Mr Sraffa on Joint Production and Other Essays
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Mr Sraffa on Joint Production and Other Essays Bertram Schefold London UNWIN HYMAN BOSTON SYDNEY WELLINGTON © Bertram Schefold, 1989 Contents This book is copyright under the Berne Convention. No reproduction without permission. All rights reserved. Published by the Academic Division of Unwin Hyman Ltd 15/17 Broadwick Street, London W1V 1FP, UK Unwin Hyman Inc., 8 Winchester Place, Winchester, Mass. 01890, USA Preface vii Allen & Unwin (Australia) Ltd, 8 Napier Street, North Sydney, NSW 2060, Australia Part I Introduction 1 Allen & Unwin (New Zealand) Ltd in association with the Port Nicholson Press Ltd, 1 Sraffa’s First Critique 2 Compusales Building, 75 Ghuznee Street, Wellington, New Zealand 2 Ricardo and the Surplus Approach 4 First published in 1989 3 Single-Product Sraffa Systems: Labour Values 8 This edition published in the Taylor & Francis e-Library, 2005. 4 Single-Product Sraffa Systems: Prices 12 “To purchase your own copy of this or any of Taylor & Francis or Routledge’s 5 Single-Product Sraffa Systems: Movement of Relative Prices 15 collection of thousands of eBooks please go to www.eBookstore.tandf.co.uk.” 6 Single-Product Sraffa Systems: Basics and Non-Basics 20 British Library Cataloguing in Publication Data Schefold, Bertram 7 Single-Product Sraffa Systems: The Standard Commodity 23 Mr Sraffa on joint production and other 8 Single-Product Sraffa Systems: Reswitching 26 essays. 1. Joint production. Theories 9 Theory and History 28 I. Title 338.001 10 The Problem of Value with Joint Production in a Classical 33 Perspective ISBN 0-203-16872-0 Master e-book ISBN 11 The Fundamental Principle of the Determination of Prices with 39 Joint Production 12 The Main Questions to be Answered and the Limits of the Answers 44 ISBN 0-203-26398-7 (Adobe eReader Format) Given in this Book ISBN 0-04-338150-2 (Print Edition) 13 Summary of Results 49 Library of Congress Cataloging in Publication Data 14 Notation and how to Get Started with Joint Production 51 Schefold, Bertram, 1943– Mr. Sraffa on joint production and other essays/Bertram Schefold. Part II Mr Sraffa on Joint Production 53 p. cm. A General Joint Production Systems 54 Bibliography: p. Includes index. 1 The System 54 ISBN 0-04-338150-2 (alk. paper) 2 The Concept of a Basic System 63 1. Sraffa, Piero. Production of commodities by means of commodities. 2. Prices. 3. Production (Economic theory) 3 The Uniqueness of the Basic System 69 I. Title HB171.S34 1989 88–27733 4 Labour Values 81 338a.01— —dc 19 CIP 5 Distribution and the Standard Commodity 85 6 Expansions of the Price Vector 88 v vi 7 Peculiarities of Joint-Production Systems: Existence of the Standard 90 6 Some Thoughts on the Foundation of Value in Sraffa and his 341 Commodity Standard Commodity 8 All-productive and Related Systems 93 9 The Standard Commodity and the Possibility of Balanced Growth 96 Bibliography368 9a Residual Commodities and Dispensable Processes 99 Index376 9b Balanced Growth and Truncation106 9c Beyond the Golden Rule 121 10 Graphic Techniques Method130 11 Applications142 11a Diagrams for Section 9b149 B Specific Joint-Production Systems153 12 Definition of a Pure Fixed-Capital System153 13 The Centre of Fixed-Capital Systems160 14 Price Movements of Finished Goods168 15 The Value of Machines173 16 Efficiency and Age of Machines 180 17 Perennial and Obsolete Machines in Long-Period and Short-Period 182 Analysis 18 Fixed Capital, Switching of Techniques and the von Neumann Model188 18a Fixed Capital and Truncation if g<r 195 18b Fixed Capital and Joint Production in a Growing Economy200 19 ‘Extensive’ and ‘Intensive’ Diminishing Returns207 19a A Digression on International Trade220 19b A Digression on Exhaustible Resources227 20 Effects of the Presence of Land on the Basic System 241 20a Differential Rent, Absolute Rent and the Choice of Techniques244 20b Homogeneity and Heterogeneity of Capital, Land, and Labour255 Part Other Essays 266 III 1 Production Costs in Neoclassical Theory267 2 Ricardo284 3 Critique of Neoclassical Theory 291 4 Sraffa and Marx307 4a Sraffa and Marx: Some Reflections on the Homogeneity of Labour 321 5 Distribution, Prices and Competition331 viii about the matter, I have left them basically unchanged (except for essay 4a and Preface amendments to essay 6, added 1980) because I believe that they provide useful interpretations of Sraffa’s text, which looks extremely abstract at first. Part I is meant as a very brief introduction to the general problematic of Sraffa’s theory, which is discussed extensively in the separate essays in Part III. It also provides a succinct account of the theory of single-product Sraffa systems for those readers who are not familiar with PCMC and gives an outline of problems of joint production that are the topic of the main essay. Some sections of the