Economics Dictionary of ArgumentsHome
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| Joint production: Joint production in economics occurs when a single production process yields multiple outputs simultaneously. These outputs can be complementary, like wheat and straw, or independent, like refined oil and gasoline. Joint production optimizes resource use and is common in industries like agriculture, manufacturing, and energy._____________Annotation: The above characterizations of concepts are neither definitions nor exhausting presentations of problems related to them. Instead, they are intended to give a short introduction to the contributions below. – Lexicon of Arguments. | |||
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Piero Sraffa on Joint Production - Dictionary of Arguments
Kurz I 85 Joint Production/underdetermination/Sraffa/Kurz: Sraffa begins this discussion with an explicit reference to the problem of underdeterminacy in the familiar case in which two products are produced by a single process and states: ‘The conditions would no longer be sufficient to determine the prices. There would be more prices to be ascertained than there are processes, and therefore equations to determine them’ (p. 43)(1). ‘In these circumstances’, Sraffa continues, ‘there will be room’ either ‘for a second, parallel process which will produce the two commodities by a different method and … in different proportions’ or for the production of ‘a third commodity by two distinct processes’ which use the two jointly produced commodities ‘as means of production in different proportions’. Such further processes ‘will not only be possible - [they] will be necessary if the number of processes is to be brought to equality with the number of commodities so that the prices may be determined’ (p. 43; emphasis added). Then Sraffa assumes ‘that the number of processes should be equal to the number of commodities’ (p. 44). Once again an assumption on the properties of the object is introduced because otherwise the observer cannot do her job. Further, Sraffa is aware of the fact that prices do not need to be definite and positive and, once again, he uses assumptions on the observed objects to solve the problem. Productive processes must be ‘subject … to the general Kurz I 86 requirement of the resulting equations being mutually independent and having at least one system of real solutions: which rules out, for example, proportionality of both products and means of production in the two processes’. Sraffa continues: „However (and this is the only economic restriction), while the equations may be formally satisfied by negative solutions for the unknowns, only those methods of production are practicable which, in the conditions actually prevailing (i.e. at the given wage or at the given rate of profits) do not involve other than positive prices.“ (p. 44)(1) Kurz I 87 Solution/Sraffa: (…) „a Standard commodity which includes both positive and negative quantities can be adopted as money of account without too great a stretch of the imagination provided that the unit is conceived as representing, like a share in a company, a fraction of each asset and of each liability, the latter in the shape of an obligation to deliver without payment certain quantities of particular commodities.“ (p. 48)(1) 1. Sraffa, P. (1960). Production of Commodities by Means of Commodities. Prelude to a Critique of Economic Theory, Cambridge: Cambridge University Press. Salvadori, Neri and Signorino, Rodolfo. 2015. „Piero Sraffa: economic reality, the economist and economic theory. An interpretation.“ In: Kurz, Heinz; Salvadori, Neri 2015. Revisiting Classical Economics: Studies in Long-Period Analysis (Routledge Studies in the History of Economics). London, UK: Routledge._____________Explanation of symbols: Roman numerals indicate the source, arabic numerals indicate the page number. The corresponding books are indicated on the right hand side. ((s)…): Comment by the sender of the contribution. Translations: Dictionary of Arguments The note [Concept/Author], [Author1]Vs[Author2] or [Author]Vs[term] resp. "problem:"/"solution:", "old:"/"new:" and "thesis:" is an addition from the Dictionary of Arguments. If a German edition is specified, the page numbers refer to this edition. |
Sraffa I Piero Sraffa Production of Commodities by Means of Commodities. Prelude to a Critique of Economic Theory (Cambridge: Cambridge University Press). Cambridge 1960 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 |
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