COMMODITY CONTENT IN A GENERAL INPUT–OUTPUT MODEL

This technical paper provides a definition of ‘commodity content’ in extended von Neumann–Morishima models of production. Our definition admits as special cases the classical definition of ‘labour values’ in Leontief models, as well as Morishima's definition of ‘optimal values’ in a von Neumann model. Proper joint production, heterogeneous labour, durable consumption goods, household activities and disposal processes are all allowed for. We also propose a tentative mathematical criterion for defining bads and for distinguishing between unskilled and skilled labour.     

LONG‐RUN RISING SUPPLY PRICE AND THE NUMÉRAIRE

When a set of industries is kept in long‐run equilibrium, it is never possible to change just one price at a time. But when various (or all) prices are changing, the direction of change of any one price can depend on the numéraire adopted. What does it mean, then, to say that a long‐run supply curve is upward (or downward) sloping? Can this qualitative property be independent of the numéraire in terms of which the product price is being measured? In general, it cannot.     

Optimal safety stock levels of subassemblies and manufacturing components

In order to control the time to market and manufacturing costs, companies produce and purchase many parts and components before receiving customer orders. Consequently, demand forecasting is a critical decision process. Using modular product design and super bills of materials are two effective strategies for developing a reliable demand forecasting process. They reduce the probability of stockouts in diversified production contexts. Furthermore, managing and controlling safety stocks for pre-assembled modules provide an effective solution to the problem of minimizing the effects of forecast errors. This paper develops, evaluates, and applies innovative cost-based analytical models so that the optimal safety stock of modular subassemblies and components in assembly to order and manufacturing to order systems, respectively, can be rapidly quantified. The implementation of the proposed models in two industrial case applications demonstrates that they significantly reduce the safety stock inventory levels and the global logistical cost.     

Unconventional Results with Surrogate Production Functions

Starting from Samuelson's famous 1962 Surrogate Production Function, we show that some such functions are perfectly consistent with a ‘return of the machine type’. This is so when we introduce a distinctly conventional possibility—that of machine–labour substitution—instead of Samuelson's fixed proportions, within every technique. We also show that, in the presence of two primary inputs, the surrogate model can give distinctly unconventional primary input use/input price relations at the level of the consumer good industry, even if the rate of interest is identically null.     

Taking Marshallian Long-Period Equilibrium Seriously

Received May 5, 2000; revised version received November 11, 2000     

The future of the working classes: a comparison between J.S. Mill and A. Marshall

Abstract

Both J. S. Mill and A. Marshall had a lifelong interest in the living conditions of the working classes and theorized the possibility of a new age, characterized by a widespread mental and moral cultivation. This paper compares the precise arguments put forward by them in the period ranging from Mill's to Marshall's Principles, against the background of the evidence of social and human progress at their times. It is argued that, at different stages and with different specific arguments, their predictions relied on self-reinforcing mechanisms, in which a better life was the cause, no less than the effect, of progress. In order to make similarities and differences more transparent from a logical point of view, two simple mathematical formulations are proposed.     

Recurrence: A Neglected Aspect of the Sraffian Critique of Marginalism

The significance of ‘reswitching’—that great symbolic issue of the Cambridge capital debates—has sometimes been denied on the ground of a low probability. This article investigates the industry‐level return, in different equilibria, of the use of one or more (or all) inputs. Such phenomena, which we call ‘recurrence’, are generically far more probable than the return of a whole economy‐level technique and can be triggered, not only by a change in the interest rate, but also by a change in relative primary input prices. Since recurrence alone, without reswitching, is damaging to standard marginalist conceptions, one should not attribute too much importance to any low ‘probability of reswitching’.     

'Interrelated prices' and Sraffa's critique of partial equilibrium

The early Marshallian literature recognized that, in most significant cases, long-period equilibrium analysis must consider families of interdependent markets which are in direct relation with each other. This perspective, which is different from both standard partial equilibrium and general equilibrium analysis, was developed mainly by two Italian authors, Maffeo Pantaleoni (1857–1924) and Marco Fanno (1878–1964). This paper is aimed at showing that this ‘interrelated prices’ literature has some points of contact with Piero Sraffa's critique of partial equilibrium analysis. It is argued that Sraffa places the case of a Marshallian decreasing returns industry in a context (rivalry for the use of a common factor in fixed supply) which was familiar to Pantaleoni-Fanno: both maintain that the markets involved are interdependent, even though they evaluate differently the possibility of a sensible equilibrium analysis.     

FORMALIZING WIESER's THEORY OF DISTRIBUTION: CONSISTENT IMPUTATION IN ALTERNATIVE THEORETICAL PERSPECTIVES

Wieser's theory of value and distribution has been formalized and interpreted mainly in the framework of efficient allocation of scarce resources. To this end, the mathematical techniques of linear programming have been used by such authors as Samuelson and Uzawa. This paper presents briefly what may be called the Knight–Samuelson–Uzawa formalization and supplements it with different proposed formalizations of some further aspects consistently developed in Wieser's works. The formalization that we propose concerns Wieser's theory of interest and his theory of value for ‘cost goods’. It is argued that in such cases the produced means of production, and not the endowments of scarce resources, are at the centre of Wieser's analysis. It is shown that some appropriately specified models in the Sraffa–von Neumann–Leontief tradition can very usefully be employed in order to strengthen Wieser's intuitive arguments and give them a sound analytical structure.