112 <strong>Piero</strong> <strong>Sraffa</strong>The growing remoteness of such analyses from real world issues onthe one hand, and from theoretical rigour on the other, opens theway to the revival of an approach alternative to the marginalists’: theclassical approach, enhanced through assimilation of Keynes’s ideas.Chapters 7 and 8 consider some aspects of, and some contributionsalready made to, such an alternative approach.7Interpreting Productionof Commodities by Meansof Commodities7.1 Interpreting <strong>Sraffa</strong>: The assumption of given quantitiesNearly 50 years have passed since Production of Commodities by Meansof Commodities was first published, but interpretation of the text stillarouses lively debate. Any particularly concise dissertation – and<strong>Sraffa</strong>’s certainly is – may be open to various interpretations, but theextraordinary precision of <strong>Sraffa</strong>’s prose should leave little room formisunderstanding. Nevertheless, some misunderstanding did arise froman additional difficulty, namely the radical difference between his typeof analysis and the lines of argument customarily followed by the vastmajority of contemporary economists. <strong>Sraffa</strong> himself refers to the problemin the opening lines of his book:Anyone accustomed to think in terms of the equilibrium of demandand supply may be inclined, on reading these pages, to suppose thatthe argument rests on a tacit assumption of constant returns in allindustries.(<strong>Sraffa</strong> 1960: v)Two related themes emerge from this short passage (and from thepages that follow it). In the first place, <strong>Sraffa</strong> suggests that at least twocategories of economists exist: those who are ‘accustomed to think interms of the equilibrium of demand and supply’, and those who arenot. Secondly, <strong>Sraffa</strong> points out that a crucial difference between thesetwo groups of economists – or between these two approaches, paradigmsor theoretical frameworks – lies in the role that the quantitiesproduced play in the analysis of prices and their relationship to incomedistribution.113
114 <strong>Piero</strong> <strong>Sraffa</strong>In his analysis <strong>Sraffa</strong> is quite unequivocal on the point that he takesthe quantities produced as given. Thus he is able to consider as giventhe techniques of production, while avoiding any assumption onreturns to scale. 1 In a text of exemplary concision, he actually repeatshimself to stress the point:No changes in output and (at any rate in Parts I and II) no changesin the proportions in which different means of production are usedby an industry are considered, so that no question arises as to thevariation or constancy of returns. The investigation is concernedexclusively with such properties of an economic system as do notdepend on changes in the scale of production or in the proportionsof ‘factors’.(<strong>Sraffa</strong> 1960: v)For <strong>Sraffa</strong> the point is not only crucial, but also a potential source ofmisunderstanding. It is, indeed, an assertion that can hardly go downwell with readers taking demand and supply equilibrium theory to theirperusal of the book. For such readers – the overwhelming majority ofcontemporary economists – it is easier to see Production of Commoditiesby Means of Commodities as half (the half they consider the supply side)of a system of general economic equilibrium. Indeed, flying in the faceof these explicit statements (which, moreover, are not obiter dicta butthe pondered opening to a deeply pondered text), a number of economistshave advanced this interpretation. 2This interpretative mistake re-evokes the error Marshall made in relationto the theory of Ricardo, and of the classical economists in general.Marshall, as we well know, held that they were aware of only one ofthe two ‘blades of the scissors’ determining price – the supply side, butnot the demand side. 3 In this case, too, classical analysis was rendered1Cf. earlier, §§ 3.3–3.5, and Bellofiore-Potier (1998: 94–5).2Cf. for instance Johnson (1962); Robinson (1961); Hahn (1982). Joan Robinsondid, however, eventually modify her interpretation: cf. Robinson (1978: 122).3Cf. in particular the appendix to Marshall’s Principles (1961: 813–21; here wefind – on p. 820 – the famous reference to the blades of scissors: ‘The “cost of productionprinciple” and the “final utility” principle are undoubtedly componentparts of the one all-ruling law of supply and demand; each may be compared toone blade of a pair of scissors. When one blade is held still, and the cutting iseffected by moving the other, we may say with careless brevity that the cuttingis done by the second; but the statement is not one to be made formally, anddefended deliberately ’.). For <strong>Sraffa</strong>’s critique of Marshall’s economics, cf. above,Chapter 1.Interpreting Production of Commodities 115comparable to analysis in terms of demand and supply equilibrium byintroducing the assumption of constant returns. Such an assumption,however, cannot be held to represent a general constitutive elementof classical analysis: the classical economists had quite different ideasabout returns to scale, and moreover conceived them in the context ofa dynamic analysis. Let us recall, for example, Smith’s ideas about therelationship connecting division of labour (and hence productivity)to the size of the market, or the role played by decreasing returns inagriculture in determining land rent in the analyses of Malthus, West,Torrens, Ricardo and others.