[OPE-L:5618] Re: Re: Re: Re: explanatory power and need for price theory

From: Paul Cockshott (paul@cockshott.com)
Date: Fri May 18 2001 - 04:38:42 EDT

On Thu, 17 May 2001, you wrote:
> _________________________
> Paul, I guess you mean reverse capital deepening and reswitching. 
> In anycase,
> Sraffa's and the Srrafians' arguments are of logical nature and not of empirical
> nature. The neoclassical argument that a rise in the rate of interest would lead
> to a shift from a relatively 'capital intensive' to 'labor intensive' technology
> is not derived through some sort of inductive logic, rather it is a logical
> *deduction* from their basic propositions about marginal productivity etc. No
> amount of supportive empirical observations can correct a flawed logical
> deduction. 
I certainly dont want to defend neo-classical theory here. I agree with
you vis a vis the neoclassicals that Sraffa's theory is logically correct.

>Furthermore, my suspicion is that no empirical observations are made in
> such a way that they are faithful to the Sraffian theoretical position. I have not
> followed this literature because, in my opinion, this was one of the red herring
> that neoclassicals threw out against the Sraffian attack.  Cheers, ajit sinha

I assure you that Shaik is not defending the neo-classical position. If anything
he is defending a fairly conventional interpretation of  Ricardo and Marx
against the criticisms of Steadman.

Whilst the possibility of reverse reswitching is logically correct given
the assumptions about equal returns to capital in different branches,
it is still a matter of interest to determine whether it actually occurs.

What I was concerned with in my post was to try and give some
concrete content to Nickys statement about the technological
conditions being determined by price conditions. In the absence
of reverse reswitching the selection of technology that one would
predict from LVT and from prices of production are the same, so
that a dependence of technology ( as a determinant of labour
content ) on prices, does not hold as an objection to LTV.

Paul Cockshott, University of Glasgow, Glasgow, Scotland
0141 330 3125  mobile:07946 476966

This archive was generated by hypermail 2b30 : Sat Jun 02 2001 - 00:00:08 EDT