Piero Sraffa: economic reality, the economist and economic theory: an interpretation

Abstract

We carry out a textual analysis of Sraffa's main published contributions to pure economics in order to elaborate a rational reconstruction of an aspect of Sraffa's implicit methodology which has not yet been duly investigated. We refer to the threefold relationship between ‘economic reality’, ‘the economist/observer’ and ‘economic theory’. We elucidate the constraints which, for Sraffa, should bind the economists' arbitrariness and we trace the elements of continuity and evolution from the 1925–6 critique of Marshallian economics to Production of Commodities.

Keywords:

• Piero Sraffa
• methodology
• theory of value
• laws of returns
• marginalism
• classical economics
• joint production

ACKNOWLEDGEMENTS

We would like to thank without implicating Heinz D. Kurz, Maria Cristina Marcuzzo, Nerio Naldi, Alessandro Roncaglia, Annalisa Rosselli and two anonymous referees of this Journal for their detailed comments and suggestions.

Notes

1. The same attitude surfaces in private correspondence. In a letter to Keynes, dated 6 June 1926, Sraffa writes: ‘of course, in reality the connection between cost and quantity produced is obvious’ (quoted in Roncaglia 1978: 12).

2. Sraffa's archive at Cambridge reveals that Sraffa from the 1920s onwards cultivated a deep interest in the contemporary developments in the fields of natural sciences (especially physics and mechanics) and philosophy of science. He extensively read Bridgman, Poincaré, Russell, Whitehead, etc. In particular, quantum physics may have been a source of inspiration for Sraffa. As remarked by Kurz, ‘quantum physics introduced the possibility that the observer's mind affects the reality he sees. Quantum theory tells us that nothing can be measured or observed without disturbing it, so that the role of the observer is crucial in understanding any physical process’ (Kurz 2004).

3. The exploration of the Sraffa Papers in the Wren Library shows that this was also the intellectual path followed by Sraffa himself in 1927. The equations explored in Chapter I are called ‘first equations’ and Sraffa discovers that those equations cannot be used when there is a surplus since otherwise the equations are ‘contradictory’ (D3/12/2: 32–5) and ‘the problem is overdetermined’ (D3/12/11: 17, see Kurz and Salvadori 2001: 262).

4. As stressed by Sraffa, to rescue necessaries from the limbo of non‐basic products it would be necessary to ‘separate the two component parts of the wage [subsistence and share of the surplus] and regard only the “surplus” part as variable; whereas the goods necessary for the subsistence of the workers would continue to appear, with the fuel, etc., among the means of production (pp. 9–10)’. Sraffa just hints in this direction but he prefers to stick to the more traditional notion of wages as being wholly variable (see Roncaglia 1978: Ch. II).

5. Sraffa is highly concerned with the empirical relevance of these concepts as is witnessed by the attention he pays to pick up concrete objects from the economic reality. Sraffa, in fact, first introduces commodities which ‘are not used … in the production of others’ (p. 7). Such commodities cannot play any role in the determination of ‘the price‐relations of the other products and [of] the rate of profits’ (pp. 7–8). Then the same argument is extended to commodities which ‘are merely used in their own reproduction, either directly (e.g. racehorses) or indirectly (e.g. ostriches and ostrich‐eggs) or merely for the production of other [non‐basics] (e.g. raw silk)’ (p. 8).

6. Moreover, in the course of the same letter, in relation to the possibility of some non‐basic commodities fetching negative prices Sraffa writes: ‘how rare (if any) such cases must be in the real world. […] I certainly failed to discover any faintly realistic example of this which I could use, and had to invent those “beans”’ (ibid.; emphases added). The wording of this letter clearly shows how, in private correspondence, the mature Sraffa refers to economic reality in a way which is close to that used in his early papers.

7. See Salvadori (2000) for a detailed analysis of the way followed by Sraffa to justify this assumption.

8. This assumption, peculiar as it may seem at first sight, is however no less ad hoc than the assumption of free disposal. In fact, the latter is equivalent to the assumption that for each process producing a given product there exists another process which is exactly identical to the first one except that the product under consideration is not produced.