Piero Sraffa - Free

4Basic and Non-Basic Products4.1 Basics, non-basics and wage goods: Sraffa and the classicsIn Production of Commodities by Means of Commodities Sraffa proposesand resolves a number of specific but important problems, thereby contributingto the development of the classical approach and bringing tolight elements which differentiate his analysis from the marginalist theoryof value and distribution. Two of these problems will be investigatedin the present chapter and in the following one. The first concerns thedistinction between basic and non-basic products, namely betweencommodities that enter directly or indirectly as means of production inevery and each process of production, and commodities which do notserve as means of production or which are used, directly or indirectly,only in a limited number of processes. The second is the construction ofthe standard commodity, a composite commodity with special characteristicsthat make it particularly suitable for use as a measure of value.The differences between Sraffa’s theory, based on physical costs ofproduction and a circular flow of production and consumption, andthe subjective marginalist approach are thus eloquently highlighted;at the same time, the roots of Sraffa’s frame of reference in the theoriesof the British classical economists and Marx, which at first sight mightseem obvious, will require careful investigation if the relationship is tobe made sufficiently precise.Analysis of the standard commodity, and of the distinction betweenbasic and non-basic products, will help us to a better understanding of thesimilarities and differences between Sraffa’s line of enquiry and classicalpolitical economy. As we shall see, in Sraffa’s contribution analytic refinementis accompanied by important modifications in the very conceptualframework underlying the analysis. In fact, Sraffa not only offers solutionsBasic and Non-Basic Products 61to these problems, but at the same time implicitly highlights the limitationsof the solutions proposed by the classical economists, thereby givingmore precision to the definition of the problems themselves. As will beseen in the next chapter, this is especially evident with regard to the secondproblem, the search for an invariable standard of value, in relation towhich Sraffa develops the notion of the standard commodity.Reference to the classical economists also allows for a better understandingof the way the problems mentioned above relate to the theoryof prices, and yields some interesting indications concerning the limitsintrinsic to the solutions proposed by Sraffa. This is especially true inrelation to the first problem at hand, the distinction between basic andnon-basic products, which is our main concern in this chapter.The most apparent difference between Sraffa’s analysis and that of theclassical economists, in terms of the two questions under investigation,lies in the treatment of wage goods. They constitute the central nucleusof the classical system of price determination, but are relegated to asecondary role as non-basic products within Sraffa’s analysis, althoughwith important qualifications. This difference stems mainly from differencesconcerning the determination of the distributive variables, thewage rate and the rate of profits.The classical economists generally considered the wage as fixed at subsistencelevel; it could thus be taken as given in physical terms. Sraffa, onthe other hand, allows for the possibility that workers participate in thedistribution of the surplus produced in the economy with a (variable)real wage rate above the subsistence level; at the same time he considersthe rate of profits as given independently of the price system, so that thewage turns out to be a dependent variable in his analysis. 1 The analyticalimplications of this difference, as will be seen, relate to issues whichmay be taken as matters of economic policy. However, a great deal ofcaution is advisable in such exercises, and the reader should consider theexamples concerning policy issues presented in the following discussionof use only insofar as they serve to elucidate the analytical consequencesof various assumptions on the method of wage determination.4.2 The classical distinction between necessaries and luxuriesThe distinction between ‘necessaries’ and ‘luxuries’ (according to theterminology in use at the time) was introduced by the British classicaleconomists in order to differentiate between those commodities1Cf. Sraffa (1960: 33).60