Re: [OPE-L] What is most important in Marx's theory?

From: Riccardo Bellofiore (riccardo.bellofiore@UNIBG.IT)
Date: Tue Mar 13 2007 - 13:31:39 EDT

At 10:49 -0800 12-03-2007, Ian Wright wrote:
>Hi Riccardo
>>However, likely all three would (rightly) strongly object to your
>>labelling his model as "half-equilibrium" system.
>The observation is Joan Robinson's. Sraffa's single production model
>is only half an equilibrium system because a nominal distribution of
>income is specified (your "given distributive rule") but the
>corresponding real distribution of income is not specified (i.e.
>precisely what consumption bundles are consumed). The system has a
>missing closure. This asymmetry has the purported advantage that the
>income distribution can be hypothetically considered as a nominal
>wage-profit trade-off, while avoiding introducing assumptions on
>returns to scale due to the change in the composition of demand.
>Alternatively, one could view it as bit of a mess.

The observation made me think at first to Frank Hahn.

>>It is a model of determination of (re)production prices, "after the
>>harvest", and before the market, allowing for the reproduction of the
>>inputs and respecting a given distribitutive rule.
>>With no hypothesis about returns.
>Yes, but you must admit this is an extremely artificial construction.

It is a snapshot.

>Again, it is half an equilibrium system because the surplus is
>undistributed: it has been produced, but not yet shipped from the
>factory gates. Who knows what will happen next?

It is simply the derivation of prices acccording to certain rules.

You ask: what happens next?

Two things: the point is that the scheme on this says NOTHING. And
the other point is: what happened BEFORE?

Now, you can make it the core of economic theory (a particular
position), with prices of production fixed in this way as permanent
centers of gravity; you may see them as providing the ideal
  determination of what would be the PP *if*, etc. You may make this
situation the result of valorization process determined by the
relationship btw banks and firms in an endogenous money system.

>The system is open. So Sraffa closes the price system with a
>distributive rule. That tells us (hypothetically) where the money

My problem really is that it does not explain, amongst other things,
from where money comes into the system.

>But the net product remains at the factory gates: it remains
>undistributed unless the net product is split with another
>distributive rule, namely the real distribution of income. Sraffa does
>not do this.

Yes, but I think that may be one can model a closure on the side of
real distribution of income.

>>We should also distinguishing static/dynamic (making formally
>>explicit time) and stationary, quantitative growth/evolutionary,
>>qualitative development.
>>Whatever the formal tools.
>It seems to me that Sraffa did attempt to say something about
>*changes* in the distribution of income with *simultaneous* equations.

Where? To my memory, very little, and mainly to be used as criticism
against Neoclassicals. But may be I am wrong here.

>>What do you mean by "novel event"?
>The production of a undistributed surplus. The event is novel because
>the surplus is not part of the cost structure of the current period.

Yes: it is a surplus.

>What happens to the surplus is not fully specified.

It does not have to, with HIS problem.

>So the novel event
>remains unfinished business: like Wiley Coyote who runs off the edge
>of a cliff. What happens next? Without causal laws, which are lacking
>in Sraffa, no-one can say.

Is this a limit of Sraffa? My problem may be iks the opposite, that I
do not like the usual ways in which his model is used.

His model is after the harvest and before (actual) market. *We* have
to construct a theory including what happens during and before the
harvest, and on the market. I am not so sure that it will contradict
the very few, but precise, statements by Sraffa in his own setting.


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