OPE-L Preobrazhensky's multiplier

[Rakesh Bhandari <rakeshb@xxxxxxxxxxxx>]

Title: OPE-L Preobrazhensky's multiplier

> Rakesh Bhandari wrote:
> >  
> > Preobrazhensky discovered what Keynesians would later refer to as
> > the
> > 'foreign trade multiplier,' or the notion that a small increase in
> > exports might generate
> > a multiple expansion of domestic sales or forestall a multiple
> > contraction."
> > Rakesh
> He may have done so, but it is far from
> clear that he fully understood it from
> that statement.
> Nature this week reports that Hutton had
> formulated natural selection
> before Darwin, but Huttons formulation lacked the generality and
> centrality
> of Darwins. This earlier suggestions of discoveries are interesting,
> but
> dont undermine the importance of those who devote the attention to
> clearly and explicitly bringing the idea to the light of
> day.
> --

I can't remember--was Hutton  a geologist (or was that Lyell?) Was the kind of change that he explained on the basis of a quasi principle of natural selection similar to the kind of change that Darwin theorized?

At any rate, it does not seem that Preobrazhensky had a quantitatively worked out theory of the multiplier as did Kahn, but in his review of this book, James Galbraith did argue (if I remember correctly) that Preobrazhensky seemed to have anticipated many important ideas, e.g. imperfect competition.

I think the idea of a foreign trade multiplier is a bit static in the sense that the real importance of widening the market is not as a vent for a pre-existing surplus but in the dynamic economies of scale which it allows and thus the boost to profitability which it provides. Foreign trade is important not so much for the purpose of securing realization and ensuring a higher employment equilibrium but for boosting profitability.

Rakesh