Entrepreneurship, knowledge and employment

Production of Commodities by means of Commodities without the Self-Replacing assumption

Zambelli Stefano, Dept. of Economics - Univ. of Trento VAT. 00340520220

This paper is the third of a set of papers devoted to the study of the implications that the removal of certain assumptions might have on the content of Sraffa's book 'Production of Commodities by Means of Commodities'. Sraffa conducts his analysis making two major assumptions. The first explicit assumption is connected with the study of self-replacing state exchange-values, or production prices, where the rate of profits is supposed to be uniform for all industries. Much has been written on this assumption, but very little has been said for the cases in which non-uniform rates of profits are allowed. A simple inspection of Sraffian Schemes shows that there are prices that are consistent, or imply, non-uniform rate of profits, and 'if adopted by the market' could 'restore the original distribution of the product'. A paper dealing with this issue was presented at the 2016 ESHET Annual Conference, Paris. Another important \underline{implicit} assumption is the absence, in Sraffa's market after the harvest, of any mechanism that might allow for trade to take place with the use or generation of deferred means of payments (i.e., endogenous debt and credit relations). In the presence of these means of payments it is still possible that the [production] process be repeated, i.e. that the system repeats itself even when the prices are not production prices. A paper where endogenous credit and debt relations are introduced inside Sraffian schemes was presented at the 2017 ESHET Annual Conference, Antwerpen. In the paper to be presented at the 2018 ESHET Annual Conference, Madrid, Spain, we study the implications of the removal of the self-replacing assumption. The major aim is to show that, obviously, the critique to economic theory holds also when change is considered and, most importantly, that the self-replacing case may be seen as a special case of a more generalized set of cases where economic motion is studied.

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Keywords: Sraffian Schemes, Stationary State, Long and short run, Endogenous Money.

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