Re: [OPE-L] basics vs. non-basics

From: Paul Cockshott (wpc@DCS.GLA.AC.UK)
Date: Wed Sep 28 2005 - 11:37:44 EDT


Dear Ian, Rakesh, Paul C. and Jerry:

I have been travelling, therefore I have had to postpone my answer:

The only point I want to make is this: In a real economy, not one where
there is proportional growth in every branch (like the one implied in
Mole-Sraffian notion), we have only one way to know which has been the
of growth of the economy in physical terms. We have to use labour and
measure its quantities in a physical unit: hours, etc. The other
way is starting from money quantities and deflacting them, but this is
not a
"real" mesure. So, when we speak of a physical surplus for an economy
economy) as a whole we have to be conscious that there can be no other
physical measure that quantities of time (of labour) unless we renounce
know if this economy is growing or decreasing, etc.

Marx once wrote about Adam Smith being too Scottisch. I would say that
who can conceive of an aggregate physical surplus in terms others than
labour-Time are too Scottisch as well.
I can not deny that I am Scottish, but I would deny that one can
be too Scottish.
But more seriously:

Do you require a fully balanced economy on a von-Neumann growth
path for the notion of a standard system to be relevant.

No. Consider the following economy with a surplus
but which is not balanced.

Table 1

        iron    corn    labour  output          surplus

iron    440     1100    110     825             185
corn    100     500     50      2250            550
silk    100     100     20      1000            1000
totals  640     1700    180             	

Sraffa wrote that every economy contains a
standard system, which can be discovered by :
1. Discarding all non-basic industries.

2. Scaling back those basic industries whose share of the
   output mix is excessive compared to their share
   of the input mix.

Table 2 shows the result of applying this
rule to the economy in table 1.
We have first discarded the silk industry as non basic.
Then, observing that the ratio of iron to corn in the output
was 825/2250 = 11/30 but the ratio of  iron to corn in the input of 
the basic sector was 540/1600 = 11/32<11/30,
we scale back the iron industry  until the iron/corn ratios are equal
in both the input and the output at 1/3 giving the Standard
System shown in Table 2.

Table 2
        iron    corn    labour  output  R	
iron    400     1000    100     750     0.5	
corn    100     500     50      2250    	
totals  500     1500    150	

Note that the iron/corn
ratios in both input and output are 1/3, and the the ratio of 
the total output to the total input is 3/2. This gives an
expansion rate R of 0.5 or profit rate of 50%.

----- Original Message -----
From: "Paul Cockshott" <wpc@DCS.GLA.AC.UK>
Sent: Wednesday, September 21, 2005 10:20 AM
Subject: Re: [OPE-L] basics vs. non-basics

> Diego Guerrero wrote:
>> Is not R in Sraffa's theory the maximun rate of profit? If so, it is
>> ratio or quotient between two "things" that must have some (physical)
>> dimension. For instance, in Marxian theory, the rates of profit and
>> surplus value are also quotients. They have no dimension but are the
>> ratios of quantities of labour or money (measured in hours or euros).
>> So, the rate of profit is an (maximum) eigenvalue as well, but this
>> number is the quotient of two units that are in fact the same
>> But again: which is the physical unit of the standard commodity? It
>> have one and I cannot conceive of nothing different from labour.
>> Diego
> Fair point about R being a ratio. The things of which it is a ratio
> are vectors of commodities. I dont have any difficulty thinking of
> Many ordinary commodities are themselves vectors of their components.
> Consider NKP fertilizer used on farms, this is a simple mixture of
> nitrate,
> potassium salts and phosphates. Despite being a mixture it
> has physical bulk and can be quantified.
> Sraffa's abstraction is essentially similar to the chemists notion
> of a Mole, a gram of a compound specified in fixed proportions
> corresponding
> to the molecular structure.

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