Hi. Two points on this: (1) Sraffa's model can accommodate rents. His chapter 11 is concerned with non-reproducible scarce resources. Of course, Sraffa's treatment of rent is different from both Marx's and Ricardo's, but as with his determination of the profit rate, I would argue that the differences stem mainly from the fact that Sraffa had more sophisticated tools at his disposal. The root question is whether Sraffa, Marx and Ricardo are concerned with essentially the same theoretical problems, at any rate in their discussions of value. In earlier posts Fred has argued that M&R had much the same project and that Sraffa's project was different from theirs. M&R were trying to articulate some very complicated issues at a time when economic discourse did not have a unified conceptual language. These difficulties have parallels in our own problems of intertreting that earlier discourse. I would argue that when Marx, in striving for a clarity he never achieved, expresses himself in a particular way that is different from the way SRaffa or Ricardo poses a question, he may not in fact be articulating a theoretical framework that is fundamentally different from Sraffa's, but is instead trying to develop a language of discourse that was not available at the time. That is to say, I think Fred is supposing that, because Marx EXPRESSED himself in terms that are very different from those of modern economics, he must have been TALKING ABOUT something different from the issues we find in Sraffa. (2) Differential profit rates are also compatible with Sraffa's framework: instead of multiplying the input matrix by a scalar uniform rate of return, one multiplies by a diagonal matrix in which the elements on the diagonal represent the sectoral profit rates. These can of course be equal except for the few sectors for which monopoly elements block intersectoral capital flows. I don't think Marx understood differential profit rates as analagous to rents (Gil might disagree about this), but, be that as it may, Fred's objection doesn't seem cogent to me. Whether the numeraire is produced by a sector that earns the general normal profit rate is irrelevant to its ability to function as a standard for expressing relative prices: y apples can be swapped for x units of numeraire gold; why should gold-sector capitalists have to earn a rate of return different from the normal competitive profit rate in order for us to be able to put gold to this use in a Marxian context? Ciao, Gary >===== Original Message From "Fred B. Moseley" <fmoseley@mtholyoke.edu> ===== >On Fri, 9 Aug 2002, Rakesh Bhandari wrote: > >> Michele Naples writes in her contribution to *Marx and Non >> Equilibrium Economics*, ed. Alan Freeman and Guglielmo Carchedi >> (1996): >> >> "Marx used 'value of money' and 'exchange value' of money >> interchangeably because to him, gold, was a non transformed >> value...As I have suggested elsewhere...Marx's language is consistent >> because gold is produced in mines. Thus *gold exchanges at its value* >> rather than price of production, since mineowners collect absolute >> rent. The neo Ricardian solution is wrong on gold because it >> abstracts from land, a crucial means of production in mining, and >> from landowners' rent. It treats gold as infinitely reproducible, >> like other commodities. But Marx made clear that the good which >> serves as commodity money must be scarce to serve as money. Just as >> Marx rejected Ricardo, he would reject the neo Ricardian model where >> the exchange value of money is determined in the same way as other >> commodities' price of production." p.103 > > >I think Rakesh and Michele are on the right track here. I think this >passage points to the fundamental theoretical reason why Gils "accounting >equation" for gold does not belong in Marx's theory of prices of >production. The money commodity, gold, is a scarce mineral, that is >privately owned in capitalism. Therefore, the exchange-value of gold with >other commodities MUST INCLUDE RENT for the owners of the gold mines, >including absolute rent on the least fertile gold mines. This component >of rent is missing entirely from the Sraffian concept of the >numeraire. Sraffa's theory assumes the numeraire is one of the >manufactured goods, with no rent. I had temporarily forgotten about this >important difference between Marx's theory and Sraffa's theory. Thanks to >Rakesh (and Michele) for reminding me. > >According to Marxs theory, presented in Part 6 of Volume 3, and especially >Chapter 45, the prices of minerals and of agricultural commodities are >DETERMINED DIFFERENTLY from the prices of manufactured goods. Minerals >and agricultural commodities are determined by their VALUES, not by their >prices of production. Marx assumed that mining and agricultural >industries have a lower than average composition of capital. Therefore, >the values of mining and agricultural commodities are greater than their >prices of production, and the surplus-value produced in these industries >is greater than the average rate of profit. However, because of their >monopoly over these scarce natural resources, the owners are able to block >the transformation of values into prices of production and secure the >extra surplus-value for themselves as absolute rent. In other words, >mining and agricultural industries DO NOT PARTICIPATE IN THE EQUALIZATION >OF PROFIT RATES with manufacturing industries. > >Therefore, the n Sraffian equations that we have been discussing do not >correctly represent Marxs theory. The prices of mining and agricultural >commodities, and the exchange-value of gold, are determined by their >values, independent of manufacturing industries and the average rate of >profit. Therefore, the system of equations expressing the determination >of prices of production and the equalization of the profit rate should not >include equations for mining and agricultural commodities, and in >particular should not include an equation for gold. > >Lets say there are (n-1) non-mining and non-agricultural industries. In >this case, there would be (n-1) equations in (n+1) unknowns the >(n-1) absolute prices, the wage rate and the rate of profit. As I have >discussed before, taking the wage rate as given in this system does not >uniquely determine the rate of profit. These (n-1) equations and the >wage rate are consistent with an infinite number of rates of profit, which >could be determined outside this system of equations, as in Marxs >theory. And, if the rate of profit is also taken as given, along with the >wage rate, then this system is not overdetermined, but rather determinant >of the (n-1) absolute prices. > >Thanks again to Rakesh for helping to clarify this crucial point. > > >I have a family trip for a couple of days, and will be off OPEL until the >end of the week. > >Comradely, >Fred
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