Sraffa&apos;s Reproduction Prices versus Prices of Production: Probability and Convergence

W. Paul Cockshott, null

doi:10.13169/worlrevipoliecon.8.1.0035

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World Review of Political Economy

Volume 8, Issue 1

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Sraffa's Reproduction Prices versus Prices of Production: Probability and Convergence

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Author(s): W. Paul Cockshott

Publication date (Print): Spring 2017

Journal: World Review of Political Economy

Publisher: Pluto Journals

Keywords: Piero Sraffa, reproduction prices, prices of production, reproduction scheme

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Abstract

The article argues that the reproduction prices introduced in the first chapter of Sraffa's book are not necessarily compatible with the profit equalising prices that form the substance of the book. It uses probabilistic arguments about how probable it is that reproduction prices will approximate to profit equalising prices. By use of random matrix techniques, it shows that the solutions space associated with prices of production is similar to that associated with classical labour values. In the latter part of the article, a random sample of reproduction schemes is simulated over time, under assumptions of capital movement, to see whether such systems dynamically converge on profit equalising prices. It is found that some converge and some fail to converge.

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Author and article information

Journal

Journal ID (doi): 10.13169

Journal ID (publisher-id): worlrevipoliecon

Title: World Review of Political Economy

Publisher: Pluto Journals

ISSN (Print): 2042891X

ISSN (Electronic): 20428928

Publication date (Print): Spring 2017

Volume: 8

Issue: 1

Pages: 35-55

Article

Publisher ID: worlrevipoliecon.8.1.0035

DOI: 10.13169/worlrevipoliecon.8.1.0035

SO-VID: 8abd91b4-6985-477c-9470-46907e72d835

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History

References

Barrow, J. D., J. T. Frank, and J. A. Wheeler. 1988. The Anthropic Cosmological Principle (Oxford Paperbacks). New York: Oxford University Press.
Cockshott, P., and A. Cottrell. 1997. “The Scientific Status of the Labour Theory of Value.” IWGVT Conference at the Eastern Economic Association Meeting, April, 1997. Accessed October 11, 2016. http://www.helmutdunkhase.de/eea97.pdf.
Cockshott, P., and A. Cottrell. 1998. “Does Marx Need to Transform?” in Marxian Economics: A Reappraisal , vol. 2, edited by R. Bellofiore, 70–85. Basingstoke: Macmillan.
Farjoun, E. 1984. “Production of Commodities by Means of What?” in Ricardo, Marx, Sraffa , edited by E. Mandel, 11–41. London: Verso.
Farjoun, E., and M. Machover. 1983. Laws of Chaos, a Probabilistic Approach to Political Economy . London: Verso.
Fröhlich, N. 2013. “Labour Values, Prices of Production and the Missing Equalisation Tendency of Profit Rates: Evidence from the German Economy.” Cambridge Journal of Economics 37 (5): 1107–26.
Greenblatt, R. E. 2014. “A Dual Theory of Price and Value in a Meso-Scale Economic Model with Stochastic Profit Rate.” Physica A: Statistical Mechanics and Its Applications 416: 518–31.
Hilferding, R. 1951. Karl Marx and the Close of His System by Eugen von Bohm-Bawerk and Bohm-Bawerk's Criticism of Marx by Rudolph Hilferding (Together with an Appendix consisting of an article by Ladislaus von Bortkiewicz on the Transformation of Values into Prices of Production in the Marxian System). London: Wiley-Blackwell.
Marx, K. 1887. Capital, vol. 1. The Process of Production of Capital . Translated by S. Moore and E. Aveling, edited by F. Engels. Moscow: Progress Publishers. Accessed December 10, 2007. Marx/Engels Internet Archive. https://www.marxists.org/archive/marx/works/1867-c1.
Marx, K. 1894. Capital: Critique of Political Economy, vol. 3. The Process of Capitalist Production as a Whole . Moscow: Progress Publishers. Accessed December 10, 2007. Marx/Engels Internet Archive. https://www.marxists.org/archive/marx/works/cw/index.htm.
Marx, K. 1974. Capital: A Critique of Political Economy. Volume II. Book 2: The Process of Circulation of Capital . Edited by F. Engels. London: Lawrence & Wishart.
Morishima, M. 1973. Marx's Economics: A Dual Theory of Value and Growth . Cambridge, UK: Cambridge University Press.
Ochoa, E. M. 1989. “Values, Prices, and Wage-Profit Curves in the US Economy.” Cambridge Journal of Economics 13: 413–29.
Samuelson, P. A. 1973. “Reply on Marxian Matters.” Journal of Economic Literature 11: 64–68.
Sánchez, C., and M. N. Ferràndez. 2010. “Valores, precios de producción y precios de mercado a partir de los datos de la economía española [Labour value, production prices and market prices from the Spanish economy data].” Investigación Económica 69 (274): 87–118.
Sánchezc, C., and E. E. Montibeler. 2015. “La teoría del valor trabajo y los precios en China [The labour theory of value and the prices in China]. Economia e Sociedade 24 (2): 329–54.
Shaikh, A. M. 1998. “The Empirical Strength of the Labour Theory of Value.” in Marxian Economics: A Reappraisal , vol. 2, edited by R. Bellofiore, 225–51. Basingstoke: Macmillan.
Sraffa, P. 1960. Production of Commodities by Means of Commodities . Cambridge: Cambridge University Press.
Steedman, I. 1981. Marx after Sraffa . London: Verso.
Zachariah, D. 2006. “Labour Value and Equalisation of Profit Rates.” Indian Development Review 4 (1): 1–21.
Zachariah, D. 2009. “Determinants of the Average Profit Rate and the Trajectory of Capitalist Economies.” Bulletin of Political Economy 3: 13–36.

