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Piero Sraffa’s Use of the History of Economic Thought in the Cambridge Lectures

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Abstract

Attention to the history of economic thought and its connection with historical and political conditions played a crucial role in the evolution of Sraffa’s theoretical positions. Sraffa insisted on the importance of this methodological approach to the study of economic theory in his first lectures on advanced theory of value, delivered at Cambridge in the late 1920s. He saw the evolution of economic theory as the result of attempts by economists to deal with ‘practical problems’ and affected as such by the ‘disturbing elements’ of ‘opposite interests’ supporting different solutions. This view still deserves attention.

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Notes

  1. The manuscripts are now also available on line at https://www.trin.cam.ac.uk/library/wren-digital-library/modern-manuscripts/sraffa/. The manuscripts of the 1928–31 lectures are D2/4, while those of the preparatory material are essentially D3/12, number 4 but also 5,6, 7,9,10 and 11.

  2. The literature on Sraffa’s unpublished papers is quite broad, comprising collections of essays such as Cozzi and Marchionatti (2001), Pivetti (2000), Chiodi and Ditta (2008) and Aa (2004); special issues published by economic journals such as the Review of Political Economy 2005 Vol. 17, issue 3, the European Journal of the History of Economic Thought 2005 vol. 12, issue 3, and the Cambridge Journal of Economics, 2012, vol. 36 issue 6; and works that discuss the evolution of Sraffa’s theoretical position more specifically on the basis of his unpublished papers, such as Pasinetti (2001), Marcuzzo (2005), De Vivo (2003), Gilibert (2003), Garegnani (2004, 2005), Kurz and Salvadori (2005a, b), Signorino (2005) and Kurz (2006). For the different lines of interpretation and the one followed here see fn.5.

  3. The manuscripts are now also available on line at https://www.trin.cam.ac.uk/library/wren-digital-library/modern-manuscripts/sraffa/. The manuscripts of the 1928–31 lectures are D2/4, while those of the preparatory material are essentially D3/12, number 3 but also 4, 5,6,7,9 and 11.

  4. As related by Roncaglia (1975), Sraffa’s article of 1925 attracted the attention of Edgeworth, who could read Italian and wanted to invite Sraffa to write an article for the Economic Journal, of which he was editor together with Keynes. On Edgeworth’s death, Keynes decided to take up the idea and asked Sraffa to write an article. Roncaglia (1975) also reproduces a letter of 1926 from Sraffa to Keynes about this project.

  5. Garegnani’s position on the evolution of Sraffa’s thinking, which we are summarising here, is taken up and developed in different directions by Kurz and Salvadori (2005a, b), Kurz (2006), and other recent works by various authors. A different view has been put forward by De Vivo (2003) and Gilibert (2003), who argue that there is substantial continuity in Sraffa’s positions, which supposedly seek from the very outset to rehabilitate Marx’s approach. They then go on to identify Marx, and especially his ‘reproduction schemes’, as Sraffa’s analytical starting point. According to Roncaglia (2009), the evolution of Sraffa’s theoretical position can be reconstructed along lines similar to those followed here in the text on the basis of the Sraffa’s published material only.

  6. The manuscripts used for this reconstruction are primarily D3/12/3, which Garegnani calls the Pre-lectures, and numerous other manuscripts of D3/12 numbered 4, 5, 6, 7, 9, 10 and 11.

  7. “he ... denies the possibility of consistently considering the influence of demand on the price of the individual commodity and, more generally, wishes to expunge the subjective elements of ‘utility’ and ‘disutility’ from that apparatus.” Garegnani (2005) p. 456.

  8. Sraffa uses the assumption of increasing marketing expenses to argue for a downward-sloping individual demand. The same principle can be used to build an increasing individual supply curve where constant costs are modified by these increasing expenses.

  9. Marshall’s position on Ricardo’s Theory can be found in Appendix I “Ricardo’s Theory of Value” of his Principles of Political Economy, Marshall (1920). Marshall discusses Ricardo’s theory in connection with the debate on the ultimate standard of values, as examined here at a later point.

  10. As suggested by Garegnani (2005) p. 456, Sraffa’s adherence to this Marshallian interpretation can be deduced from the fact that in summarising the conclusions of the 1925 article, Sraffa (1926) argues that assuming constant costs in the Marshallian theoretical framework (partial equilibrium and equilibrium between demand and supply) would take us back to “the old and now obsolete theory which makes it dependent on the cost of production alone”. This was how classical political economy was understood in the theoretical debate of the period.

  11. This early position, similar to the one expressed in the articles, is expressed mainly in the manuscripts D3/12/3.

  12. The reconstruction of this debate is too complex to be addressed here. See Campus (2000) for a critical analysis.

  13. Marshall’s position on this point is expressed primarily in the above-mentioned Appendix I on Ricardo. See fn.8.

  14. In some early manuscripts (D3/12/4.4), Sraffa argued that Smith, but also Ricardo and Marx, deviated from the objective notion of cost of Petty and the Physiocrats. For the final position on this point expressed in the lectures, see in particular D2/4/3 f24-31.

