A Reflection on Sraffa’s Revolution in Economic Theory (Palgrave Studies in the History of Economic Thought)

This book presents a substantial collection of essays from a wide range of well respected scholars addressing several aspects of Piero Sraffa's economics in light of continuing controversies over the interpretation that should be placed on his work. It moves beyond extant scholarship with an added emphasis on the philosophical dimension of Sraffa's seminal work, Production of Commodities by Means of Commodities . Contributors probe new ways of thinking about the political economy of Sraffa and in doing so, alongside the comments to each contribution by other scholars, provide a cutting edge debate and discussion on non-mainstream economic theory. This book will be of interest to academics and advanced graduate students in economics, with additional interest from scholars in philosophy and the methodology of science. Praise for A Reflection on Sraffa’s Revolution in Economic Theory Preface Contents Notes on Contributors List of Figures List of Tables Chapter 1: Interpreting the Nature of Sraffa’s Equations: A Critique of Garegnani’s Interpretation 1 Introduction 2 Adam Smith’s Basic Propositions on ‘Natural’ and ‘Market’ Prices 3 Why Was There a Change in Garegnani’s Position on the Constant Returns Assumption? 4 How Do We Know ‘Given Outputs’? 5 Why Is There No Room for the Classical Gravitation in Sraffa’s System? 6 Where Did Garegnani Go Wrong? Comment Diagram 1: A Model of Physiocracy Reply References References References Chapter 2: On Sraffa’s Structuralism 1 Introduction 2 ‘Descriptive Curves’, Positionality and Structural Emergence 3 Positional Interdependence and Functional Interdependence 4 Structural Analysis and Political Economy 5 Concluding Remarks Comment A Comment on Scazzieri’s ‘On Sraffa’s Structuralism’ Reply A Response to Ajit Sinha’s ‘A Comment on Scazzieri’s “On Sraffa’s Structuralism”’ References References References Chapter 3: On Sraffa’s Challenge to Causality in Economics 1 Foreword 2 Change and Difference 3 Determinism 4 Continuity and Structural Change 5 Interpreting Mechanical Vs. Geometrical Causality 6 The Boundaries of the “Economic Field” Comment References References Chapter 4: The Meaning of Sraffa Prices 1 Introduction 2 A Requirement of the Theory of Value 3 Viability: The Sole Foundation of Value in Sraffa 3.1 The ‘Self-Replacing’ Economic System and Viability 3.2 Standard Commodity and the Wedge Between Distribution and Prices 3.3 Sraffa Prices and Conditions of Exchange 4 A Theory of Economic Structure 5 Conclusion Comment A Comment on ‘The Meaning of Sraffa Prices’ References References Chapter 5: ‘Openness’ as a Methodological Principle of Sraffa’s Economic Thinking 1 Introduction: The Impact of Sraffa’s Thinking 2 Sraffa’s Entry Point and Challenge to Neoclassical Economics 3 Sraffa’s 1931 Manuscript and the Open-Closed Distinction 4 Gramsci and Sraffa on the Open-Closed Distinction 5 Concluding Comments: Openness as a Principle of Explanation Comment References References Chapter 6: Sraffa and Manara: The Mystery of the Last Article of Piero Sraffa 1 Introduction 2 Sraffa’s Draft 2.1 Content of the File D3/14 2.2 Transcription of the Presumed Last Version 3 Why Was It So Important for Sraffa to Answer Manara? 3.1 Content of Manara’s Article 3.2 Comments on Sraffa’s Draft 3.3 Consequences of Manara’s Findings about Sraffa’s Theory 4 Why Sraffa Did Not Publish It? 4.1 On the Mathematical Point of View 4.2 On the Economic Point of View 5 Dupertuis and Sinha’s Solution to Manara’s Problem 5.1 To Prove the Existence of a Maximum Rate of Profits 5.2 The New Method of Dupertuis and Sinha 6 Conclusion Appendix Comment Reply References References References Chapter 7: Sraffa and Wittgenstein 1 The Friendship Between Sraffa and Wittgenstein 2 The Philosophy of Tractatus 3 The Nature of the Break 4 The Nature of Sraffa’s Influence on Wittgenstein Comment Reply References References References Chapter 8: Sraffa Versus Keynes on the Method of Economics: Measurement, Homogeneity and Independence 1 Sraffa and Keynes on Measurement 1.1 Sraffa on Measurement 1.2 Keynes on Measurement 2 Sraffa’s and Keynes’s Methodology of Critique: Investigation into the Assumptions of Economic Theory 2.1 On Homogeneity Labour and Products Capital Utility Money, Money Aggregates and Index Numbers 2.2 On Independence 3 Sraffa’s Versus Keynes’s Constructive Approach 3.1 Sraffa on the Theory of Value. Real Costs: Disutility or Physical Real Cost? 3.2 Sraffa’s Search for a Physical Unit of Measure: Food Rather than Labour? 3.3 Sraffa’s Question: Is There Any Real Need of a Common Natural/Physical Unit of Measure? 