Re: [OPE-L] naive question on Sraffian model

From: ajit sinha (sinha_a99@YAHOO.COM)
Date: Fri Dec 03 2004 - 08:27:03 EST

There is no time and no causation in Sraffa's original
work. Sraffa does not have a "model". His propositions
are mathematical or logical in nature. What all
different variants of Sraffians have done with it, is
a different story altogether. Cheers, ajit sinha
--- Ian Wright <iwright@GMAIL.COM> wrote:

> Dear Riccardo, Anders etc.,
> Thanks for taking the time to respond to my
> question. I found a review
> essay in Review of Political Economy Vol 16 No 2:
> "Sraffian research
> programmes and unorthodox economics" by T.
> Aspromourgos. Quoting:
> "Two possible alternative `closures' of the
> distribution system -- via
> the accumulation rate or via the rate of interest --
> have also been
> systematically pursued, especially the former route.
> The essential
> basis of the former is that given the equilibrium
> equality between
> saving and investment, an equality can be postulated
> between the
> ratios of saving to the value of the capital stock,
> and investment to
> capital. If the latter ratio could be conceived of
> as an independently
> determined rate of accumulation, and the former
> decomposed into a
> distribution-weighted average of saving out of each
> functional income
> category, in a ratio to capital, then a causation
> from accumulation to
> distribution could be posited -- the 'Cambridge
> Growth Equation'
> causation. On the other hand, the essential insight
> of the interest
> closure approach is that given the equalization of
> interest rates and
> profit rates (net of compensation for differential
> asset
> characteristics such as illiquidity and risk), if
> profit rates are
> free to vary in equilibrium, at least within limits,
> and interest can
> be independently determined in money markets --
> including, in the
> latter determination, central bank behaviour
> (monetary policy) -- then
> a monetary determination of profit rates, and hence
> income
> distribution more widely, can be posited. The
> absence, so far, of a
> more considerable development of this latter
> programme is the most
> unfortunate omission from the Sraffian project as a
> whole -- although
> further development of it properly should not amount
> to another theory
> of profit rate determination, different from the
> Cambridge Growth
> Equation, but similarly mechanical and indifferent
> to the role of
> wider social forces. ... So long as only one degree
> of freedom is
> available for determining distribution, both of
> these approaches
> cannot be sound. ..."
> The Cabridge Growth Equation causation sounds very
> complicated! ...
> For what it's worth, the last sentence is another
> example of the
> fallacy of non-contradiction (positivist habit): it
> assumes that there
> cannot be multiple mechanisms that simultaneously
> function to attain
> contradictory ends (e.g., distribution). Anders, I
> think it is
> important to close the model and not leave
> distribution to unmodelled
> notions of class conflict, particularly as
> empirically it seems that
> distribution is pretty much constant, but it is
> technology that
> changes over time (which is the inverse of the
> Sraffian model that
> assumes fixed technology and investigates the effect
> of changing the
> distributional variables).
> -Ian.

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