Franklin Serrano: The change in the trend of international “commodity” prices in the 2000s, viewed from a Sraffian standpoint

Del Lunes 7 al viernes 11 de noviembre se realizó en México, organizado por en la Facultad de Economía-UNAM, en la Universidad Autónoma Metropolitana- UAM-Xochimilco y El Colegio de México, el Congreso Internacional: Crisis de la Teoría Económica y Políticas Alternativas ante la Crisis Global con la participación de Mássimo Pivetti (Italia), Alejandro Fiorito (Argentina), Gary Mongiovi (EEUU), Heinz Kurz (Austria), Aldo Barba (Italia), Amit Bahduri (India), Franklin Serrano (Brasil) y Eladio Febrero (España). Toda la actividad fue coordinada por el Profesor Alfonso Vadillo Bello.


Presentaremos aqui la  Conferencia del Profesor Franklin Serrano  y su abstract. 



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Abstract

Besides being extremely volatile,  international “commodity” prices in general (agricultural and mineral) have increased a lot in the decade 2000-2010, both in  absolute , that is in U.S. dollars and in relative terms (whether we compare commodities with international  dollar prices of manufactured prices or in terms of the overall internal price indexes of most  countries.  

The purpose of these notes to provide a preliminary attempt to understand the broad underlying causes of this marked, and to a large extent surprising, change of   trend (a change which appears particularly drastic in comparison with the two previous decades of low and falling dollar and relative prices).

We shall argue that the modern classical surplus approach, revived by Sraffa and Garegnani since the early 1960s may provide a useful analytical framework in which to base this attempt.

As it is well know, the classical   notion of price of production revived by Sraffa focuses on the objective material elements in the “cost of production” of all produced goods , including the relatively standardized foods and raw materials which are traded in international markets that are nowadays known as “commodities”. Moreover, the   theory of prices of production   brings to the fore the intimate   and  necessary  connections between costs of production and  the distributive variables.

Given this, the reason why we consider this approach useful for the question at hand is quite easy to explain . We consider that most analyses   of the recent increase in commodity prices has focused almost exclusively on the side of demand whether of final users or for speculative purposes. There has been a relative neglect of the role of short term supply constraints and more importantly of more permanent cost of production considerations.  And there is if anything an   even greater neglect of the    connection between these changes in the cost of production and in the    distribution of income.

We should perhaps also  note that this   neglect of cost of production and income distribution aspects  stands  in sharp contrast not only with the sraffian classical surplus approach but also with the analyses of the pioneers of development economics such as Singer, Prebisch and Lewis, who focused on precisely these aspects when studying the long run trends of terms of trade. 

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