Wednesday, May 2, 2012

Not entirely debauched by economics

The quote of the week (I should instate it as a policy) comes from a letter from Piero Sraffa to Joan Robinson:
"If one measures labour and land by heads or acres the result has a definite meaning, subject to a margin of error: the margin is wide, but it is a question of degree. On the other hand if you measure capital in tons the result is purely and simply nonsense. How many tons is, e.g., a railway tunnel? If you are not convinced, try it on someone who has not been entirely debauched by economics. Tell your gardener that a farmer has 200 acres or employs 10 men – will he not have a pretty accurate idea of the quantities of land & labour? Now tell him that he employs 500 tons of capital, & he will think you are dotty – (not more so, however, than Sidgwick or Marshall)."
That was in 1936. The reference comes from this paper by Velupillai on Krishna Bharadwaj’s contributions to economics.

1 comment:

  1. This provides some helpful context to Robinson's comments in her letter to Meek ("You just do it. You don't have to prove anything.") I believe it also may have something to do with Keynes's choice of man-hours as a suitable invariable measure in the GT. Thanks for posting it.

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