Sraffian indeterminacy: a critical discussion

Abstract

This paper is aimed at discussing Mandler's interpretation of Sraffa's price theory. In particular we will analyse Mandler's idea that an institutional determination of distribution, suggested by Sraffa, could be solidly advanced only in the case of equilibrium price indeterminacy in intertemporal sequential models. First it will be shown that this kind of indeterminacy arises from an arbitrary use of the tendency to a uniform rate of return on the supply prices of capital goods. Second, it will be remarked that, when Sraffa's contribution is placed, as it should, within the classical theory of value and distribution, no price or Sraffian indeterminacy will result. Finally, we will argue that Mandler's emphasis on the non-arbitrariness of the capital goods endowments, which is at the root of his indeterminacy result, naturally leads to refer to those normal positions of the economy whose only possible consistent determination is Sraffa's price theory. Copyright The Author 2011. Published by Oxford University Press on behalf of the Cambridge Political Economy Society. All rights reserved., Oxford University Press.