<strong>Sraffa</strong> foresaw quite clearly that the same error would once again cropup in connection with his own analysis. Indeed, he appeared readyto accept the inevitable, though up to a point. If you really cannothelp reasoning in terms of demand and supply equilibrium, he says ineffect, then go on and assume – but only as an initial step – that I amconsidering the case of constant returns: ‘If such a supposition is foundhelpful, there is no harm in the reader’s adopting it as a temporaryworking hypothesis. In fact, however, no such assumption is made’.(<strong>Sraffa</strong> 1960: v: these lines come between the first and second of the twopassages quoted above.)Here a problem arises. If the hypothesis of constant returns constitutessuch a dangerous misunderstanding, how can <strong>Sraffa</strong> possibly deemit acceptable for the first few steps?Luckily, the answer here is simple enough. The fact is that <strong>Sraffa</strong>’saim in writing Production of Commodities by Means of Commodities wastwofold. On the one hand, he set out to provide the ‘prelude to acritique of economic theory’, as indicated by the subtitle (where ‘economictheory’ means ‘the marginal theory of value and distribution’, as<strong>Sraffa</strong> himself takes care to specify in his Preface: <strong>Sraffa</strong> 1960: vi); at thesame time, on the other hand, he intended to solve certain analyticalproblems – in particular the link between relative prices and the distributionof income – that the classical economists left unsolved, andwhich contributed to the crisis of the classical approach and thus tothe rise to dominance of the marginalist approach. Now, those broughtup in the marginalist tradition must first of all learn to recognise thelogical difficulties inhering therein; only then will it prove useful to discoverthat the classical approach does not collapse simply because thelabour theory of value does not hold. But criticisms – or the premisesfor a critique – of the marginalist theory of value and distributioncan perfectly well be advanced, studied and discussed referring to oneparticular case of marginalist theory itself, namely that of constant
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Piero SraffaAlessandro Roncaglia
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ContentsList of FiguresIntroduction
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Introduction ixWith this degree of
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2 Piero Sraffa(1874-1961), professo
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6 Piero Sraffarevaluation of the li
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- Page 13 and 14: 14 Piero Sraffa1.4 Imperfect compet
- Page 15: 18 Piero SraffaIn many fields of ec
- Page 18 and 19: 24 Piero SraffaAn Italian in Cambri
- Page 20 and 21: 28 Piero Sraffanot something fixed,
- Page 22 and 23: 32 Piero Sraffamonetary factors on
- Page 24 and 25: 36 Piero Sraffapartnered in his lab
- Page 26 and 27: 40 Piero SraffaActually, there was
- Page 28 and 29: 44 Piero Sraffadistribution of the
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- Page 32 and 33: 52 Piero Sraffathe other hand, the
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- Page 38 and 39: 64 Piero SraffaA line of argument s
- Page 40 and 41: 68 Piero Sraffathe system stemming
- Page 42 and 43: 72 Piero Sraffaplan that would yiel
- Page 44 and 45: 76 Piero Sraffaproduced less quanti
- Page 46 and 47: 80 Piero Sraffaterms of labour comm
- Page 48 and 49: 84 Piero Sraffaof value is, and mus
- Page 50 and 51: 88 Piero Sraffabeing invariant to c
- Page 52 and 53: 92 Piero Sraffa(variable plus const
- Page 54 and 55: 96 Piero Sraffaconsumption goods),
- Page 56 and 57: 100 Piero Sraffadirectly required f
- Page 58 and 59: 104 Piero Sraffaproduction’ (iden
- Page 60 and 61: 108 Piero SraffaCritique of the Mar
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- Page 66 and 67: 120 Piero SraffaFurthermore, the cl
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- Page 70 and 71: 128 Piero SraffaSraffa raised again
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- Page 74 and 75: 136 Piero SraffaThe bridge between
- Page 76 and 77: 140 Piero SraffaSraffa’s work for
- Page 78 and 79: 144 Piero SraffaThis debate is stil
- Page 80 and 81: 148 Piero SraffaObviously the ‘Ma
- Page 82 and 83: 152 Piero SraffaIn comparison to th
- Page 84 and 85: 156 Piero Sraffaof the path actuall
- Page 86 and 87: 160 Piero SraffaHowever, this const
- Page 88 and 89: 164 ReferencesReferences 165——
- Page 90 and 91: 168 ReferencesReferences 169Levhari
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- Page 96: 180 IndexIndex 181Marx K., 10, 29,