Advanced or postponed wage payments: Sraffa validates Marx

Marco Lonzi (), Samuele Riccarelli () and Ernesto Screpanti

Department of Economics University of Siena from Department of Economics, University of Siena

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.

Keywords: Value theory; Marx; Sraffa (search for similar items in EconPapers)
JEL-codes: B31 B51 (search for similar items in EconPapers)
Date: 2017-06
New Economics Papers: this item is included in nep-his, nep-hme, nep-hpe and nep-pke
References: View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:usi:wpaper:756

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