Paul Cockshott wrote: > These are valid points, and there was an extensive debate on > this in the 60s under the rubric of reverse re-switching, where > Sraffians showed that under certain conditions the optimal > technology to chose depended upon prices determined by > the rate of profit rather than soley upon labour contents and > physical productivity. However for this to occur rather special > conditions are required of the input/output matrix. A relevant > question is whether such conditions are in practice met by > real economies. The work of Shaik and his collaborators indicates > very strongly that this is not the case, that reverse re-switching > does not occur in real economies. > > Shaik's work indicates that choices of technology based on > market prices and choices based on embodied labour would > be essentially the same. _________________________ Paul, I guess you mean reverse capital deepening and reswitching. In anycase, Sraffa's and the Srrafians' arguments are of logical nature and not of empirical nature. The neoclassical argument that a rise in the rate of interest would lead to a shift from a relatively 'capital intensive' to 'labor intensive' technology is not derived through some sort of inductive logic, rather it is a logical *deduction* from their basic propositions about marginal productivity etc. No amount of supportive empirical observations can correct a flawed logical deduction. Furthermore, my suspicion is that no empirical observations are made in such a way that they are faithful to the Sraffian theoretical position. I have not followed this literature because, in my opinion, this was one of the red herring that neoclassicals threw out against the Sraffian attack. Cheers, ajit sinha
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