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Viability, reproducibility and returns in production price systems

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  • Enrico Bellino

    (Università Cattolica del Sacro Cuore)

Abstract

Production prices have often been conceived as those exchange rates among commodities which allow their reproduction in the same quantities (or along a proportional growth path). A deeper investigation of Sraffa’s price equations reveals that this characterization is not well grounded. The notion of ‘viability’ of a system is thus re-defined here in such a way as to allow the determination of production prices for economies that are not in a self-replacing state (i.e. displaying positive net products in some industries and negative net products in others). Viability is here connected to the possibility for each industry to reintegrate the value of the means of production and to obtain a uniform non-negative rate of profit. It appears, thus, as a notion that mainly impacts the value side. This specification is relevant for an approach where the quantities are determined separately from the relations between value and income distribution. The focus on non-self-replacing systems opens the question on how to handle this and all cases of systematic changes in output levels without losing the property of persistence of production prices, which permits them to be regarded as centres of gravitation. This issue is explicitly linked to possible specific assumptions that can be made on returns. The various views on this point are discussed here in relation to the main features of the modern classical approach.

Suggested Citation

  • Enrico Bellino, 2018. "Viability, reproducibility and returns in production price systems," Economia Politica: Journal of Analytical and Institutional Economics, Springer;Fondazione Edison, vol. 35(3), pages 845-861, December.
    • Handle: RePEc:spr:epolit:v:35:y:2018:i:3:d:10.1007_s40888-017-0082-2
    DOI: 10.1007/s40888-017-0082-2
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    References listed on IDEAS

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    1. Heinz Kurz & Neri Salvadori, 2005. "Representing the production and circulation of commodities in material terms: On Sraffa's objectivism," Review of Political Economy, Taylor & Francis Journals, vol. 17(3), pages 413-441.
    2. Ajit Sinha, 2015. "A Reflection on the Samuelson-Garegnani Debate," Economic Thought, World Economics Association, vol. 4(2), pages 1-48, September.
    3. 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.
    4. Pasinetti, Luigi L, 1977. "On 'Non-Substitution' in Production Models," Cambridge Journal of Economics, Cambridge Political Economy Society, vol. 1(4), pages 389-394, December.
    5. Eatwell, John, 1977. "The Irrelevance of Returns to Scale in Sraffa's Analysis," Journal of Economic Literature, American Economic Association, vol. 15(1), pages 61-68, March.
    6. Guglielmo Chiodi, 1998. "On Non-self-replacing States," Metroeconomica, Wiley Blackwell, vol. 49(1), pages 97-107, February.
    7. Pierangelo Garegnani, 2007. "Professor Samuelson on Sraffa and the classical economists," The European Journal of the History of Economic Thought, Taylor & Francis Journals, vol. 14(2), pages 181-242.
    8. Fabio Ravagnani, 2001. "Notes on a Mischaracterization of the Classical Theory of Value," Review of Political Economy, Taylor & Francis Journals, vol. 13(3), pages 355-363.
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    Cited by:

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    3. Di Bucchianico, Stefano, 2020. "Discussing Secular Stagnation: A case for freeing good ideas from theoretical constraints?," Structural Change and Economic Dynamics, Elsevier, vol. 55(C), pages 288-297.

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    More about this item

    Keywords

    Self-replacing systems; Prices of production; Viability; Returns; Modern classical approach;
    All these keywords.

    JEL classification:

    • B21 - Schools of Economic Thought and Methodology - - History of Economic Thought since 1925 - - - Microeconomics
    • B51 - Schools of Economic Thought and Methodology - - Current Heterodox Approaches - - - Socialist; Marxian; Sraffian
    • B54 - Schools of Economic Thought and Methodology - - Current Heterodox Approaches - - - Feminist Economics
    • D24 - Microeconomics - - Production and Organizations - - - Production; Cost; Capital; Capital, Total Factor, and Multifactor Productivity; Capacity
    • E11 - Macroeconomics and Monetary Economics - - General Aggregative Models - - - Marxian; Sraffian; Kaleckian

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