[OPE-L:7519] Re: RE: Re: Naples on gold

From: Fred B. Moseley (fmoseley@mtholyoke.edu)
Date: Fri Aug 16 2002 - 14:26:51 EDT

On Mon, 12 Aug 2002, mongiovg wrote:

> Hi. Two points on this:
> (1) Sraffa's model can accommodate rents.  

Gary, can Sraffa's theory explain absolute rent, i.e. rent on the least
productive land (or mines)?  It is my understanding that it cannot (just
like Ricardo's theory could not).  Sraffa (like Ricardo) assumes that the
least productive land pays no rent.  But this is clearly false
empirically.  Please correct me if I am wrong about Sraffas theory
inability to explain absolute rent.

> His chapter 11 is concerned with non-reproducible scarce resources. 

Chapter 11 on differential rent includes only agricultural commodities
(and actually only one agricultural commodity - corn); there are no
non-agriculturalcommodities.  The price of corn that is determined by the
equations appears to be an absolute price, because there are no other
commodities which could serve as the numeraire.  But absolute price is a
pure number, and thus not really a price at all (i.e. not an
exchange-ratio with money).  Also, the rate of profit appears to be taken
as given, not determined by the system of equations.  What is determined
by the equations are the different levels of differential rent.  

Gary, has anyone incorporated differential rent into Sraffa's theory in a
more general way, including both agricultural and non-agricultural
commodities, and including a numeraire and the determination of relative
prices, and including the simultaneous determination of both rent and the
rate of profit?

> Of course, Sraffa's treatment of rent is 
> different from both Marx's and Ricardo's, but as with his determination
of the 
> profit rate, I would argue that the differences stem mainly from the
fact that 
> Sraffa had more sophisticated tools at his disposal. The root question is 
> whether Sraffa, Marx and Ricardo are concerned with essentially the same 
> theoretical problems, at any rate in their discussions of value. In earlier 
> posts Fred has argued that M&R had much the same project and that Sraffa's 
> project was different from theirs. M&R were trying to articulate some very 
> complicated issues at a time when economic discourse did not have a unified 
> conceptual language. These difficulties have parallels in our own problems of 
> intertreting that earlier discourse.  I would argue that when Marx, in
> for a clarity he never achieved, expresses  himself in a particular way
that is 
> different from the way SRaffa or Ricardo poses a question, he may not in fact 
> be articulating a theoretical framework that is fundamentally different from 
> Sraffa's, but is instead trying to develop a language of discourse that was 
> not available at the time. That is to say, I think Fred is supposing that, 
> because Marx EXPRESSED himself in terms that are very different from those of 
> modern economics, he must have been TALKING  ABOUT something different
from the 
> issues we find in Sraffa.

Let's assume for the sake of discussion that Marx and Sraffa were
concerned with roughly the same theoretical questions, related to the
distribution of income.  But similar theoretical QUESTIONS is not the same
as similar theoretical FRAMEWORKS, and Gary seems to equate the
two.  Gary, what do you mean by "theoretical framework"?  I assume you
mean something like logical method; e.g. how the rate of profit is
determined, whether prior to prices of production or simultaneous with
prices of production.  

I argue that Marx's logical method of the prior determination of the rate
of profit is fundamentally different from Sraffas logical method of
simultaneous determination.  Marx was not trying to develop the method of
simultaneous determination; rather Marx was trying to develop the method
of the prior determination of the rate of profit. This prior determination
is the basic premise of the whole Volume 3 of Capital.  

It is not just a matter of Sraffa having "more sophisticated
tools" (e.g. matrix algebra) than Marx.  If Marx had known matrix algebra,
he would have rejected it, because it assumes that the rate of profit is
determined simultaneously with prices of production, rather than prior to
prices of production.  

> Whether the numeraire is produced by a sector that 
> earns the general normal profit rate is irrelevant to its ability to function 
> as a standard for expressing relative prices: y apples can be swapped for x 
> units of numeraire gold; 

Has the numeraire in Sraffas theory ever been assumed to be a scarce,
privately owned mineral that yields rent, like actual gold?  References
would be appreciated.

> why should gold-sector capitalists have to earn a 
> rate of return different from the normal competitive profit rate in order for 
> us to be able to put gold to this use in a Marxian context?

It is not a matter of gold capitalists having to earn a different rate of
profit in order to fit into Marx's theory.  Gold actually does earn a rent
in the real capitalist economy.  Rent on gold is not an artificial
requirement imposed by Marxs theory.  Rather, rent on gold is a crucial
empirical fact.  Marx's theory explains this important aspect of gold, and
Sraffas theory cannot.


This archive was generated by hypermail 2b30 : Sat Aug 24 2002 - 00:00:03 EDT