tag:blogger.com,1999:blog-26706564.post3362124183057065594..comments2024-03-25T07:51:47.758-04:00Comments on Thoughts On Economics: Jacob Schwartz (9 January 1930 - 2 March 2009)Robert Vienneauhttp://www.blogger.com/profile/14748118392842775431noreply@blogger.comBlogger1125tag:blogger.com,1999:blog-26706564.post-59263712146075542642010-10-20T09:32:44.154-04:002010-10-20T09:32:44.154-04:00Hello,
@ Walt, welcome on the blog.
@ Robert,The ...Hello,<br />@ Walt, welcome on the blog.<br /><br />@ Robert,The CCC is a great inspiration for me. Nevertheless, the neoricardian theory of Sraffa makes some severely limiting assumptions. Here I will summarize the critique of Alfred Mueller, a German marxist economist. It is quite a list:<br />-----------<br />(1) Money effects are not included in the model. Instead the prices are expressed in terms of a numeraire. However, in the real world the prices can emerge only, when products are exchanged with money as the intermediary.<br />(2) The theory presents the production factors as external quantities. The production technology and the size of the GDP are also taken as external quantities. This is probably a typical marxist critique, since the marxist theory professes to be complete and self-contained. It proposes a model for the social conditions, including the weak position of the workers and the inherent technology push due to the necessity to accumulate. Mueller adds, that it is impossible to calculate prices and profit rates, when the social conditions are neglected. I guess that he hints here at monopoly power, which allows the producer to set his product prices;<br />(3) The theory assumes constant returns to scale. The neoricardians suppose that the constant returns to scale assumption is a fair approximation of the real world, but this can hardly be substantiated;<br />(4) The theory assumes a steady state. The instability, which is typical for the capitalist system, is absent in the model.<br />-----------<br />Basically Mueller is right. Of course the neoricardian theory keeps her merits, especially as a critique of the neoclassical theory. But regrettably it is not a dynamic model, like the Kaleckian and marxist theories.Emil Bakkumhttp://www.socialistischcentrumbakkum.nlnoreply@blogger.com