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| Disputed term/author/ism | Author |
Entry |
Reference |
|---|---|---|---|
| Exhaustible Resources | Parrinello | Kurz I 304 Exhaustible resources/Parrinello/Kurz: In 1983 Parrinello turned to the problem of exhaustible resources, such as oil or gas, and asked critically whether the long-period method Sraffa had adopted can also deal With this case or whether it has to be abandoned in favour of some other method (Parrinello 1983)(1). (…) this paper triggered a number of contributions taking up the challenge. When in 1983 Parrinello published his paper he had to rely exclusively on Sraffa's published works. Therefore he could not yet know what is there in Sraffa's manuscripts and papers kept at Trinity College, Cambridge, regarding Kurz I 305 the problem of exhaustible resources. >Exhaustible resources/Sraffa. Kurz I 307 ParrinelloVsSraffa: (…) 'a problem of compatibility' existed between the long-period method revived by Sraffa and the case of exhaustible natural resources (Parrinello 1983: 188)(1). He went on to interpret the introductory passage of Chapter XI of Sraffa's book(2) and concluded that 'Sraffa seems, in his theory of value; to equate land with mineral resources' (188-9)(1). While it is true that Sraffa considered both non-depletable and exhaustible resources as occupying among means of production a position equivalent to that of non-basics among products, he compared gradual depletion of exhaustible resources With that of machines of an obsolete type. Kurz: Therefore, with the benefit of hindsight we may agree with Parrinello 'that the assimilation of mineral deposits to land, if taken too far, may become misleading' (190). Parrinello: Starting from Sraffa's production equations and seeking a way to preserve the classical approach as much as possible and yet cope with the problem of exhaustible resources, Parrinello then counterposes 'two ways in which exhaustible natural resources cuan be treated in the theory of value' (190)(1). According to the first option there is a given 'number of mines of a certain type and the "mine" [is] equated with a machine which exists but is no longer reproduced“. (191). Sraffa/ Kurz: This coincides essentially with the approach taken by Sraffa in the passage he deleted at the proofreading Stage of his book. According to the second option the natural resource is considered „as an inventory of goods no longer produced. The availability of the resource is in this case measured by the quantity under ground or on the surface and this quantity is considered to be divisible into inputs which can belong to distinct processes of two kinds: extractive processes and conservation processes.“(191) Kurz I 308 Solution/Parrinello: (…) conservation processes and extraction processes must explicitly be distinguished. In conditions of free competition this implies, however, that the price of the in situ stock of the resource must rise, following the Hotelling Rule (Hotelling 1931) (197)(3). >Hotelling Rule. Parrinello then compares this case to the case of 'beans' in Sraffa 's book (1960: 91(2)), which are assumed to exhibit a very Iow rate of own reproduction. The case can only be dealt With in terms of a difference between the price of beans at the beginning of the production period and the price at its end, just as in the Hotelling case. This fact is said to spell trouble for the long-period method, because 'the choice of the system of production is not independent of the quantity of the natural resource in Short supply'. Parrinello concludes: „It therefore becomes impossible, in the absence of particular hypotheses, to maintain the thesis that long-term prices can be explained solely on he basis of the distribution and methods of production used in a self-contained period of time.“ (196)(1) To this he adds that this seems to 'lead the theory of value founded on the concept of surplus towards positions close to the neo-classical approach' (196-7)(1). He insisted, however, that the two theories still exhibit a 'substantial difference' (197)(1) as regards the manner in which the rate of interest is determined whether by time preference or surplus. As regards the first method (resources as mines), 'the extraction of the mineral and its conservation below the ground cannot be considered as two separate processes' (197)(1): they must rather be combined into a Single process in which 'the quantity of the mineral extracted and the quantity which remains in the ground at the end of the period are treated as joint products' (198)(1). Parrinello then draws the attention to the special case in which the natural rate of growth of the resource happens to be such that whatever is extracted in a given period is exactly replenished during the same period. In this case, he insists, 'the royalty [defined as the "user cost of the mine" (190)]' would be zero: 'we would have before us a