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Normative (and objective) analysis in Sraffa's system
Author(s) -
D'Agata Antonio
Publication year - 2021
Publication title -
metroeconomica
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.256
H-Index - 29
eISSN - 1467-999X
pISSN - 0026-1386
DOI - 10.1111/meca.12337
Subject(s) - normative , economics , profit (economics) , norm (philosophy) , mathematical economics , income distribution , labor theory of value , microeconomics , wage , distribution (mathematics) , neoclassical economics , inequality , mathematics , philosophy , labour economics , epistemology , mathematical analysis
With the exception of Pasinetti's work on structural change, the sraffian literature remains silent on normative issues. By generalizing Smith's notion of free competition, this paper identifies and formalizes an ideal social arrangement yielding a unique income distribution configuration which is fair in terms of the “equality of opportunity” norm, and which can be used as a benchmark for normative analysis in Sraffa's system. In this hypothetical economy, the price vector, the wage rate and the profit rates depend only on physical quantities. The relation between this result and Sraffa's “physical real cost” theory of value and distribution is also discussed.