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132 Piero Sraffaconnected, but can be analysed separately. This applies in particularto the quantities produced by the various industries, which Sraffa –as noted above – takes as externally given for the purposes of his analysis.Here we find a bridge reaching out in the direction of Keynes’s analysisof the possibility of persisting conditions of under-employment.The best way to approach the issue is step-by-step, considering in successionthe conception within which Sraffa’s analysis is embedded, theapplicability of ‘Say’s law’ to Sraffa’s analysis, the relationship betweenprices of production and market prices, Sraffa’s indirect reference toKeynesian theory and, finally, the bridge that can be thrown betweenthe two analyses.As we have seen, although presented in a way that is formally compatiblewith marginalist analysis (in such a way that criticism of it canbe developed from within), Sraffa’s analysis is conceived in terms ofa classical approach, albeit making a great stride ahead at the level ofanalytic rigour and with precise delimitation of the problem addressed.The classical approach revolves around the concept of surplus: itsproduction, circulation through trade, distribution among the varioussocial classes and sectors of the economy and the uses it is put to, i.e.,accumulation or consumption beyond the bare necessity. Each of theseaspects is related to the others, but for the sake of analysis it is better totake them in isolation: thus, for example, for the theory of productionwe have Smith’s analysis (and Babbage’s and John Stuart Mill’s) of thefactors determining the division of labour; we then have the theory ofvalue in connection with exchange ratios and their relationship withthe distributive variables; analyses carried out by Smith, Ricardo, Marxand various others for the theory of distribution; the classical theory ofaccumulation; and, as a separate issue, what Marx described as the problemof realisation, namely the sale of the quantities produced, with itslogical appendix, the theory of crises. In other words, we have a rangeof fields of analysis, each taking variables as given, which are to beaccounted for in other theories. This is, in fact, a procedure that Sraffafollows rigorously, leaving aside the problem of determining technologyor quantities produced, which lie upstream from his analysis, but at thesame time isolating his problem from what lies downstream, such as thequestion of realisation or the relationship between prices of productionand market prices.Given this practice, there are clearly no grounds to argue that Sraffaadheres to ‘Say’s law’, which states that ‘supply creates its own demand’.Quite simply, the problem of the relationship between quantities producedand quantities in demand – the problem of realisation – does notInterpreting Production of Commodities 133arise in Sraffa’s 1960 analysis. Therefore, there is no reason why thereshould be any automatic equilibrating mechanism connecting aggregatedemand to aggregate supply. 29Another point to clear up is involved in the distinction between naturalprices (or prices of production) and market prices, already discussedearlier (§ 3.3). Let us recall, first, that the problem of realisation comesin logical sequence after the problem addressed by Sraffa; second, thatthere is no good reason to establish any formal connection betweenprices of production and market prices (of the type of the connectionbetween long and short period to be found in Marshallian theory).Thus, there is no reason to assume that the quantities produced coincidewith the quantities in demand when prices of production prevail(Smith’s ‘effectual demand’), commodity by commodity. Obviously,this is a prerequisite for claiming that Sraffa does not adhere to ‘Say’slaw’, which concerns this equality in the aggregate, clearly implied bythe equality at a micro level. Of course, if the technology consideredin Sraffa’s analysis corresponds to what entrepreneurs consider a normalutilisation of productive capacity, such normal utilisation must berealised over the average of a number of periods, if the entrepreneurs’expectations are to be satisfied. However, even if the normal degree ofcapacity utilisation does not change over time, in the course of timeproductive capacity changes. Consequently the realisation on the average,over a span of several years, of a normal degree of utilisation ofproductive capacity, holds no implications for any of the periods takenindividually regarding the relationship between quantities taken asgiven and quantities in demand at the natural price. It should also benoted that the quantities taken as given may differ from those effectivelyproduced if the degree of effective utilisation differs from whatentrepreneurs see as normal.We may, moreover, wonder what possible reason there could be, ifnot respect for the marginalist (or, more generally speaking, subjectivist)29At first sight there would be no reason for arguing the contrary, either.However, this would violate the requirement of consistency of the conceptualframework of Production of Commodities with Sraffa’s more general conceptualframework, as expressed in many of his writings and in the Sraffa Papers. In fact,in the presence of savings and financial circuits, ‘Say’s law’ (in the interpretationnow dominant, as a proposition regarding macroeconomic equilibrium) impliesthat the rate of interest is determined by the equilibrium between demand andsupply of loanable funds, and thus implies uniqueness of the real equilibrium,also for distribution variables, in contrast with one of the mainstays in Sraffa’sanalysis.