3.4 Keynes’s Monetary Standard and His Money Theory of Value 4 Conclusion Comment References References Chapter 9: The Role of Sraffa Prices in Post-Keynesian Pricing Theory 1 Introduction 2 Marx’s Role 3 Effects of Systemic Constraints Comment References References Chapter 10: Garegnani’s Surplus Equation and Marx’s Falling Rate of Profits 1 Introduction 2 Labour Values and Prices of Production in Marx’s Analysis and Sraffa’s System 3 Marx’s Law of Tendency of the Rate of Profits to Fall and Sraffa’s System 4 Garegnani’s Surplus Equation 5 Generalising Garegnani’s Example 6 Discussion 7 Concluding Remarks Comment Introduction The Model and Notation The Surplus Equation The Falling Rate of Profit The Surplus Equation Reconsidered Conclusions Reply References References References Chapter 11: Sraffa’s Silenced Revival of the Classical Economists and of Marx 1 Introductory Remarks 2 Community vs Automatons 3 Some Characterizations of Adam Smith’s Wealth of Nations 4 Ricardo’s Continuity and Discontinuity with Adam Smith’s Wealth of Nations 5 The Relevance of Marx’s Capital Nowadays 6 Marx’s Steps Ahead of Adam Smith and Ricardo 7 Sraffa’s Breakthrough 8 Sraffa’s ‘Core’ 9 Some Criticisms of Economic Theory Independently of PCMC 10 Concluding Remarks Comment A Comment on Sraffa’s ‘Silenced Revival of the Classical Economists and of Marx’ References References Chapter 12: From Multipliers to the Distribution of Income: Connecting Leontief and Sraffa 1 Introduction 2 Leontief’s Formulae 3 Another View of Leontief’s Open Static Model 3.1 Extended Input Coefficients 3.2 Properties of the Extended Input Coefficients Matrix 4 The Distribution of Gross Output 5 The Distribution of Net Output 5.1 Distributing Net Output in an Extended Leontief World 5.2 The Rate of Profits and the Wage Rate in the Sraffian Price Model 5.3 The Standard Commodity 6 Numerical Illustration 6.1 The Non-linear Case 6.2 The Standard System 7 Final Remarks and Conclusion Comment Reply References References References Chapter 13: Definitions, Assumptions, Propositions and Proofs in Sraffa’s PCMC 1 Introductory Thoughts 2 Some Notes on Mathematics & Mathematicians in PCMC 3 Tentative Concluding Notes on the Prelude that is PCMC Comment References References Chapter 14: Sraffa’s Monetary Writings, Objectivism and the Cambridge Tradition 1 Introduction 2 Sraffa’s Early Writings on Applied Monetary Problems in the 1920s 3 Sraffa’s Work on Value and Distribution and the Cambridge Tradition 4 Sraffa’s Theory of Value and Distribution and Objectivism 5 Sraffa’s and Keynes’s Work on the Role of Money in the Theory of Distribution 6 Conclusions Comment References References Chapter 15: Sraffa, Money and Distribution 1 Introduction 2 An Overview of Sraffa’s Contributions 2.1 Sraffa’s Contributions: A Coherent Whole 3 Sraffa, PCMC, Money and Distribution 3.1 Importance of Money Rates of Interest: Explicit Reference 3.2 Implicit Influence of the Money Rate of Interest on the Measurement of Capital and Distribution 4 Towards a Sraffian Monetary Theory of Production and Distribution 4.1 Money in the Sraffian Schemes: Some Motivations 4.2 Marx, M–C–M and the Capitalistic Mode of Production Appendix A: Sraffian Schemes and Distribution Production and Methods of Production Surplus to Be Distributed Self-Replacing Prices Number of Equations and Number of Variables Net National Income in a Self-replacing System The Share between Workers and Producers of the Surplus in Value Terms Distribution of the Surplus to Industries and Workers: Value and Physical Terms Indeterminacy or Exogeneity Appendix B: Incorporating Credit and Debt Inside a Sraffian Framework: An Outline Comment Reply References References References Chapter 16: From Ricardo to Sraffa: A Quest for a Modern Classical Standpoint on Money 1 Introduction 2 Sraffa’s Theory of Price and Ricardo’s Theory of Money 2.1 Money, Market Prices, and the “Cantillon rule” 2.2 The Quantity of Money and the Market for Gold Bullion 3 From Ricardo’s Standard of Money to Sraffa’s Standard in Which to Fix a Debt 3.1 Ricardo’s and Sraffa’s “standard commodity” 3.2 Money, Gold, or Fresh Fish: In Which Standard to Fix One’s Debt? Comment The Specificity of the Gold Market Smith-Thornton’s Arbitrage Comments What About a Relation with Sraffa’s Natural Prices? No Contradiction to be Found When Gold is Domestically Produced Some Puzzling Consequences of Gold Being Produced Abroad Reply The Compatibility between Sraffa’s System of Prices and Ricardo’s Theory of Money The Divergence of the Market Price of the Standard from its Legal Price Can There be a Divergence? What Happens in Case of Divergence? The Necessary Exteriority of the Standard Sraffa’s Theory of Prices and Classical Theory of Money References References References Chapter 17: Sraffa and the Revenue of the Owner of Non-Renewable Natural Resources: A Note on the Literature 1 Introduction 2 Differential Rent 3 Depreciation of Wasting Assets 4 The Hotelling Rule 5 Rent as a Share of the Product 6 Conclusion Comment Reply References References References Chapter 18: Antonio Gramsci’s Letters that Piero Sraffa did not Forward to the Italian Communist Party 1 Piero Sraffa and Antonio Gramsci 2 Piero Sraffa, Tatiana Schucht and Gramsci’s Letters 3 The Letters of 5 December 1932 and 27 February 1933 4 Two Disasters 4.1 The First Disaster and Gramsci’s Letters from mid-April to mid-July 1933 4.2 The Second Disaster and Gramsci’s End of September to End of November 1933 Letters 5 Looking Out for Gramsci’s Best Interests References Index