Heterodox
I do not know if I will keep on, but I thought I might present a series of posts expanding on this one. By the way, I should have said there that the maximum rate of profits is the reciprocal of the organic composition of capital in Sraffa's standard system, not the actual system. Sraffa's model is descriptive, based on objective data that can be observed for one production period. This data, at least through the first three chapters of The Production of Commodities by Means of Commodities, consists of: The gross quantities produced over the production period, in physical units. The proportion of labor employed in each industry. The commodities that are used as inputs in each industry. The wage, expressed as a proportion of the value of the net output produced in the period.
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Robert Vienneau considers the following as important: Methodology of Economics
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I do not know if I will keep on, but I thought I might present a series of posts expanding on this one. By the way, I should have said there that the maximum rate of profits is the reciprocal of the organic composition of capital in Sraffa's standard system, not the actual system.
Sraffa's model is descriptive, based on objective data that can be observed for one production period. This data, at least through the first three chapters of The Production of Commodities by Means of Commodities, consists of:
- The gross quantities produced over the production period, in physical units.
- The proportion of labor employed in each industry.
- The commodities that are used as inputs in each industry.
- The wage, expressed as a proportion of the value of the net output produced in the period.
Assume that the same rate of profits is made in each industry. Evidently, this model is of a more or less competitive capitalist economy. Then, assuming a viable economy, prices of production are determined by the data.
Sraffa extends this approach to consider joint production, including fixed capital and rent. He often does not explicitly state assumptions or, if so, not in any detail. Furthermore, how this approach fits with a more thorough analysis of capitalist economies, at least, has been a subject of debate ever since the publication of his book.