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Advanced or postponed wage payments: Sraffa validates Marx

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  • Marco Lonzi
  • Samuele Riccarelli
  • Ernesto Screpanti

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 pre-payment. 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.

Suggested Citation

  • Marco Lonzi & Samuele Riccarelli & Ernesto Screpanti, 2017. "Advanced or postponed wage payments: Sraffa validates Marx," Department of Economics University of Siena 756, Department of Economics, University of Siena.
    • Handle: RePEc:usi:wpaper:756
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    File URL: http://repec.deps.unisi.it/quaderni/756.pdf
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    Cited by:

    1. Sergio Cesaratto & Stefano di Bucchianico, 2020. "Endogenous money and the theory of long-period effective demand," Bulletin of Political Economy, Bulletin of Political Economy, vol. 14(1), pages 1-38, June.

    More about this item

    Keywords

    Value theory; Marx; Sraffa;
    All these keywords.

    JEL classification:

    • B31 - Schools of Economic Thought and Methodology - - History of Economic Thought: Individuals - - - Individuals
    • B51 - Schools of Economic Thought and Methodology - - Current Heterodox Approaches - - - Socialist; Marxian; Sraffian

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