----------------- HES POSTING ----------------- In response to the discussion of Holmes, et al., David Andrews has sent me a note that Sraffa was a fan of Sherlock Holmes. I earlier stated that my interest in the potentially fruitful implications of Holmes for economic methodology came up in the process of following a hint of Adolph Lowe's regarding his instrumental analysis or instrumentalism. Lowe cited the revival of the circular view of production (Classical/Marxian reproduction models) by himself and his colleagues at Kiel University in the twenties as in his view the most important example of the heuristic search procedure at the core of what he calls instrumental inference. In fact, he later refered to Section 3 of chapter 11 of his _On Economic Knowledge_ (1965) as "the re- enactment of the 'discovery' of the circular nature of an industrial structure of production" (1969, p. 184n25; often recounted elsewhere by Lowe). Lowe and his student Fritz (Frank) Burchardt and others employed the Quesnay-Marx reproduction models in their analyses of accumulation, cycles, employment, and structural and technical change. The discovery resulted from grappling with what they considered a puzzle posed by the place (and replacement) of fixed capital in an industrial system of production. They rejected the Austrian solution of some original stage in which only labor and natural resources were used. Their solution to the puzzle appeared as a result of a clue provided in the analysis of, in their case, bread production. In specifying the input requirements for bread, one particular input stands out: "seed-wheat as an input is capable of producing two types of outputs: bread-wheat as a potential consumer good and seed-wheat as its own replacement good" (1965, pp. 269-70). Thus the technological condition for continuous production of wheat is the physical identity of the input and output, i.e., its capacity for self-reproduction. A similar condition was proposed to explain the seeming paradox of infinite regress in the replacement of fixed capital. Lowe searched for a special equipment good that was capable of producing other equipment goods as well as reproducing itself: "what we actually find is not one such mechanical instrument, but a comprehensive group which is defined as machine tools...They play the same strategic role as seed-wheat plays in agriculture" (1965, p. 270). Interestingly, Sraffa writes that the "rational foundation of the principle of the determining role of the profits of agriculture [in Ricardo's _Essay of Profits_], which is never explicitly stated by Ricardo, is that in agriculture the same commodity, namely corn, forms both the capital (conceived as composed of the subsistence necessary for workers) and the product" (Sraffa, 1951, p. xxxi). Later, in _Production of Commodities by Means of Commodities_ (PCMC, 1960, p. 93), Sraffa refers to this "method devised by Ricardo...of singling out corn as the one product which is required both for its own production and for the production of every other commodity" as analogous to the role of 'basic' products in his system. Sraffa further states that it was only after he had developed the distinction between "basics" and "non- basics" in his system that "the above interpretation of Ricardo's theory suggested itself as a natural consequence" (ibid.). It should be noted that although published in 1960, "the central propositions" of PCMC "had taken shape in the late 1920's" (1960, p. vi). Lowe first developed his approach, in which the machine tools sector plays the role of a "basic industry" in the 1920s. So: Lowe and Sraffa both worked out their ideas in the twenties and Lowe and Sraffa both revived the circular approach of the Classics and Marx but while Sraffa was addressing issues of value and distribution, Lowe was addressing issues of growth, cycles, and structural and technical change. (this should be of interest especially to those followers of Sraffa familiar with the issues regarding the "separability of the core." In addition, both Lowe and Sraffa use terms like "discovery" and "interpretation" in describing the heuristic process by which they came upon the key to the circular production models, i.e. self-reproducibility of one commodity or sector. Anyone with thoughts on this? I'd appreciate feedback. Some of this is from my unpublished Ph.D. dissertation, "Political Economics and Instrumental Analysis: Adolph Lowe's Methodological Alternative for Economic Theory and Public Policy," New School for Social Research, 1996. There's also a few more pieces to the story, but the longer I go on the better the chance this won't make it on the list. Mat Forstater ------------ FOOTER TO HES POSTING ------------ For information, send the message "info HES" to [log in to unmask]