"Marx was a pioneer in the study of principal-agent relationships, though of course he did not use the term. Principal-agent models now form the microeconomic foundation for the study of relationships among classes (though economists do not use that term) in capitalist and other economies, for example the standard treatments of the exchanges between employer and employee, or between lender and borrower. These models are essential to current analysis of workaday economic problems such as the cyclical patterns in wage-setting and productivity, and the quantity constraints that borrowers face in credit markets. Both of these problems have substantial microeconomic importance, but are also important foundations of macroeconomics. Marx was a visionary precursor of modern microeconomics, and modern microeconomics has repaid him the favour by clarifying the limits of some of his most important ideas. Among them the labour theory of value as a representation of a general system of exchange (Morishima 1973, 1974), and his “theory of the tendency of the profit rate to fall” (Bowles 1981, Okishio 1961). As Michio Morishima (1974) pointed out, Marx did not resolve the outstanding theoretical problems of his day, but rather anticipated problems that would later be addressed mathematically. Modern public economics, mechanism design and public choice theory has also challenged the notion – common among many latter-day Marxists, though not originating with Marx himself – that economic governance without private property and markets could be a viable system of economic governance."