renewable resource which, With respect to the system of production activated, is equal to land (198)(1). VsParrinello/Kurz: Parrinello's paper triggered a rich literature to which contributed, among others, Salvadori (1987)(4), Schefold (1989(5): ch. 19b, 2001(6)), Kurz and Salvadori (1995(7), 1997(8), 2001(9), 2002(10), 2009(11), 2011(12)), Bidard and Erreygers (2001a(14), 2001b(15)), Lager (2001)(16), Parrinello (2001)(17), Ravagnani (2002)(18) and Hosoda (2001)(19). In addition there were contributions dealing with the problem at hand from a classical point of View, but which were not directly related to Parrinello's paper, including Roncaglia (1983(20), 1985(21)), Gibson (1984)(22), Pegoretti (1986(23), 1990(24)) and Quadrio Curzio (1983(25), 1986(26)). Here we focus attention only on some of the former. >Exhaustible resources/Schefold. 1. Parrinello, S. (1983). 'Exhaustible Natural Resources and the Classical Method of Long-period Equilibrium', in J. Kregel (ed.), Distribution, Effective Demand and International Economic Relations, London: Macmillan, pp. 186-99. 2. Sraffa, P. (1960). Production of Commodities by Means of Commodities. Prelude to a Critique of Economic Theory, Cambridge: Cambridge University Press. 3. Hotelling, H. (1931). 'The Economics of Exhaustible Resources', Journal of Political Economy, 39, pp. 137—75. 4. Salvadori, N. (1987). 'Les ressources naturelles rares dans la théorie de Sraffa', in G. Bidard (ed.), La rente, acutalité de Vapproche classique, Paris: Economica, pp. 161-76. 5. Schefold, B. (1989). Mr Sraffa on Joint Production and Other Essays, London: Macmillan. 6. Schefold, B. (2001). 'Critique of the Corn-Guano Model', Metroeconomica, 52(3), pp. 316-28. 7. Kurz, H. D. and Salvadori, N. (1995). Theory of Production. A Long-Period Analysis, Revised paperback edition 1997, Cambridge, UK: Cambridge University Press. 8. Kurz, H. D. and Salvadori, N. (1997). 'Exhaustible Resources in a Dynamic Input-Output Model With 'Classical' Resources', Economic Systems Research, 9(3), pp. 235-51. 9. Kurz, H. D. and Salvadori, N. (2000). 'Economic Dynamics in a Simple Model With Exhaustible Resources and a Given Real Wage Rate', Structural Change and Economic Dynamics, 1 1(1—2), pp. 167—79. 10 Kurz, H. D. and Salvadori, N. (2001). 'Classical Economics and the Problem of Exhaustible Resources', Metroeconomica, 52(3), pp. 282—96. 11. Kurz, H. D. and Salvadori, N. (2002). 'On the Long-period Method. A Comment on Ravagnani', a reply to 'Produced Quantities and Returns in Sraffa's Theory of Normal Prices: Textual Evidence and Analytical Issues', by Fabio Ravagnani, in S. Böhm, Ch. Gehrke, H. D. Kurz and R. Sturn (eds), Is there Progress in Economics? Knowledge, Truth and the History of Economic Thought, Cheltenham: Edward Elgar. 12. Kurz, H. D. and Salvadori, N. (2009). 'Ricardo on Exhaustible Resources, and the Hotelling Rule', in Aiko Ikeo and Heinz D. Kurz (eds.), The History of Economic Theory. Essays in Honour of Takashi Negishi, London: Routledge, pp. 68—79. 13. Kurz, H. D. and Salvadori, N. (2011). 'Exhaustible Resources: Rents, Profits, Royalties, and Prices', in Volker Caspari (ed.), The Evolution of Economic Theory, Essays in Honour of Bertram Schefold, London: Routledge. 14. Bidard, Ch. and Erreygers, G. (2001 a). 'The Corn-Guano Model', Metroeconomica, 52(3), pp. 243-53. 15. Bidard, Ch. and Erreygers, G. (2001b). 'Further Reflections on the Corn—Guano Model', Metroeconomica, 52(3), pp. 254-67. 16. Lager, Ch. (2001). 'A Note on Non-Stationary Prices', Metroeconomica, 52(3), pp. 297-300. 17. Parrinello, S. (2001). 'The Price Of Exhaustible Resources', Metroeconomica, 52(3), pp. 301-15. 18. Ravagnani, F. (2002). 'Produced Quantities and Returns in Sraffa's Theory of Normal Prices: Textual Evidence and Analytical Issues', in S. Böhm, Ch. Gehrke, H. D.Kurz and R. Sturn (eds.), 1s there Progress in Economics? Knowledge, Truth and the History of Economic Thought, Cheltenham: Edward Elgar. 19. Hosoda, E. (2001). 'Recycling and Landfilling in a Dynamic Sraman Model: Application of the Corn-Guano Model to a Waste Treatment Problem', Metroeconomica, 52(3), pp. 268-81. 20. Roncaglia, A. (1983). 'The Price of Oil', Journal of Post Keynesian Economics, 5, pp. 557-78. 21. Roncaglia, A. (1985). The International Oil Market, London: Macmillan. 22. Gibson, B. (1984). 'Profit and Rent in a Classical Theory of Exhaustible and Renewable Resources', Zeitschrift für Nationalökonomie, 44, pp. 131—49. 23. Pegoretti, G. (1986). Risorse, produzione, distribuzione, Milan: Franco Angeli. 24. Pegoretti, G. (1990). 'Offerta di risorse non riproducibili, scelta della tecnica e struttura produttiva', in A. Quadrio Curzio and R. Scazzieri (eds.), Dinamica economica e strutturale, Bologna: Il Mulino, pp. 81-121. 25. Quadrio Curzio, A. (1983). 'Primary Commodity Prices, Exhaustible Resources and International Monetary Relations: Alternative Explanations', in J. Kregel (ed.), Distribution, Effective Demand and International Economic Relations, London: Macmillan, pp. 142-52. 26. Quadrio Curzio, A. (1986). 'Technological Scarcity: An Essay on Production and Structural Change', in M. Baranzini and R. Scazzieri (eds.), Foundations of Economics, Oxford: Basil Blackwell, pp. 311-38. Kurz, Heinz D. and Salvadori, Neri. „The 'classical' approach to exhaustible resources. Parrinello and the others.“ In: Kurz, Heinz; Salvadori, Neri 2015. Revisiting Classical Economics: Studies in Long-Period Analysis (Routledge Studies in the History of Economics). London, UK: Routledge. |
