMVP

Le DMVP est l'abréviation de la Discounted Marginal Value Productivity, un concept important de l'économie autrichienne.

Présentation de la value productivity

Texte tiré d'un article du Mises Institute

Value productivity is the ability to produce something valued by someone. Hence, as Mises says, "the concept of productivity is altogether subjective." And as Rothbard puts it : "The productivity of the private sector does not stem from the fact that people are rushing around doing "something," anything, with their resources; it consists in the fact that they are using these resources to satisfy the needs and desires of the consumers."

As a subjective concept, value productivity cannot be measured.

Marginal value productivity

Marginal value productivity (MVP) is the contribution of a factor unit to the production process. It is expressed in monetary terms (see Rothbard's discussion). Hence MVP is determined by two elements: First, it depends on the physical product produced by one unit of a factor (marginal physical productivity) and second, on the consumers' valuation of this product.

Marginal physical productivity (MPP) times the price of the product is MVP.

In the market process, the entrepreneur tries to estimate the MVP of the factor units by estimating both the MPP and the price of the product. He then contracts them accordingly. More importantly, he only contracts an additional factor unit to a price that he thinks the MVP of this unit will compensate him for. Since services of production factors are paid before the product is sold, the MVP will be discounted by the interest rate leading to the discounted marginal value productivity (DMVP).

When the product is produced and offered on the market, consumers may value it and pay a price for it. Then it will become apparent how good the estimation of the entrepreneur in relation to other entrepreneurs were. If the entrepreneur overestimates the MPP of the unit factor or the price of the product, bidding and contracting accordingly, he will suffer an entrepreneurial loss. In contrast, if he sees that the factors' prices are lower than their potential DMVPs, he would be able to use them in a production process of higher DMVPs by bidding for and hiring these factors. In this case the entrepreneur will receive an entrepreneurial profit.

The entrepreneurial process oriented by profit and loss leads to the result that each nonspecific factor in the free market tends to earn its discounted monetary contribution to the final product. For the factor of labor that means (according to Rothbard) "each man is paid what he is worth in producing for consumers."

How does that work exactly? Let us imagine that if entrepreneur E contracts one labor hour from worker W to produce P, the production of P (MPP) increases one unit and can be sold in one year for 100 monetary units (MVP). The interest rate is ten percent per year. E estimates therefore the DMVP of W as 90 monetary units (m.u.). What would happen if W would be paid 90 m.u. less, perhaps 50 m.u.? E would make respectable profits. He and other entrepreneurs would have an incentive to ask for more services from W in order to produce more P. Therefore W's wage would increase while at the same time the supply of P increases, driving the price of P down. This process tends to equalize W's wage with his DMVP. The process is the opposite if W receives a wage higher than his DMVP.

Hence, if the MVP of workers rises, their nominal wages increase as well. Real wages will increase even more. With a constant supply of money and a larger output, the prices of consumer goods will fall.

This looks different, of course, when there is an increase in the supply of money and a tendency toward rising prices. Then MVP itself is raised by the increase in consumer goods prices. If physical output increases at the same time there will be an increase in nominal wages higher than the increase of consumer goods' prices. This will result, as well, in real wage increases.

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