Re: [OPE-L] standard commodity

From: Ian Wright (iwright@GMAIL.COM)
Date: Sat Mar 12 2005 - 22:37:29 EST

Hi Ajit

Thanks for the reply and clarification.

> But our purpose is different, so we
> don't need to do that. Keeping wages as real and
> treating it as part of total capital expenditure does
> not change the basic property of Sraffian prices.

OK. I'd like to try to say something more relevant about your paper
when I get the chance, particularly as I think I agree with you that
the Sraffian system can only consistently be given an atemporal
interpretation, but I have got stuck on this distinction between
basics and non-basics. Any help much appreciated.

> Dear Ian, Take a look at Sraffa's equations on page 6.
> Of course, later Sraffa moves away from the classical
> tradition and considers wages a post factum because he
> wants to analyse the changes in prices due to changes
> in distribution.

Ok, but the point I am trying to articulate is that Sraffa analyses
changes in prices due to changes in the *income* distribution
(measured as a scalar in units of the numeraire), but not in terms of
the physical distribution of the goods that constitute the net
product. This modelling choice disconnects the price of shares of the
net product from the physical composition of the shares of the net
product. The former enters as scalar, nominal costs in production (as
wages and profits), whereas the latter does not appear as a physical
cost at all (as it would, say, in a closed Leontief model), and is
considered a "surplus" output. I do not (yet) see a justification for
treating income distribution and physical distribution in this
asymmetrical manner. The Sraffian net product is a ghostly thing
within the cost structure: it is a price without a physical body. If
nominal and real distribution are treated symmetrically, then the
distinction between basics and non-basics goes.

Best wishes,

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