Parrinello I Sergio Parrinello Exhaustible Natural Resources and the Classical Method of Long-period Equilibrium London: MacMillan 1983 Kurz I Heinz D. Kurz Neri Salvadori Revisiting Classical Economics: Studies in Long-Period Analysis (Routledge Studies in the History of Economics). Routledge. London 2015 |
| Marginal Product | Sraffa | Harcourt I 179 Marginal product/Sraffa/Harcourt: The author's point of view(1) has the important consequence that by ruling out variations in scale and in 'factors', marginal product is ruled out as well - 'it just would not be there to be found' (preface, p. v)(1). >Measurements/Sraffa. Harcourt: This is true. However, it should be noted that prices in the marginal theory of value are related to notional instantaneous rates of change which can be thought of as occurring at the margins of the levels of production of the actual economic systems examined here. In other words, there need not be an actual marginal product in order to have a determinate system of prices which is based on marginalist notions. Sraffa may be hinting that the assumption of mathematical continuity is inappropriate for the analysis of price-formation in an economic system; that is to say, it is impossible to use the device of notional movements along a schedule which shows a relationship between two economic variables and which assumes that everything else remains constant. This is because the very fact of change necessarily implies that the changes in these other things are such that it just cannot be assumed that they remain constant. (Such is the basis of his criticism of supply and demand analysis in Sraffa [1926](2).) Alternatively, he might be interpreted as meaning that there is not enough information in any actual economic system to tell us what the marginal (as opposed to the average) product is. Even if it is a valid procedure to derive a system of prices from notional changes, it might still be that the prices associated with the technical conditions of production and with self-replacement are more fundamental than those associated with notional changes. VsSraffa: Meek [1967](3), pp. 161-78, whose review article is entitled 'Mr. Sraffa's Rehabilitation of Classical Economies', provides an interesting explanation of the rationale of Sraffa's approach. Thus, „Mr Sraffa's important book ... can be looked at from various points of view. It can be regarded, if one pleases, simply as an unorthodox theoretical model of a particular type of economy, designed to solve the traditional problem of value in a new way. It can be regarded as an implicit attack on modern marginal analysis: the sub-title of the book is 'Prelude to a Critique of Economic Theory', and Sraffa in his preface expresses the hope that someone will eventually attempt the job of basing a critique of the marginal analysis on his foundations.Or, finally, it can be regarded as a sort of magnificent rehabilitation of the Classical (and up to a point Marxian) approach to certain crucial problems relating to value and distribution. Harcourt I 180 It is upon this third aspect of the book that I wish to concentrate .. . In doing so, I do not of course want to suggest that the essence of Sraffa's book lies in this rehabilitation of the Classical approach: Sraffa's primary aim is to build a twentiethcentury model to deal with twentieth-century problems. I am approaching his book in this particular way largely because I think it affords the best method of understanding his basic argument.“ (p. 161.)(3) 1. Sraffa, Piero [1960] Production of Commodities by Means of Commodities. Prelude to a Critique of Economic Theory (Cambridge: Cambridge University Press). 2. Sraffa, P. [1926] 'The Laws of Return under Competitive Conditions', Economic Journal, xxxvi, pp. 535-50. [1962] 'Production of Commodities: A Comment', Economic Journal, Lxxn, pp. 477-9. 3. Meek, R. L. [1967] Economics and Ideology and Other Essays. Studies in the Development of Economic Thought (London: Chapman and Hall). |
Sraffa I Piero Sraffa Production of Commodities by Means of Commodities. Prelude to a Critique of Economic Theory (Cambridge: Cambridge University Press). Cambridge 1960 Harcourt I Geoffrey C. Harcourt Some Cambridge controversies in the theory of capital Cambridge 1972 |
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