Comments

Comment on this article

[1] Barrow, J. D., J. T. Frank, and J. A. Wheeler. 1988. The Anthropic Cosmological Principle (Oxford Paperbacks). New York: Oxford University Press.

[2] Cockshott, P., and A. Cottrell. 1997. “The Scientific Status of the Labour Theory of Value.” IWGVT Conference at the Eastern Economic Association Meeting, April, 1997. Accessed October 11, 2016. http://www.helmutdunkhase.de/eea97.pdf.

[3] Cockshott, P., and A. Cottrell. 1998. “Does Marx Need to Transform?” in Marxian Economics: A Reappraisal , vol. 2, edited by R. Bellofiore, 70–85. Basingstoke: Macmillan.

[4] Farjoun, E. 1984. “Production of Commodities by Means of What?” in Ricardo, Marx, Sraffa , edited by E. Mandel, 11–41. London: Verso.

[5] Farjoun, E., and M. Machover. 1983. Laws of Chaos, a Probabilistic Approach to Political Economy . London: Verso.

[6] Fröhlich, N. 2013. “Labour Values, Prices of Production and the Missing Equalisation Tendency of Profit Rates: Evidence from the German Economy.” Cambridge Journal of Economics 37 (5): 1107–26.

[7] Greenblatt, R. E. 2014. “A Dual Theory of Price and Value in a Meso-Scale Economic Model with Stochastic Profit Rate.” Physica A: Statistical Mechanics and Its Applications 416: 518–31.

[8] Hilferding, R. 1951. Karl Marx and the Close of His System by Eugen von Bohm-Bawerk and Bohm-Bawerk's Criticism of Marx by Rudolph Hilferding (Together with an Appendix consisting of an article by Ladislaus von Bortkiewicz on the Transformation of Values into Prices of Production in the Marxian System). London: Wiley-Blackwell.

[9] Marx, K. 1887. Capital, vol. 1. The Process of Production of Capital . Translated by S. Moore and E. Aveling, edited by F. Engels. Moscow: Progress Publishers. Accessed December 10, 2007. Marx/Engels Internet Archive. https://www.marxists.org/archive/marx/works/1867-c1.

[10] Marx, K. 1894. Capital: Critique of Political Economy, vol. 3. The Process of Capitalist Production as a Whole . Moscow: Progress Publishers. Accessed December 10, 2007. Marx/Engels Internet Archive. https://www.marxists.org/archive/marx/works/cw/index.htm.

[11] Marx, K. 1974. Capital: A Critique of Political Economy. Volume II. Book 2: The Process of Circulation of Capital . Edited by F. Engels. London: Lawrence & Wishart.

[12] Morishima, M. 1973. Marx's Economics: A Dual Theory of Value and Growth . Cambridge, UK: Cambridge University Press.

[13] Ochoa, E. M. 1989. “Values, Prices, and Wage-Profit Curves in the US Economy.” Cambridge Journal of Economics 13: 413–29.

[14] Samuelson, P. A. 1973. “Reply on Marxian Matters.” Journal of Economic Literature 11: 64–68.

[15] Sánchez, C., and M. N. Ferràndez. 2010. “Valores, precios de producción y precios de mercado a partir de los datos de la economía española [Labour value, production prices and market prices from the Spanish economy data].” Investigación Económica 69 (274): 87–118.

[16] Sánchezc, C., and E. E. Montibeler. 2015. “La teoría del valor trabajo y los precios en China [The labour theory of value and the prices in China]. Economia e Sociedade 24 (2): 329–54.

[17] Shaikh, A. M. 1998. “The Empirical Strength of the Labour Theory of Value.” in Marxian Economics: A Reappraisal , vol. 2, edited by R. Bellofiore, 225–51. Basingstoke: Macmillan.

[18] Sraffa, P. 1960. Production of Commodities by Means of Commodities . Cambridge: Cambridge University Press.

[19] Steedman, I. 1981. Marx after Sraffa . London: Verso.

[20] Zachariah, D. 2006. “Labour Value and Equalisation of Profit Rates.” Indian Development Review 4 (1): 1–21.

[21] Zachariah, D. 2009. “Determinants of the Average Profit Rate and the Trajectory of Capitalist Economies.” Bulletin of Political Economy 3: 13–36.