Re: (OPE-L) Re: Negative values in pure joint production

From: Philip Dunn (pscumnud@DIRCON.CO.UK)
Date: Tue Oct 26 2004 - 06:28:58 EDT

Hi Paul

At 13:16 25/10/2004 +0100, Paul wrote:
>-----Original Message-----
>The problem is important because negative values are bad news. It is
>challenging because the problem is impossible to solve in a physical
>quantities input output framework.
>Why is this a problem. We all know that negative values
>do exist in joint production, without them there would be no market for
>waste disposal firms.
>Capitalism can survive this provided that the negative
>value of the waste products is low enough relative
>to the main products.

In the physical quantities framework waste does appear to be output,
possibly with a negative price if the producer has to pay to get it taken
away.  The Great Circular Flow of Torrens, Malthus, Ricardo, Marx and
Sraffa treats  everything present at the start of a production period as
input and everything present at the end, just before sales, as
output.  There is no real separation of stocks and flows.  The gross
product includes waste, unused stocks, old machines, partially completed
products etc as well as what gets sold.

The alternative is to define the gross product as the flow of commodities
actually sold.  From this perspective waste is not a negatively priced
output but a positive input cost.  The firm pays for waste disposal
services.  That this cost is incurred after production does not matter.  It
just means that the value of the waste disposal service is transferred to
the product before the service is paid for, generating a negative stock.


This archive was generated by hypermail 2.1.5 : Wed Oct 27 2004 - 00:00:01 EDT