From: Paul Cockshott (wpc@DCS.GLA.AC.UK)
Date: Tue Sep 20 2005 - 05:52:22 EDT
I have seen neo-classical ecnomists using this argument which may be right. What seems to me to be interesting is the ambiguity of the definitions of productivity and the attempts to compute the marginal efficiency of computer capital using a Cobb-Douglas function. This model differs from Sraffa's in that it is non-linear and causality operates in the reverse direction. Sraffa says that production of 1 ton of iron uses up 0.4 ton of iron and 6 qrtr wheat. The neo-classical model says that if we put in quantities K_1, K_2,L of inputs, then we will produce Y of output. Perhaps most significantly, the Sraffian model measures all inputs and outputs in physical terms whereas the neo-classical model measures them in money terms. From the Sraffian point of view the measurement of capital in money is a serious flaw since the valuation of commodities depends upon the distribution of income between labour and capital. One can thus not hope to measure the productivity of aggregations of capital goods since the valuation of these aggregations is itself a function of the class distribution of income. From a classical standpoint the notion of productivity measured in money terms was ill-defined. The only context in which one could define productivity was as the inverse of labour values, an increase in productivity was then equivalent to a fall in the labour required to make goods. Sraffa added to this concept the idea of the productivity of the basic sector measured in terms of its own inputs. One could in principle measure R for different years and see if it has gone up after the introduction of computer technology. Since there were many other technical changes at the same time, it would be hard to say whether such an increase in R might have stemmed from computer technology or from other innovations. Beyond this point though, the concept of the basic sector may provide another reason why productivity gains due to computers are so hard to discover. Since computers are largely used in non-basic sectors, Sraffian theory predicts that they will leave R unchanged. Of course investingation R is not the same thing as investigating productivity in a neo-classical sense, but it is the nearest analogue. -----Original Message----- From: OPE-L [mailto:OPE-L@SUS.CSUCHICO.EDU] On Behalf Of Michael Perelman Sent: 19 September 2005 18:19 To: OPE-L@SUS.CSUCHICO.EDU Subject: Re: [OPE-L] Sraffa and the productivity paradox Paul David uses the example of electricity to make the case that the productivity boost comes with a lag. On Mon, Sep 19, 2005 at 12:32:45PM -0400, Gerald_A_Levy@MSN.COM wrote: > > The productivity paradox that I refer to is the observation > > made by Solow, and Roach that computers do not seem to > > have made a significant measurable contribution to productivity. > <snip, JL> > > Hi, Paul C: > > This is an interesting issue, but one that is hard to address > abstractly. Putting aside the issue of how productivity is problematically > measured in standard theory, the answer to the "productivity paradox" > might not be found at the aggregate level. If one were, however, > to consider why productivity might not have increased in > individual branches of production and sectors after the > introduction of specific computer technologies, then one might > come up with a number of explanations. E.g. the reason that > productivity (as conventionally measured) hasn't increased by the > amount anticipated after computers were widely diffused as > means of production in offices is quite different from the reasons > why productivity hasn't been increased in many cases following > the adoption of industrial robotics in assembly-based forms of > manufacture. Thus, while this might seem to be a 'macro' issue, > the answers might be found only on the 'micro' level. > > In solidarity, Jerry -- Michael Perelman Economics Department California State University Chico, CA 95929 Tel. 530-898-5321 E-Mail michael at ecst.csuchico.edu
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