On the classical theory of competition

Average cost and marginal cost pricing in Marshall: Textual analysis and interpretation

“…The discontinuity between the classical notion of competition and the neoclassical perfect competition has been widely emphasized in economic literature; it has been stressed by Hayek (1948) and later endorsed and further elaborated by others (see for example Stigler, 1957;McNulty, 1967McNulty, , 1968McNulty, , 1987Harris, 1988, Backhouse, 1990; Blaug, 1997). The basic idea is that in classical political economy competition keeps its everyday-life meaning.…”

“…. [producers] in each case choose those factors of production which are best for their purpose; the sum of the supply prices of those factors which are used is, 13 Marshall's external economies seem to pertain more to the whole economy rather than to a single industry. Stigler notices: 'Marshall's external economies form an essentially historical category.…”

Freeing long‐period prices from the uniform profit rate hypothesis: A general model of long‐period positions

“…The uniform profit rate assumption in Sraffa's book has been an object of much attention and different interpretations (for recent surveys, see Blankenburg, Arena, & Wilkinson, , Salanti, ). Significant as these interpretative works are to understand Sraffa's work, the importance of the uniform profit rate assumption should be reassessed if one aims at the advancement of the theory of long‐period prices and distribution (see, for example, Dutt, ; Harris, ; Salanti, ). In fact, on the one hand, the reproducibility condition is logically autonomous from the condition of (free competition and consequent) uniform profit rate since the fulfilment of the former condition does not require the fulfilment of the latter.…”

“…Since the publication of Sraffa's book, many scholars have pointed out to the necessity to incorporate differential profit rates within the classical approach (see, for example, Duménil & Lévy, ; Harris, ; Flaschel, Franke, & Veneziani, ; Nell, ; Salanti, ), though only very few and haphazard works have been carried out so far which explicitly deal with either specific “objective” factors (see, for example, D'Agata, ; Nikaido, ; Parrinello, ) or with “idiosyncratic” factors (D'Agata, ; D'Agata & Mori, ). Thus, to the best of our knowledge, it is still lacking a general definition and a formal analysis of long‐period prices based only on the reproducibility condition.…”

“…(Ricardo, 1951, p. 90;emphases added) Thus, it is evident that, according to Smith and Ricardo, long-period prices are characterized only by the reproducibility condition and that free competition and the consequent equality of profit rates are merely incidental features of long-period positions. 4 Since the publication of Sraffa's book, many scholars have pointed out to the necessity to incorporate differential profit rates within the classical approach (see, for example, Duménil & Lévy, 1993;Harris, 1988;Flaschel, Franke, & Veneziani, 2012;Nell, 1996;Salanti, 2014), though only very few and haphazard works have been carried out so far which explicitly deal with either specific "objective" factors (see, for example, D 'Agata, 1988;Nikaido, 1975;Parrinello, 1983) or with "idiosyncratic" factors (D'Agata, 2017;D'Agata & Mori, 2017). Thus, to the best of our knowledge, it is still lacking a general definition and a formal analysis of long-period prices based only on the reproducibility condition.…”