Sraffian price equation

This weakening of the relationship between value and price is taken further by Steedman (1977) in his Marx after Sraffa. Core to this approach is the Sraffian price equation... 

Furthermore, it follows from (8.2) that the money rate of profit is determined by the physical picture of the economy as represented by the technical coefficients and the real wage in the Sraffian price equation. Steedman (1977 66) argues that value magnitudes are irrelevant to the proximate determination of the profit rate and of production prices, and hence the labour theory of value is redundant. 

Hence, Foley (1982 42) argues, the most central of Marx s claims about the transformation of values into prices of production, that profit arises from unpaid labour time, is sustained. .. A direct correspondence is established between surplus value and money profits. This holds regardless of how prices are determined, including the Sraffian price equation (8.2). Moreover, prices can systematically deviate from values without damaging this aggregate relationship. Even if the money price of goods consumed by workers deviates from the labour embodied in these commodities, which Foley argues renders the traditional labour embodied definition of the VLP irrelevant, the value-form definition of VLP is completely operational. 

Since pF = r(pAX + wlX), it is straightforward to derive (8.7) from the Sraffian price equation.5 The Sraffian price system can be easily made consistent with our macro monetary multiplier. 

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See also in sourсe #XX -- [ ]

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