OPE-L Preobrazhensky's multiplier

From: Rakesh Bhandari (rakeshb@STANFORD.EDU)
Date: Fri Oct 17 2003 - 13:46:51 EDT

>Rakesh Bhandari wrote:
>>Preobrazhensky discovered what Keynesians would later refer to as the
>>'foreign trade multiplier,' or the notion that a small increase in
>>exports might generate
>>a multiple expansion of domestic sales or forestall a multiple contraction."
>He may have done so, but it is far from clear that he fully understood it from
>that statement.
>Nature this week reports that Hutton had formulated natural selection
>before Darwin, but Huttons formulation lacked the generality and centrality
>of Darwins. This earlier suggestions of discoveries are interesting, but
>dont undermine the importance of those who devote the attention to
>clearly and explicitly bringing the idea to the light of day.

I can't remember--was Hutton  a geologist (or was that Lyell?) Was
the kind of change that he explained on the basis of a quasi
principle of natural selection similar to the kind of change that
Darwin theorized?
At any rate, it does not seem that Preobrazhensky had a
quantitatively worked out theory of the multiplier as did Kahn, but
in his review of this book, James Galbraith did argue (if I remember
correctly) that Preobrazhensky seemed to have anticipated many
important ideas, e.g. imperfect competition.
I think the idea of a foreign trade multiplier is a bit static in the
sense that the real importance of widening the market is not as a
vent for a pre-existing surplus but in the dynamic economies of scale
which it allows and thus the boost to profitability which it
provides. Foreign trade is important not so much for the purpose of
securing realization and ensuring a higher employment equilibrium but
for boosting profitability.

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