Introduction may therefore simply be regarded as summaries of corresponding sections of Part III (as indicated in the section headings); other have been added to provide a broader outlook and the motivation to study joint production, which is a ubiquitous phenomenon and yet often unduly (sometimes systematically) neglected. I have also Interest in the application of the classical theory of prices, in its significance for the taken the liberty of referring to my later work in the areas concerned. critique of economic theory, and in the special aspect of joint production has The problem of the classical theory of prices with joint production has been taken developed slowly but steadily since Sraffa’s Production of Commodities by Means of up by several authors since 1971. The theory of fixed capital has been developed in Commodities (henceforth to be abbreviated as PCMC) was published in 1960. The core books by Bomel (1976) and van Schaik (1976). Both these issues were treated in of this book (Part II) consists of my PhD thesis ‘Mr Sraffa On Joint Production’, more general contexts by Abraham-Frois and Berrebi (1976) and Kurz (1977). which was written in 1969/70 when I was first a Visitor to the Faculty of Economics, Pasinetti (1977) provided a collection of essays. The formal structure of joint- then an Advanced Student at King’s College, Cambridge. At that time, almost production Sraffa systems has been further clarified in a number of articles (by nobody had written about the formal analysis of joint production, and the critique of Salvadori and others). This book is meant to lead from the most abstract and general neoclassical economic theory had only just begun in the form of the debate about the concepts of the theory of value to economic applications in the areas of the aggregate production function. Following advice—I still do not know whether it was measurement of capital, of growth, of international trade, of natural resources, etc. good or bad—I did not immediately attempt a thoroughgoing revision of the book. ‘Application’ here does not mean confrontation with statistical data but means the Instead, I circulated my thesis in English as a private print (with an introduction in use of derived concepts for an understanding of the real world in a way that is—at German) and set out to make the results available to a wider public by publishing two least in my interpretation—specific to classical theory. An example is the theory of or three articles about it. As it happened, Sraffa and joint production shortly the specialization of land that results from the payment of differential rent. While my thereafter came into fashion; copies of the thesis appeared in unexpected places, and interpretation of the relationship between Sraffa’s theory on the one hand and that of the articles (my own included) began to multiply. It became difficult to change the Ricardo or neoclassical economics on the other corresponds to views generally held subject of my researches. Indeed, the time to attempt a ‘final’ textbook has not yet by Cambridge economists (Essays 1–3 in part III), my views of the relationship come; the controversy about the revival of classical theory is far from being settled. I between Sraffa and Marx, of the usefulness of the classical theory of prices for the have therefore gladly accepted the offer to provide a second edition of this thesis, analysis of accumulation in the modern world and of the systematic foundation of the since the text is often demanded and not generally accessible. concept of value in Sraffa (essays 4–6 in Part III) are less orthodox and definitive. The formal derivations of the original thesis have therefore not been changed but I should like to express first my gratitude to the late Piero Sraffa himself. In many the book has been amended so as to make it easier to follow and to provide an conversations he helped me to better understand the structure, content and meaning economic interpretation of the mathematical results. References to important later of his theory—by means of his short, sharp, but never unfriendly criticisms of my developments and my articles mentioned above have been added. Moreover, lengthy explanations, by means of illustrations and anecdotes, but never by means of additional sections II.9a, 9b, 9c, 11a, 18a, 18b, 19a, 19b, 20a, 20b and a few formal arguments and without even once having recourse to a mathematical symbol. theorems and notes (which can be recognized by analogous denominations) have I am similarly indebted to the late Joan Robinson. Special thanks are due to been inserted. They were written in different phases in the years after 1971 during G.Bombach and L.Pasinetti who were the referees of my thesis, to J.Eatwell for which the manuscripts grew while I was, of course, often pursuing different work in encouragement and to C.Dziobek for a rough translation of the essays in Part III.