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102 Piero Sraffathat the difficulties in capital theory stemming from the existence ofa multiplicity of commodities cannot be overcome by shifting to apresentation of the technology in terms of dated labour inputs: if nonew restrictive assumption is in one way or another introduced in theshift, such difficulties cannot but reappear in the latter presentationas well. 7 Second, what is analysed with the reduction to dated quantitiesof labour are the implications of a given technology, ruling at agiven moment in time: the presence of dated quantities is an analyticalconstruct, which does not correspond to periods of historical time.Comparison between two different technologies is simply an exercisein static comparative analysis. 8Analysis of what Hicks calls ‘traverse’, namely the transition betweentwo different technologies, involves either historical analysis, leavingaside any attempt at theoretical construction, or an exercise in comparativestatic analysis: the comparison, that is, between an initial anda final equilibrium. The latter case implies that there must be a uniqueequilibrium both in the initial and in the final position. Also, analysisof the ‘out of equilibrium’ transition between the two techniquesrequires specific assumptions concerning the ‘laws of movement’ of thevariables out of the equilibrium position, which in turn can give definiteresults only under restrictive assumptions. Typical in this respect isthe (usually tacit) assumption of no basic commodities in the model – anassumption even more restrictive than that of a one-(basic)-commodityworld.Even in the presence of just one basic commodity, the series oflabour inputs is potentially infinite: the residuum of commodities,though small as we like, can never be fully eliminated; however small,it becomes all-important in the determination of the price system whenthe rate of profits is at its maximum. This leads us to conclude that,7For illustration of how Hicks’s (1973) simplifying assumptions allow him to circumventreswitching and other problems in capital theory, and more generallyfor a detailed analysis of his book, cf. Burmeister (1974).8In modern terminology, it is common to place Böhm-Bawerk’s theory amongthe analyses of intertemporal equilibrium due to the fact that the rate of interestis interpreted, on the consumption side, as a rate of intertemporal preference.However, on the side of production the choice between alternative techniques(represented by different lengths of the production period and the correspondingdifferent levels of productivity: more ‘roundabout’ techniques are assumed to bemore productive) takes place on the basis of a given – hence static – technicalknowledge. Thus, intertemporal equilibrium is a static construct, being determinedwith reference to a given state of technology, and so to a given momentin time.Critique of the Marginalist Approach 103while the simultaneous equations method and the series of dated labourinputs can be considered as equivalent ways of representing technology,9 the former method is safer. In other words, no result derived underthe second method that cannot also be reached by the simultaneousequations method can be accepted as having full generality in a multicommodityworld with basic commodities.6.3 Critique of capital as a factor of productionThe traditional marginalist theories (those theories that Keynes misleadinglycalled ‘classical’, pointing as an example to Pigou’s analysis)have as their central tenet the thesis that an economic system whereperfect competition prevails, externalities are absent and which is notsubject to repeated exogenous disturbances, tends to an equilibriumposition endowed with characteristics of Pareto optimality, in thesense that it is not possible to improve the position of any economicagent without worsening the position of some other. In particular,traditional marginalist theories maintain that under perfect competitionreal wages move towards a level which ensures equality betweendemand and supply of labour, or in other words full employment.Among the automatic equilibrating mechanisms bringing the economytowards full employment, traditional marginalist theories stress theflexibility of the capital–labour ratio: if the real wage falls under thepressure of unemployment, firms will find it more profitable to adoptproductive techniques with a lower capital–labour ratio, so that a givenendowment of capital becomes compatible with the employment ofan increasing number of workers; increase in real wages and the consequentfall in the capital–labour ratio proceeds until full employmentis reached.This thesis takes different forms with authors belonging to differentstreams of the marginalist approach. Garegnani (1960) examines thetheories developed by a few representative writers within this tradition(Walras, Böhm-Bawerk, Wicksell), bringing out explicitly the criticismsformulated in their most essential terms in Sraffa (1960). Here it is alsoworth pointing out that Sraffa’s critique is more general than that developed(on at least partly parallel lines) by Joan Robinson (1953), whodirectly refers to the aggregate notion of capital used in the so-calledaggregate production function. Sraffa’s critique of marginalist theoriesrefers more generally to the very idea that the ‘prices’ of ‘factors of9For a clear illustration of this fact, cf. Kurz and Salvadori (1995, Chapter 6).