Bertram Schefold

Different Forms of Technical Progress

The classics, Smith and Ricardo, used their theory of value to base their theories of accumulation, technical progress, and the long-term trend of distribution on the analysis of the technological development in specified industries such as textiles, corn production, watch-making, etc. Marx undertook vast studies of the history of technology and related it to the evolution of the productive relations. The chapters on cooperation, the division of labour, and on modern industry in Das Kapital are the best known distillates of that research, and they link up with his theory of accumulation. The modern neoclassicals, on the other hand, tend to separate their microeconomic theory of value — be it at the level of firms or of industries — from the macroeconomic theory of accumulation. The static character of much general equilibrium theory has prevented its use for an analysis of technical progress — hence the need for aggregate production functions in neoclassical economics for the analysis of accumulation. This dichotomy of the theory of value and of the theory of accumulation is unfortunate, all the more so since the foundations of neoclassical macroeconomics have been undermined in the reswitching debate.

Multiple product techniques with properties of single product systems

In the context of Sraffa systems most economists tend to avoid joint production and prefer to discuss single product systems because of their simple and elegant properties which have often been represented under the familiar headings of activity analysis or linear economic systems outside the circle of the Sraffa school. It is true that joint production raises a number of intricate problems; no straightforward economic assumptions are known which could be made to ensure that prices in joint production systems are positive at a given rate of profit prior to truncation, the distinction between basics and non-basics is not easily maintained in the presence of joint production, etc. Sraffa (1960) has hinted at many of the problems involved. I believe, however, that it is possible to characterise those instances of joint production systems which retain some of the simple properties of single product systems, to distinguish them analytically from those with more paradoxical properties and to relate the paradoxes appearing in the theoretical model to obstacles to the competitive formation of prices in the real world.

Von Neumann and Sraffa: Mathematical Equivalence and Conceptual Difference

In this chapter I compare Sraffa’s and von Neumann’s methods for the analysis of joint production systems from the point of view of economic methodology; a parallel article gives the mathematical background with complete proofs but without the interpretation proposed here (see Chapter 5 in this volume and the summary of mathematical definitions and results in the Appendix).

Fixed Capital as a Joint Product and the Analysis of Accumulation with Different Forms of Technical Progress

Since the reswitching debate, the point has become familiar that the means of production in a capitalist society represent different ‘quantities of capital’, depending on the prevailing rate of profit. But, because these discussions have been about a critique of the neoclassical theory of value and distribution and not about a comprehensive new theory of capital, they have been conducted either in terms of circulating capital without machines or in terms of the production of one consumption good by means of one machine, with input prices assumed to be given, or with no physical inputs except labour (cf. Hicks, 1970; Nuti, 1970). Although von Neumann and Sraffa revived the ‘old classical idea’ (Sraffa) of treating what is left at the end of the year’s process of production as an economically different good2 from the one which entered the process, very few’ have tried to construct models where fixed capital goods are explicitly distinguished from other kinds of joint products.

The Dominant Technique in Joint Production Systems

This paper argues that the essential properties of the wage curves of single product systems hold also with joint production-hence, the mai n tool for the analysis of accumulation with technical progress, used with single product systems, can also be used here. The wage curve still expresses the trade-off between wages and profits. It is geometrically identical with the curve relating consumption per head and the rate of growth. Copyright 1988 by Oxford University Press.

Reswitching as a Cause of Instability of Intertemporal Equilibrium

It is generally recognized that the paradoxes of capital, of which reswitching is the most striking example, are a reason to question the existence of aggregate production functions. It is here shown that they affect intertemporal general equilibrium as well as causes of instabilities.

On Changes in the Composition of Output

It has often been remarked that ‘demand’ is missing from the Sraffa system. If the level and composition of output change, the input-output coefficients change so that there seems to be no room for a consideration of demand. If, on the other hand, distribution is given and there are constant returns to scale, prices are determined independently of the levels of output in the different sectors. It would then seem that demand conditions can be freely introduced, but they only fix the quantities. The latter case can clearly only serve as an introduction; yet it is regarded as the main case by neoclassical interpreters.

Fixed Capital as a Joint Product

Since the Reswitching Debate the point has become familiar that the means of production in a capitalist society represent different ‘quantities of capital’ depending on the prevailing rate of profit. But because these discussions were about a critique of the neoclassical theory of value and distribution and not about a new comprehensive theory of capital, they have been conducted either in terms of circulating capital without machines or in terms of production by means of one machine at different ages (cf. Hicks, 1970, Nuti, 1970). Although von Neumann and Sraffa revived the ‘old classical idea’ (Sraffa) of treating what is left at the end of the year’s process of production as an economically different good from the one which entered the process, very few1 have tried to construct models with several fixed capital goods which are explicitly distinguished from other kinds of joint products.

Relative prices as a function of the rate of profit: A mathematical note

The reswitching debate has made it obvious that prices are in general complicated functions of the rate of profit in single product systems of the Sraffa type (Sraffa, 1960):

Political Events and Economic Ideas

Preface Introduction Part I: Monetary Theory and Policy between International Rivalry and Integration Part II: Frances Economic Crisis in the Eighteenth Century and the Accompanying Revolution in Political Economy Part III: Co-evolution of Political Ideas and Economic Thought in Different Countries and Periods Part IV: Political and Economic Continuity and Discontinuity in Russia Part V: Polar Reactions to the Great Depression Part VI: The Effect of Political Events on Economic Ideas: A Round Table Discussion Part VII: The Jerome Adolphe Blanqui-Lecture Index