From: Ian Wright (wrighti@ACM.ORG)
Date: Fri Oct 07 2005 - 12:56:25 EDT
Hi Ajit > ___________________ > But how cn it create any peoblem. The bean problem > arises because physically it takes 100 units of bean > to produce 110 units of beans, thus the sector cannot > physically generate a rate of profit higher than 10%. > Let us suppose thatt that was not the case. The bean > sector was using only 10 units of bean to produce 110 > units of bean but one one unit of horse that was > produced by using 90 units of beans. Will this create > any problem for the bean sector? Not at all. The bean > sector can have a normal rate of profits even if it > was 15%, in this case. The problem here is due to > physical surplus and not due to prices. Cheers ajit > sinha In terms of my previous example, the 1 unit of horse would be an indirect input to the beans sector. Then you have a problem. There is a reason why Kurz & Salvadori present this problem at the top of their list in their chapter on "limits" to the long-period method in their tome, "Theory of Production". No theory is complete, and we shouldn't expect it to be. I am unsure of Sraffa's positive intentions, but the formalism he developed, as it stands, is not a complete theory of prices of production, contrary to what may be the prevailing opinion. Remember that there can be arbitrary hierarchies of self-reproducing non-basic systems. "Beans" are just a special case, the mote in Sraffa' eye, which he first itched in his appendix. Best wishes, -Ian.
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