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

From: Ian Wright (wrighti@ACM.ORG)
Date: Fri Oct 07 2005 - 12:56:25 EDT

Hi Ajit

> ___________________
> But how cn it create any peoblem. The bean problem
> arises because physically it takes 100 units of bean
> to produce 110 units of beans, thus the sector cannot
> physically generate a rate of profit higher than 10%.
> Let us suppose thatt that was not the case. The bean
> sector was using only 10 units of bean to produce 110
> units of bean but one one unit of horse that was
> produced by using 90 units of beans. Will this create
> any problem for the bean sector? Not at all. The bean
> sector can have a normal rate of profits even if it
> was 15%, in this case. The problem here is due to
> physical surplus and not due to prices. Cheers ajit
> sinha

In terms of my previous example, the 1 unit of horse would be an
indirect input to the beans sector. Then you have a problem.

There is a reason why Kurz & Salvadori present this problem at the top
of their list in their chapter on "limits" to the long-period method
in their tome, "Theory of Production".

No theory is complete, and we shouldn't expect it to be. I am unsure
of Sraffa's positive intentions, but the formalism he developed, as it
stands, is not a complete theory of prices of production, contrary to
what may be the prevailing opinion.

Remember that there can be arbitrary hierarchies of self-reproducing
non-basic systems. "Beans" are just a special case, the mote in
Sraffa' eye, which he first itched in his appendix.

Best wishes,


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