The Classical approach to distribution and the “natural system”
AbstractThe modern reformulation of Classical analysis of value and distribution built upon Sraffa’s Production of Commodities provides quite a general and open framework to study distributive relationships, that deserves to be still explored. The present work aims to go through these relationships according to the perspective ensuing from the notion of “natural economic system”, developed by Pasinetti. The natural economic system is a sort of ideal configuration, which allows to accomplish the potentialities of the production system concerning growth, employment and the satisfaction of final wants. Actual (capitalist) economies do not normally fulfil the “natural” configuration. But this configuration can be considered a reference point in order to discriminate between the conditions that have to be verified for the system to reproduce itself and grow according to its potentialities, and the conditions that have to be regarded as pertaining to the institutional sphere. On this perspective several indications can be drawn on various aspects. In this work we shall focus on the normative conclusions that can be drawn about income distribution. Firstly a description of the characteristics and the implications of the “natural” configuration of income distribution will be provided: we will focus on natural rates of profit (which are differentiated among sectors), on the natural level of wages and on the natural rate of interest. Secondly we will depict some instruments to orientate the actual set-up of capitalistic economies towards the natural configuration. In particular we will develop a notion of uniform natural profit rate and we will describe the consequent necessary (“natural”) financial system which allows the natural accumulation of capital to be realized in a capitalistic context, where profit rates tend to be uniform.
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Bibliographic InfoPaper provided by University Library of Munich, Germany in its series MPRA Paper with number 14901.
Date of creation: 28 Apr 2009
Date of revision:
Average natural profit rate; Classical political economy; Labour theory of value; Natural system; Natural profit rates; Prices; Sraffa framework; Structural change; Surplus approach;
Find related papers by JEL classification:
- D46 - Microeconomics - - Market Structure and Pricing - - - Value Theory
- B51 - Schools of Economic Thought and Methodology - - Current Heterodox Approaches - - - Socialist; Marxian; Sraffian
- B12 - Schools of Economic Thought and Methodology - - History of Economic Thought through 1925 - - - Classical (includes Adam Smith)
- E12 - Macroeconomics and Monetary Economics - - General Aggregative Models - - - Keynes; Keynesian; Post-Keynesian
- D33 - Microeconomics - - Distribution - - - Factor Income Distribution
- E23 - Macroeconomics and Monetary Economics - - Macroeconomics: Consumption, Saving, Production, Employment, and Investment - - - Production
- E11 - Macroeconomics and Monetary Economics - - General Aggregative Models - - - Marxian; Sraffian; Institutional; Evolutionary
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- Paul A. Samuelson, 2007. "Classical and Neoclassical harmonies and dissonances," European Journal of the History of Economic Thought, Taylor and Francis Journals, vol. 14(2), pages 243-271.
- Garegnani, Pierangelo, 1984. "Value and Distribution in the Classical Economists and Marx," Oxford Economic Papers, Oxford University Press, vol. 36(2), pages 291-325, June.
- Mandler, Michael, 1999. "Sraffian Indeterminacy in General Equilibrium," Review of Economic Studies, Wiley Blackwell, vol. 66(3), pages 693-711, July.
- Pierangelo Garegnani, 2007. "Professor Samuelson on Sraffa and the classical economists," European Journal of the History of Economic Thought, Taylor and Francis Journals, vol. 14(2), pages 181-242.
- Garegnani, Pierangelo, 1983. "The Classical Theory of Wages and the Role of Demand Schedules in the Determination of Relative Prices," American Economic Review, American Economic Association, vol. 73(2), pages 309-13, May.
- Solow, Robert M., 1979. "Another possible source of wage stickiness," Journal of Macroeconomics, Elsevier, vol. 1(1), pages 79-82.
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