Sraffa's notes

28.XI.29

Phases of capitalism

Age of increase of population:

up to Industrial Revolution + French Revolution.

Mercantilism (practice or theory?) absolute monarchy

ends in Malthus, Wallace (Lloyd: power = population × circulation)

Age of increase of circulating capital:

up to 1820–1830 (railways, chartism) Classical P. E.

Physiocrats

beginnings of democracy

The series of the forms of capital must be made continuous

Age of increase of intermediate capital

up to 1870. Free trade, democracy

Risorgimento

Age of increase of fixed capital

up to 1914 Protection “to infant industries”.

Age of...

Imperialism, ultima tappa. {final stage} Capitalism has lost all his reasons of life, having exhausted his tasks. It simply defends itself.

Age of increase of land

negative rent on fixed capital

circ. on fix.

Law of Keynes: two forces:

Fixed + circul. cap.

Does not the proportion of machines that is fixed capital depend upon the length of the productive period? And then also whether they ought to get interest or not? Is it so arbitrary and ill defined as Marshall's quasi rent? Because it is a question of deciding, in precise numbers, what is rent + what is interest.

Surplus ‒ all right

Then fix. cap. elimin. D = D

Keynes' theory

Metaphysics

Conciliation of econ. + Marx

Infinite solutions but proportional: all that is wanted

Marsh. on measure of cost (Mr Mills theo)

Stupidi, cercate soluz esterna al valore!

(nt. lav. ecc.)

But the question as to whether interest on fixed cap. is good or harmful cannot be left to arbitrary choice of length of period (but is it arbitrary?) yes, if continuous)

Ricardo's cumulated interest.

The size of the marginal unit depends on the period: but that is indifferent to payment of interest, as it is proportional.

But period affects distinction in proportions of rent + interest. It is however definite: rent bears the same relation to interest, as amount consumed bears to amount surviving of fixed capital during that period. The longer the period, the greater proportion of rent.

In fixed capital rent is paid also on the marginal unit because otherwise it would be converted into circulating: it is just the marginal that would be converted. Therefore fixed capital is not, as it should (and as land cannot for fisical reasons) be exploited up to the margin only because interest has to be paid even on the margin.

quasi rent: proportions of cap.

So far, arbitrary.

But periods determined

The shorter the period dura period considered, the greater fixed capital: [how two forces cumulate] K. law.

2 Elimination of capital.

1 Economic time, discontinuous: at limit, no capital.

What is limit?

enhanced p.l

ãh

but his period: cycle of prod

my per. is Marshalls

Margins

Time Keynes' law.

progres

meaning of long + short

relative to period progress + fluctuations

statical assumptions, what mean?

lenght of period.

short

where long (agric.) little progress (also little fixed cap.: is it not identical to little progress?)

where short (railways, electricity) great progress

When we have got surplus, natural economy stops. How distributed?

Uses of “absolute cost”. Necessary for distrib. of resources, Pigou's taxes + bounties. National dividend, intermediate between gross + net. What matters is net, in the long run.

Absurd conclusion of Pigou on labour saving machinery, right conclusion of Ricardo.

Labourer [costs 10] substituted, after invention by horse, that costs 8: suppose the 2 goes to the labourer, he will substitute horse in former employment, which was certainly marginal, and will get just under 8.

Time

Marshall's “short or long periods”: how could he think of two simultaneous + different times for the same thing?

“Period of time” is simply the internal (or relation) between the cause and its effect. This is a definite not arbitrary [length] unit. The cause takes place at one point in time, the effect explodes all at once at a different point of time.

When Marshall says a tax [a rise in price] will have different effects on prices (or quantities produced) according as we “allow a long or a short period”, by “a tax” he is taking an arbitrary composite unit. He is in fact considering an enormous number of extremely small taxes: they all start simultaneously, but their effects take place at different points in time, but according to the nature of the different particles of matter to which they are applied: but each of the effects explodes at one point of time.

In fact time can only be thought as the relation between cause and effect.

There is one time for each thing: this time is discontinuous, it is formed by segments, the ends of which are ‒ an effect (end) of one is the cause (beginning) of another, the effect [(end)] of this becomes a cause (beginning) of the following..... and so on... ad infinitum?

No: lenght of period decreases in the progress as the square of....

Shifts + working capital

Suppose several shifts are worked every day. If, by decreasing the working hours of each shift, we can add one further shift, this is convenient even if each worker puts in 6 hours work less than less output than in the former 8 hours, paying of course the same daily wage to each.

In effect, working capital decreses with square of period of production = and the latter decreases owing to additional shift.

But why if that is so does not the capitalist undertaker carry it out? Because interest on working cap. is small part of his expenses? But then also interest of fixed would decrase in proportion, not to t2, but to t.

If we say that interest [i.e. surplus] “may” be paid on working capital only, we can conclude that it can only be paid to the workers.

(But then why are we so anxious to reduce working capital, taking advantage of the fact that it is proportional to t 2?)

W. Capital is exceedingly small because it is the photograph of what exists at any one moment, not of what has been spent during the period (not? of course it is)