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72 Piero Sraffaplan that would yield proportional growth 21 with prices such as to yielda uniform rate of profits in all sectors.Sraffa’s system appears to suggest that the central planner concernedwith the setting of prices could limit intervention in the first instancesolely to the basic products in the system. However, these are to be consideredall together, because of the interdependence that exists amongtheir several processes of production. The fixing of the prices of the nonbasicproducts, including wage goods, can then be considered in a secondstep, taking as given the prices already determined for basic products.Additionally, if for any reason the price of any commodity is set at a leveldifferent from its ‘price of production’, this will directly or indirectlyaffect the cost of production of all the other commodities, if the commodityin question is a basic product. If, on the other hand, the good isnon-basic, there will be no effects on the costs of production of the othergoods, or at the most on a limited number of connected non-basic goods.For the same reasons, taxes and subsidies on non-basic products in a marketeconomy should not in themselves cause repercussions on the entiresystem of relative prices. There may be only indirect effects occurring ifsuch taxes or subsidies induce changes in income distribution.Let us return to a centrally planned system, with the objective of a uniformrate of expansion in all sectors. In this case, the planning of the quantityof wage goods to be produced cannot be overlooked (nor, in general,can the quantity of consumption goods) even in the first instance. Indeed,as has already been seen, the quantity of labour employed must grow atthe same rate as the other means of production; under the assumption ofa constant real wage, we also need a growth of consumption equal to thegeneral rate of growth of the system taken as a whole.If the objective of uniform growth in all sectors is abandoned, theproblem can be restricted to determining the levels of production correspondingto a target net product composed of the various commodities.In this case, we can use a well-known dual relationship to that applicablefor the determination of prices. In fact, the levels of activity of non-basicindustries required to obtain a given net output of these commoditiescan be determined anterior to the levels of activity of the basic productindustries, which can then be determined subject to the levels set forthe former group of industries. 22 What should be pointed out in this contextis that in the planning of outputs, wage goods can be treated just as21Suppose that the economic system is already on such a path at the momentconsidered.22For example, cf. Zaghini (1967a: 262–3).Basic and Non-Basic Products 73basic products, since labour is required for all productive processes: thelevels of output of those sectors producing wage goods are determinedsimultaneously with the levels of output of the technologically basicindustries, subordinately to the levels of activity of the industries producingluxury goods, when target outputs have been set for them.The same example can be used to understand the limits of applicabilityof the distinction between basic and non-basic products. The crucialassumption is that of a given technology. If there is a change in thetechnique adopted in one or more industries, the composition of thegroup of basic products may change. Commodities that were previouslyconsidered basic could become non-basic in the new technological conditionsand vice versa.Consider, as an example, a system that produces two commodities,wheat and coal. Each of these commodities is required as a means of productionfor both commodities. If there were a change in the technique ofproduction employed in the industry producing wheat, such that it couldbe produced under the new conditions without the use of coal as aninput in production, then wheat would become the only basic product inthe system. Coal, which had previously been a basic product, would nowbe classed as a non-basic product. If the example is then reversed, withthe technique for wheat production changing so as to newly require coalas a means of production, the change turns out to be from a system withone basic product (wheat) to a system with two basics (wheat and coal).It is also possible for the technique behind a basic product to bechanged with the introduction of a new machine which had not previouslybeen produced in the system. In such a case a commodity notpreviously present in the system, namely the new machine, becomes abasic commodity.The distinction between basic and non-basic products is thus strictlyvalid only within the limits of the assumption of unchanged techniquesof production, and can therefore be used in the context of a dynamicproblem only with the greatest caution. Rigorous use of Sraffa’s distinctionis only possible within the limited confines of the theoreticalproblem proposed by Sraffa, namely the determination of prices of productionand of their relationship with distributive variables.4.7 The effect of taxes on basic, non-basic and wage goodsIn conclusion, the Sraffian notion of basic products, though rooted inBritish classical political economy, implies a substantial modification tothe conception in which basic products were simply identified with the