# [OPE-L:4850] Re: Sraffa's Non-Proof

john ernst (ernst@pipeline.com)
Wed, 23 Apr 1997 10:13:14 -0700 (PDT)

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Ajit,

OK. When do we get to money? That is, a set of relative
prices and rate of profit without any mention of money seems
strange although perhaps necessary to Sraffa's manner of
proceeding. Must money be produced as a commodity for the
Sraffa system to allow its presence?

In the 2-commodity world you and Andrew are discussing, it
would seem possible to assign "\$" prices in one period such
that the unit prices of each commodity do not change as
inputs become outputs. Given production in a subsequent
period, Andrew's point would seem valid. If not, again,
we have to ask how are we to deal with "real" prices
as opposed to mere relative prices in a Sraffa system.

John

At 03:37 AM 4/23/97 -0700, you wrote:
>At 02:18 AM 4/22/97 -0700, Andrew Kliman wrote:
>
>>Ajit's claims are false.
>>
>>
>>Sraffa's physical data are
>>
>>280qr. wheat + 12 t. iron --> 575 qr. wheat
>>120qr. wheat + 8 t. iron --> 20 t. iron
>>
>>Imagine that, at the time of input, the money price of iron is \$15/ton and
the
>>money price of wheat is \$1/quarter. Thus, each ton of iron at that time is
>>exchangeable for 15 quarters of wheat. Imagine also that, at the time of
>>output, the money price of iron is \$14.85/ton and the money price of wheat is
>>\$0.99/quarter. Thus, each ton of iron is again (still) exchangeable for 15
>>quarters of wheat.
>>
>>Given these input and output prices, along with the physical data, the
rate of
>>return on capital advanced will be 23.75% < 25%, in both sectors. The prices
>>have fallen by 1%, and the profit rate is 5 0.000000e+00ss than Sraffa's.
>______________________
>
>Where the hell does the \$ come from? Drops from heven? What is dollar here?
>Is it gold? Then where is the production condition for gold here? In the two
>commodity world, there can be only one price, which is 15:1 in this case.
>Either of the two commodities could be picked up as the money commodity. No
>place for something undefined called \$ here.
>
>Let me tell you a story: Austin Robinson reported that once Sraffa came to
>him and tried to convience him for a case of incerting a comma in a
>Ricardo's faded manuscript. When Robinson got convienced, then Sraffa argued
>equally conviencingly about the case for its omission. Then Robinson
>suggested why not decide the matter with a spin of a coin. At which,
>according to Robinson, Sraffa was "profoundly shocked". This is too careful
>a scholar you are dealing here with Andrew. There is a very very very remote
>chance that he would make silly mistakes of the kind you are trying to
>attribute to him, specially on p. 7 of a little book which took 30 years to
>write. If you wanna find some mistakes in Sraffa, I would suggest go a bit
>more deeper in the book. Cheers, ajit sinha
>
>