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

From: ajit sinha (sinha_a99@YAHOO.COM)
Date: Wed Oct 05 2005 - 06:21:08 EDT

--- Allin Cottrell <cottrell@WFU.EDU> wrote:

> On Mon, 3 Oct 2005, Ian Wright wrote:
> > Before talking of "beans" again, I just want to
> reiterate that the
> > problem can arise with an arbitrary number of
> commodities, because
> > the difficulty arises from the existence of
> self-reproducing
> > non-basic systems, of which there are arbitrary
> hierarchies....
> OK, but let's consider the "beans" a little further.
> > Sraffa wants to investigate uniform prices and
> uniform profit
> > rates. He knows that beans cannot fulfill these
> conditions. So
> > Sraffa argues that a producer of beans can fulfill
> these
> > conditions if beans are sold at a higher output
> price than the
> > input price attributed to them as means of
> production "in his
> > book-keeping".
> My point is that if this is to make any sense, it
> has to mean that
> there's a continuous appreciation in the price of
> "beans."  That
> figures: by virtue of the technical structure of
> production a
> certain non-basic (or class of non-basics) cannot
> earn the average
> rate of profit, at constant prices; but they _can_
> achieve that rate
> if they are progressively appreciating relative to
> other
> commodities.
> Then my further point is that any commodity that is
> continuously
> appreciating relative to others is probably not long
> for this world.
> The demand will be choked off.
> Allin Cottrell

I think it is always dangerous to interpret Sraffa by
bringing in "adjustment mechanism". There could be
very profound methodological and epistemological
reasons why Sraffa does not consider "change". The
bean example only shows a logical case where it is
imposible to maintain equal prices and equal rate of
profits accross sectors. It also points to the fact
that Sraffa is following Adam Smith in maintaining
equal rate of profits as a mark up on costs for quoted
supply prices. In this case, the producers of beans
could still qoute a price by marking up the costs by
the normal rate of profit, by adjusting the price of
the beans on the cost side. Chers, ajit sinha

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