  15. The limits of the partial equilibrium method had already emerged in the article of 1925, where the supply side of the issue (the assumption that the rates of remuneration of productive factors remain constant while the quantities produced change) was examined. In the preparatory manuscripts and the lectures, Sraffa also considers the inconsistency of assuming the utility of other goods as given when the utility the quantity of a single good is assumed to change in the construction of the individual demand function of a partial equilibrium.

  16. The locution physical real cost shows that Sraffa tried to reformulate the Marshallian concept of real cost, which identified the ‘real’ content of the cost in the negative utility. Sraffa tried to substitute the subjective element with an objective element inspired by the notion of cost of the classical economists. Importance attaches in this connection to D3/12/3.

  17. Importance attaches in this connection to D3/12/6 and D3/12/7.

  18. See De Vivo (2003), Gilibert (2003) and Garegnani (2005).

  19. D3/12/7 85–87.

  20. See Roncaglia (1975) and Garegnani (1984) and (1987) for the general features of the theory of prices developed by Sraffa and its connection with classical political economy.

  21. Cf. Sraffa (1960) p. VI.

  22. Ricardo, D. (1815), An Essay on the Influence of a low Price of Corn on the Profits of Stock and Ricardo D. [1817] (1821), On the Principles of Political Economy and Taxation, 3rd ed. are respectively volume IV and I of Ricardo (1951–73).

  23. The same opinion was expressed by Cannan (1893) and by Marx in the Theories of Surplus Value. See Hilton (1987) for a historical reconstruction of the Corn Laws and analysis of their role in economic theory, and Salvadori and Signorino (2015) for the relevance of this debate for economic theory.

  24. The acknowledgment of the role of the labour theory of value as a measure of the value of the commodities that are necessary, both as subsistence and as means of production, for producing other commodities is one of the major contributions made by Sraffa in the interpretation of classical political economy. This position was already mature in the late 1920s.

  25. These observations on Torrens show that also on the issue of the exceptions Sraffa’s position was already far more advanced than the interpretation of Ricardo dominant in the 1920s.

  26. The passage by McCulloch quoted by Sraffa can be found in footnote 1, page 75, of McCulloch’s 1828 edition of Smith’s Wealth of Nations.

  27. Sraffa also argues that the combined use of the two notions of cost as sacrifice and as what is paid for productive services survived Mill’s theory and later found full theoretical formulation in the Marshallian version of marginalist theories.

  28. Sraffa indirectly quotes this passage of Mill’s from Cairnes (1874) p. 47.

  29. Being much less innovative than the first, the second and the third parts of the lectures have been almost ignored in the literature. They deserve much more attention, however, in that they present the content of the articles of 1925 and 1926 with significant differences. Moreover, Sraffa considers general equilibrium theories for the first time, presenting and discussing them in a highly original way.

  30. In particular, Sraffa (1960, chapter VI) critically considers the reduction of the value of a commodity to given quantities of labour, a logical procedure that then constituted—and indeed still does—the most advanced and seemingly coherent attempt to measure the capital intensity of a technique independently of distributive variables. He then goes on (chapter XII) to examine the choice of techniques and identifies the possibility of the re-switching of techniques.

  31. The debate involved economists working at Cambridge University, namely the Anglo-Italian school of P. Garegnani, G. C. Harcourt, N. Kaldor, J. Robinson and L. Pasinetti, and economists like D. Levhari, Paul Samuelson, and Robert Solow at the MIT in Cambridge Massachusetts. It reached its academic culmination with the Paradoxes in Capital Theory symposium, published on the Quarterly Journal of Economics in 1966. The key contributions on both sides were Pasinetti (1966), Garegnani (1966) and (1970), Levhari (1965) and Samuelson (1962) and (1966). See Roncaglia (2009) and (2017) and Fratini (2016b) for an introductory description of the debate in connection with Sraffa’s contribution, and Harcourt (1969) and Garegnani (1990) for a more technical and critical reconstruction.

  32. See Fratini (2016b) for an introductory description of this second phase of the debate and a complete list of bibliographical references.

  33. Quoted by Lunghini (2004).

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  1. Dipartimento di Economia, Università di Roma Tre, Rome, Italy

    Attilio Trezzini

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Correspondence to Attilio Trezzini.

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I thank Saverio M. Fratini, Roberto Ciccone and Antonella Palumbo for numerous discussions on Sraffa’s papers over the years. I am grateful to Luca De Benedictis, Daria Pignalosa, Francesco Rocchetti and the two anonymous referees, for their comments on previous versions of the paper and suggestions. The final responsibility is of course mine alone.

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Trezzini, A. Piero Sraffa’s Use of the History of Economic Thought in the Cambridge Lectures. Ital Econ J 4, 189–209 (2018). https://doi.org/10.1007/s40797-017-0063-1

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