[OPE-L:7663] Re: Re: Gold & prices of production--Postscript

From: Fred B. Moseley (fmoseley@mtholyoke.edu)
Date: Sat Sep 14 2002 - 15:58:12 EDT

On Fri, 13 Sep 2002, Gil Skillman wrote:

> Now, following your representation, let's add a component of absolute rent 
> A. Now, since a unit of gold produced is still a unit of gold produced 
> whether or not rent exists, we have to ask where this rent comes from, and 
> thus where it shows up in the accounting equation.  There are only two 
> possible choices:  *either* the existence of rent reflects the exercise of 
> monopsony power of gold producers against suppliers of constant or variable 
> capital inputs, reflected in artificial depression of the wage rate or 
> constant capital commodity prices and thus a reduction in constant or 
> variable capital outlays and thus an augmentation of r to incorporate A, 
> *or* the rent reflects a payment for an additional input--"land," say, or 
> more specifically, "land which contains gold mines."

I think the usual Sraffian treatment (e.g. Sraffa, Kurz) is your second
option - to assume that rent is a payment to the additional input of land.

> Before closing, let me fast-forward to your last question:
>  >It seems odd to add this demand equation to a Sraffian system of
>  >simultaneous cost of production equations. I wonder why the Sraffians
>  >themselves do not add such an equation, and instead assume that absolute
>  >rent = 0. Gary, can you help us out here?
> Point taken: it *is* odd, sort of like mixing neoclassical and Sraffian 
> considerations in one model.  To me this is the most natural way to 
> proceed, but in fact, there *is* a distinctly Sraffian approach to absolute 
> rent (and thus, Sraffians do not necessarily assume "that absolute rent = 
> 0") using a model of multiple techniques (see, e.g., Lynn Mainwaring, 
> _Value and Distribution in Capitalist Economies_, Ch. 12 Section 4).
> But as it turns out, treating absolute rent in strictly Sraffian terms does 
> not at all alter my conclusion, since that approach involves replacing a 
> *single* price of production (or, in the present context, accounting) 
> equation with *two* equations (see equations 12.6 and 12.7 in Mainwaring), 
> so it remains the case that the addition of a variable, rent, is matched by 
> the addition of an equation, leaving my conclusion regarding inconsistency 
> intact.

I went to the library to look for this book.  It was listed in the
computer as available, but I couldn't find it on the shelves.  A librarian
told me that this 1984 book has never been checked out (a depressing
thought), but apparently cannot be located.  So would you please tell me
what Mainwaring's two equations are and a few sentences about their
motivation?  Thanks.

And of course I am looking forward to your own equation.


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