Jim D. writes:
one big problem with the Sraffa tradition (that of reswitching, not the early stuff) is that it is highly dependent on the assumption of equilibrium. That is, the equilibrium points are knife-edges, unstable, which makes them inappropriate for most empirical work. This is unlike the neoclassical tradition, in which the assumption of smooth curves allows the attainment of a new equilibrium after an old one has been disturbed. However, it is appropriate to use Sraffian equilibrium models to criticize neoclassical (or other) equilibrium models. It is the latter where Sraffa has been most successful.
This is an intriguing post with some original thinking. I am not sure I have fully grasped what Jim meant (I am no Sraffa-mathematical expert). As I am sure Jim knows, just before her death Joan Robinson turned against Sraffian ideas (which she had long promoted). Along the lines of the "pure" Keynesian view, she especially criticized the use of equilibrium: capitalism is inherently in disequilibrium and the Sraffians' equilibrium didn't reconstruct real historical time, just an artificial logic-based version (without path-dependence, etc). Am I right that Jim's critique is not so methodological as this (i.e. the use of equilibrium per se)? I am hearing something like this (or have I got it wrong?): In looking at the choice of capital technique the Sraffians think of a capitalist who pages through a book of technical choices and picks the one that will maximize profits (which depends on the current prevailing wage). This is Jim's sharp "knife-edge" type choices. Neo-classicals think of capital techniques as "putty", the choices are continuously created as part of the process so the equilibrium changes appear to be more smooth. But I haven't followed how this makes the Sraffian view less appropriate for empirical work? Is it a practical problem (difficulty in modeling) or is it a theoretical flaw in the Sraffian view (such as Joan Robinson on equilibrium)? Thanks to Jim for the post. Paul
