The Classical approach to distribution and the “natural system”

Bellino, Enrico (2009): The Classical approach to distribution and the “natural system”.

Abstract

The modern reformulation of Classical analysis of value and distribution built upon Sraffa’s Production of Commodities provides quite a general and open framework to study distributive relationships, that deserves to be still explored. The present work aims to go through these relationships according to the perspective ensuing from the notion of “natural economic system”, developed by Pasinetti. The natural economic system is a sort of ideal configuration, which allows to accomplish the potentialities of the production system concerning growth, employment and the satisfaction of final wants. Actual (capitalist) economies do not normally fulfil the “natural” configuration. But this configuration can be considered a reference point in order to discriminate between the conditions that have to be verified for the system to reproduce itself and grow according to its potentialities, and the conditions that have to be regarded as pertaining to the institutional sphere. On this perspective several indications can be drawn on various aspects. In this work we shall focus on the normative conclusions that can be drawn about income distribution. Firstly a description of the characteristics and the implications of the “natural” configuration of income distribution will be provided: we will focus on natural rates of profit (which are differentiated among sectors), on the natural level of wages and on the natural rate of interest. Secondly we will depict some instruments to orientate the actual set-up of capitalistic economies towards the natural configuration. In particular we will develop a notion of uniform natural profit rate and we will describe the consequent necessary (“natural”) financial system which allows the natural accumulation of capital to be realized in a capitalistic context, where profit rates tend to be uniform.

• Item Type: MPRA Paper
• Language: English
• Keywords: Average natural profit rate; Classical political economy; Labour theory of value; Natural system; Natural profit rates; Prices; Sraffa framework; Structural change; Surplus approach
• Subjects: D - Microeconomics > D4 - Market Structure, Pricing, and Design > D46 - Value Theory; B - History of Economic Thought, Methodology, and Heterodox Approaches > B5 - Current Heterodox Approaches > B51 - Socialist ; Marxian ; Sraffian; B - History of Economic Thought, Methodology, and Heterodox Approaches > B1 - History of Economic Thought through 1925 > B12 - Classical (includes Adam Smith); E - Macroeconomics and Monetary Economics > E1 - General Aggregative Models > E12 - Keynes ; Keynesian ; Post-Keynesian; D - Microeconomics > D3 - Distribution > D33 - Factor Income Distribution; E - Macroeconomics and Monetary Economics > E2 - Consumption, Saving, Production, Investment, Labor Markets, and Informal Economy > E23 - Production; E - Macroeconomics and Monetary Economics > E1 - General Aggregative Models > E11 - Marxian ; Sraffian ; Kaleckian

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