Piero Sraffa - Free

116 Piero Sraffareturns: Sraffa’s analysis may be considered as internal to the theoryof general economic equilibrium solely to this end. 4 One point must,however, be made quite clear here: when we move on from criticismof marginalist theory to reconstruction of the classical approach, thehypothesis of constant returns must be abandoned. It is this, we mayinfer, that Sraffa has in mind when he repeats that ‘no changes in output[…] are considered’ or, in other words, the quantities produced bythe various industries are given.7.2 The clash between the classicaland marginalist approachesProduction of Commodities by Means of Commodities constitutes botha critique from within the marginalist approach and a contributionwithin the classical approach. This is possible because certain logicalrelations between economic variables must hold in any case; however,they occur in different contexts, as attested by the fact that the hypothesisof constant returns is necessary if we are to read these propositionsin the context of marginalist theory, while it is not if we read them asa part of classical theory.The point emerges more clearly if we turn our attention to the basicdifferences between the classical and marginalist approaches, consideringthem as two ‘paradigms’ (in the sense suggested by Kuhn 1962) expressingtwo different conceptions of the way the economic system works.It is a difference that Sraffa points up in the conclusion of his book, inAppendix D, ‘References to the literature’. Here, as already recalled, Sraffacontrasts ‘the picture of the system of production and consumption as acircular process’, characterising the classical approach, ‘to the view presentedby modern theory, of a one-way avenue that leads from “Factorsof production” to “Consumption goods”’ (Sraffa 1960: 121).4In this respect, it is worth pointing out that Sraffa himself refers to Part III ofhis book, dedicated to the ‘switch in methods of production’, as an exceptionwith regard to the absence of any hypothesis on returns. There we must, in fact,consider changes – albeit only notional – ‘in the proportions in which differentmeans of production are used by an industry’ (Sraffa 1960: v). However, essentialas it is for criticism of the traditional marginalist theory of value and distribution,this part is of minor utility in understanding the phenomena of technologicalchange. To this end it is more useful to adopt a dynamic evolutionary approach,as did the classical economists from Smith’s theory of the development of thedivision of labour to Babbage’s 1832 theory of the links between division oflabour and mechanisation. Cf. Corsi (1984); Sylos Labini (1984, Chapters 3and 4); Sylos Labini (1993).Interpreting Production of Commodities 117These expressions sum up the radical differences in the ‘vision’ of theeconomic world, both in the conceptual apparatus used to represent itand in the theoretical structures built on those bases.Let us begin with the classical approach. The economic system isbased on the division of labour, which does not derive from differencesin the original individual endowments of resources but ratherfrom the intrinsically social nature of human beings. 5 The division oflabour is both macroeconomic, i.e., between sectors, and microeconomic,i.e., within each production process. 6 As a result of the macroeconomicdivision of labour, each economic subject – whether individual or firm –must at the end of the production process enter into relations ofexchange with other economic subjects to obtain the wherewithal tosurvive and relaunch the production process. In the economic system asa whole, the quantity of each commodity produced is usually morethan enough for these purposes. 7 That portion of the total output thatexceeds the strict needs of reproduction – the surplus – may be channelledinto consumption exceeding subsistence or into investments, the choicehere being associated with the way in which the value of the surplusis distributed between the various economic subjects. 8 Thus exchange5Smith, who insisted on this point in the Wealth of Nations, came in for severecriticism from Pownall (1776) in this respect: cf. Roncaglia (2001, Chapter 5;2005, Chapter 4). According to the marginalist conception (and Pownall mightbe considered a precursor of it from this viewpoint), by contrast, the division oflabour arises from differences in the abilities of the various workers. To assumethe original endowments of abilities of the different individuals as a given datumof the analysis is in fact a requirement stemming from the very structure of marginalistanalysis based on a ‘one-way avenue’ representation of the economy.6Analysis of the division of labour can be carried out from various viewpoints.For example, the distinction between the horizontal and vertical division oflabour is relevant to analysis of the link between technological change and evolutionin the social structure. Moreover, the microeconomic division of labour(or organisational division of labour) is itself a source of the macroeconomicdivision of labour: consider the case of certain areas of activity externalised byfirms, giving rise to new firms. On these points cf. Corsi (1991).7Strictly speaking, this applies to a closed economic system. For an economyopen to international trade, we might see exchange between domestic and foreigncommodities as an additional production process, with a procedure similarto the closure of input-output tables.8Let us remember that product, total means of production and surplus are allsets of physical quantities of different commodities, which can be represented inmathematical terms by vectors in the space of commodities. The distribution ofthe surplus (between social classes and between sectors) occurs in terms of value,and is thus connected to the determination of exchange ratios (values) for thecommodities.