Economics Dictionary of ArgumentsHome
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| Marginal product: In economics, marginal product refers to the additional output produced by adding one more unit of a specific input (e.g., labor or capital) while keeping other inputs constant. It helps assess the efficiency of resource use and is key in understanding diminishing returns, where each additional input contributes less to total output. See also Returns to scale, Input-Output Analysis._____________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 Marginal Product - Dictionary of Arguments
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)._____________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 Harcourt I Geoffrey C. Harcourt Some Cambridge controversies in the theory of capital Cambridge 1972 |
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