On Sraffa’s Prices: A Rejoinder to Sinha

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This article refers to:

A Response to ‘On Sinha’s View of Sraffa’s Revolution in Economic Theory’

Acknowledgments

I would like to thank Roberto Ciccone, Saverio Maria Fratini, Heinz D. Kurz, Gary Mongiovi and Franklin Serrano for their comments and suggestions.

Disclosure statement

No potential conflict of interest was reported by the author(s).

Notes

1 Sraffa’s unpublished manuscripts are held at the Wren Library, Trinity College, Cambridge; the manuscripts are cited using the classification system of the Wren’s catalogue of the collection.

2 This argument was later abandoned by Sraffa. He did not, however, abandon the idea that workers and capitalists may act mechanically without making utilitarian calculations.

3 According to Sraffa, the usefulness of this assumption for his readers would stem from the fact that, both in a partial or general equilibrium analysis, this condition is associated with perfect competition, with which the classical notion of free competition was still identified.

4 Note that this possibility was not denied by the classical economists and Marx (cf. for example, Marx 1894, pp. 139–140; and Smith 1776, p. 272). This implicitly answers one of the questions addressed by Sinha to his readers at the end of his reply. What Sraffa takes as given are the methods of production, and therefore, he does not deny the possibility that prices change even in the presence of small changes in output provided that they lead to a change in the methods of production. As he wrote to Garegnani (D3/12/111: 150): ‘Have I not said in the Preface that I do not assume constant returns? [Non ho detto nella prefazione che non suppongo rendimenti costanti?] So, they [the prices] can change!’ What Sraffa rejected is any a priori general relation between output and prices.

5 On Sraffa’s metaphor of a ‘photograph’ of the economic system, see Levrero (2019) and Kurz and Salvadori (2018).

6 I take the occasion of this rejoinder to note that Sinha often plays with the words of his critics without asking himself their real meaning. An example of this is his astonishment at my surprise over his criticism of Garegnani’s interpretation of the classical wage theory (cf. Levrero 2012). But my surprise is hardly ‘astonishing.’ It stems from what is written in Sinha (2010) a few lines before his criticism of Garegnani, namely, that the latter was right when he distinguished the neoclassical supply and demand curves from those expressed in terms of rates of change in the demand and supply of labour which may be found in Paul Samuelson’s Canonical Classical Model (1978). On this point, see Levrero (2012 and 2018).

7 More generally, Sraffa refers to the law of indifference, as in the aforementioned manuscripts Difference v. Change and the one about rent dated December 1942.

8 For another example of the same kind, see D3/14/59 where Sraffa refers to a uniform wage rate for the same kind of labour as established by the market.

9 See also D3/14/27 where Sraffa wrote: ‘Industry II cannot face competition from industry I at any price and rate of profit: it must succumb [L’industria II non può far fronte alla concorrenza della industria I a nessun prezzo e nessun saggio del profitto: deve soccombere]’