In his theoretical model of production prices Marx follows the classical economists in treating wages as being paid in advance. Sraffa, instead, tends to treat them as being paid post factum. However, when Marx tackles the problem under less abstract scrutiny, he abandons the classical approach and declares that, as a matter of fact, wages are postponed. We prove that, if the period of postponed wage payment differs from the length of the production process, the correct prices are better approximated by an equation with the full post-payment of wages than by one with full prepayment. Under perfect competition and postponed wage payments, Sraffa’s approach to price determination is the correct one, and validates Marx’s non-classical vision, whatever the period of wage payment.

Lonzi, M., Riccarelli, S., Screpanti, E. (2017). Advanced or posponed wage payments: Sraffa validates Marx.

Advanced or posponed wage payments: Sraffa validates Marx

Lonzi Marco;Riccarelli Samuele;Screpanti Ernesto
2017-01-01

Abstract

In his theoretical model of production prices Marx follows the classical economists in treating wages as being paid in advance. Sraffa, instead, tends to treat them as being paid post factum. However, when Marx tackles the problem under less abstract scrutiny, he abandons the classical approach and declares that, as a matter of fact, wages are postponed. We prove that, if the period of postponed wage payment differs from the length of the production process, the correct prices are better approximated by an equation with the full post-payment of wages than by one with full prepayment. Under perfect competition and postponed wage payments, Sraffa’s approach to price determination is the correct one, and validates Marx’s non-classical vision, whatever the period of wage payment.
Lonzi, M., Riccarelli, S., Screpanti, E. (2017). Advanced or posponed wage payments: Sraffa validates Marx.
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Utilizza questo identificativo per citare o creare un link a questo documento: https://hdl.handle.net/11365/1037772