Development and Underdevelopment in the History of Economic Thought

Existence and Importance of the Standard Commodity. New and Old Results

Schefold Bertram, Goethe-Universität, Frankfurt am Main

It will be shown that the representation of standard prices in Sraffa can be misleading insofar as Sraffa fails to provide a rule as to how fast indirect labour inputs fall in the reduction to dated quantities of labour. If this is corrected, movements of relative prices with changes of distribution are not as dramatic as they appear to be in Sraffa’s representation. Misconceptions regarding the fall of labour inputs over time in the reduction to dated quantities of labour can be shown to have had an influence on the debates about capital theory. Manara had shown that the standard commodity did formally not always exist with joint production. As Yoann Verger found, Sraffa drafted a paper with the intention of showing that Manara’s example was economically not meaningful, but I was able to convince Sraffa that an extension of Manara’s example could not be so disqualified – at any rate, Sraffa did not publish this draft. Dupertuis and Sinha claimed that a standard commodity would always exist in productive joint production systems, if these systems were not only basic but also reduced to what they call their core. However, they overlooked that their proof does not cover a case discussed already in 1971 in which the presence of intensive rent prevents the existence of the standard commodity. Moreover, Dupertuis and Sinha fail to explain how their analysis relates to the earlier analyses of truncation; standard commodities had long been shown to exist for the truncations. But such reduced systems provide standard commodities which do not really serve their purpose of helping to explain how relative prices move, since the original system and the reduced system do not contain the same commodities. The conclusion is that the standard commodity is available and useful in the single product case, even though a correction regarding dated quantities of labour is needed, but that the standard commodity plays no essential role in the analysis of joint production.

Area:

Keywords: Sraffa, standard commodity, capital theory

Paper file