From: Paul Cockshott (wpc@DCS.GLA.AC.UK)
Date: Wed Sep 28 2005 - 17:55:35 EDT
At the Maximum rate of profits in the Sraffian system, workers "live on air". Yes. Sraffa assumes that all the wage is considered variable and a share of the "surplus". He rejects the option that the part of the real wage necessary for subsistence is already represented in the technical coefficients matrix, and considered means of production. Although that can be done, as Paul has suggested. He does not 'reject the option', but sets it aside for simplicity of argument having first accepted that on grounds of realism one should include the real wage necessary for subsistence in the technical coefficient matrix. You have to bear in mind that the key point of Sraffa's book is to formulate a critique of neoclassical equilibrium theory. Read its title. I regard the attempt by Steedman and others to interpret Sraffa as a positive alternative theory of prices as being mistaken, because to do so relies upon the key assumption of an equal rate of profit which we know to be false in reality. Whilst it was valid to make that assumption in an internal critique of equilibrium theory, it is not valid as an assumption about the real world. However, that does not mean that the ideas of the basic sector and the standard system are without merit. It is an open question whether the actual mean rate of profit will be determined in the basic sector. I suspect that it will, but one would have to back this up by a) empirical studies using i/o tables b) simulation studies that allowed for dispersions of the profit rate between industries in a realistic way Beyond this I think the idea of the basic sector has obvious applications to the theory of the socialist planned economy, and to the theory of productive and unproductive labour. On the former, I suspect that the economic model that Sraffa presents may in fact represent the impact on Cambridge economists of the 30s on seeing the first GOSPLAN planning tables. I gather from some references by Keynes that these were going the rounds. The structure of Sraffa's model is that of a planned economy, and the notions of the basic sector and its rate of profit are obviously related to similar results by von Neumann and Koopman. See also the work of Samuelson and Weizacker, where they explicitly use a similar model to theorise socialist allocation. I think it interesting that the sectors of the US economy whose price structure corresponded most closely to that predicted in the Sraffian model were the regulated utilities.
This archive was generated by hypermail 2.1.5 : Thu Sep 29 2005 - 00:00:03 EDT