From: Anders Ekeland (anders.ekeland@ONLINE.NO)
Date: Tue Jun 27 2006 - 02:41:21 EDT
I think the starting point has to be the fundamental difference between a static model (Sraffa) and a dynamic one (Marx). Only in a dynamic model (time/change is explicit) does "operating at loss" have a meaning, or making investments that never pays back, that in some cases does not even produce a product/service (like dot.com bubbles), not only not "operating at a loss", but never getting into operation at all. But as soon as you allow for technological change, each commodity will be produced with radically different technologies, that is, the labour time contained in a shoe might be radically different, the most efficient producers earning a technological ground rent... and demand will determine the average labour content. On this point Rosdolsky's discussion on use-value in Marx' is very good. I would argue that static equilibrium (price taking behavior) is incentive *in*compatible with profit maximization. To innovate, to reduce the cost for satisfying demand for a certain type of use value - and create new needs, demand for unknown products will always be an option for a profit maximizer in order to compete himself out (temporarily) of competition. As I have written before, no result, "insight", from a static model should be accepted before it is proven in the framework of a dynamic model of capitalist competition, with endogenous price setting and technological change. If it is at all useful - or interesting - to study the characteristics of perfect stagnation models like Sraffa's and the Arrow-Debreu GE-model I am not quite sure. These results tell us very little about the IMHO politically interesting aspects of capitalism. That the neo-classical GE-model, the static Bortkiewicz model has enormous *ideological* importance is of course the major reason why one have to know these models. But the starting point for radical economists must be that these are ideologies, the religion of our times, not scientific theories. I do not think one would learn much useful - in a positive sense from comparing the Sraffian and Marxian surplus, besides seeing clearer the extreme limitations Sraffa's static model - if the purpose is to understand real, existing capitalism - and not as I interpret Sraffa's motivation, to demolish the GE, based on the same "hard-boiled" static assumptions. Regards Anders Ekeland At 18:48 26.06.2006, Jurriaan Bendien wrote: >I wonder has there been anybody who has systematically compared the >differences between Sraffian surplus and Marxian surplus product? > > From memory, Sraffa's surplus was basically output price less the costs of >inputs required to produce it, and then you can relate embodied labour >(however construed) to these prices, i.e. there is an accounting and >mathematical relationship between the two. > >In Marx's theory, you had the three basic concepts of surplus labour, >surplus value, and realised generic profit, which could all deviate from >each other in magnitude, and could not be captured with a tidy accounting >sum or a mathematical function except in special cases (involving >simplifying assumptions), i.e. you needed an economic theory (a theory of >economic behaviour) to understand the ways they would most likely be >related. > >How compatible are the Sraffian and Marxian concepts, really? Paul Baran, an >astute thinker, seemed to think that there really wasn't much difference >between them, but I suspect that's not really the case. > >How does Sraffa's theory e.g. deal with firms operating at a loss? In Marx's >theory, the firm would have a positive rate of exploitation, a positive rate >of surplus value, and a negative rate of profit. But how does Sraffa deal >with that? > >How does Sraffa deal with the fact that, on the commodities which employees >buy for their subsistence, there is also a profit impost? > >Jurriaan >
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