Piero Sraffa was born on 5 August 1898 in Turin, Italy.

His father, Angelo Sraffa, was an eminent professor of commercial law and later rector of Bocconi University in Milan. Throughout his life Piero had a very close relationship with his mother, who after his father’s death moved to Cambridge to stay near to her son who remained a bachelor.

After graduating in Turin he spent a year at the London School of Economics (LSE), where he attended lectures by Edwin Cannan and Herbert Foxwell. He met John Maynard Keynes, who was deeply impressed by the young Italian and invited him to write an essay about the Italian banking system. Keynes published the paper “The bank crisis in Italy” in the Economic Journal, whose editor he was, and asked Sraffa to compose a shorter article for the supplement to the Manchester Guardian Commercial. In it Sraffa, who was possessed of detailed information, uncovered the critical position of the three main Italian banks. Benito Mussolini, who had just taken office as Prime Minister, telegraphed Sraffa’s father and requested in vain the withdrawal of the piece.

At the time the power of the fascists had not yet fully extended to the universities. In November 1923, Sraffa was appointed to a temporary lectureship in political economy and public finance at the University of Perugia. In preparing his lectures he studied intensively the partial equilibrium analysis of Alfred Marshall. In 1925 he published “Sulle relazioni fra costo e quantita prodotta” (“On the relationships between cost and quantity produced”) in the recently founded journal Annali di Economia (Sraffa 1925 [1998]).

In November 1926 Gramsci was arrested and in 1928 condemned to 20 years in gaol. He died in 1937. During these years Sraffa played a crucial role in assisting Gramsci, sending books, maintaining a relationship with the family and especially with the sister­in-law Tatiana, organizing legal and medical support, and maintaining links with the party (see Sraffa 1991; Napolitano 2005).

In 1927 Sraffa was offered a lectureship at the University of Cambridge, UK. He became a member of King’s College, of which Keynes was a fellow. Over the summer he prepared his “Lectures on advanced theory of value”, which were scheduled for the autumn term. But he asked for a postponement for a year. It was not only his meticulousness that prompted him to do so. As we know from his hitherto unpublished

manuscripts, it became clear to him that Marshall’s analysis could not be salvaged by putting the “forces” of supply and demand on solid, objective grounds. Rather an entirely fresh start was needed in the theory of value and distribution. The situation at the time was rendered a great deal more complicated by the fact that the sought new beginning soon turned out to require a return to the approach advocated by the clas­sical economists from Adam Smith to David Ricardo. Criticizing Marshall’s theory, elaborating an alternative to it and uncovering its historical roots were tasks too big for scrupulous Sraffa to lecture on.

In 1929 Sraffa met the Austrian philosopher Ludwig Wittgenstein upon the latter’s return to Cambridge, with whom he got on friendly terms and on whose thinking he had a great influence (see Kurz 2009). As Wittgenstein acknowledged, his transition from the Tractatus logico-philosophicus to the Philosophical Investigations was first and fore­most due to Sraffa’s criticism. Wittgenstein admired Sraffa’s breadth of knowledge and astuteness, but he also suffered from him. Sraffa, on the other hand, found it difficult to cope with his friend’s narcissism and political naivety. In 1943 Sraffa, to Wittgenstein’s dismay, terminated their regular meetings and discussions. Sraffa was also on friendly terms with several other scholars in Cambridge, especially Keynes, the philosopher and mathematician Frank P. Ramsey, the mathematician Abram S. Besicovitch and the economist Maurice Dobb.

In early 1930 the Royal Economic Society entrusted Sraffa with the edition of The Works and Correspondence of David Ricardo because of which he had to interrupt his constructive work on his book. Sraffa rushed with passion at the job. Reflecting his expertise, in 1930 he published in the Quarterly Journal of Economics a note in which he showed that an “oversight” on the principle of comparative cost that John Stuart Mill had attributed to Ricardo was indeed an error committed by James Mill and repeated by the latter’s son John Stuart himself (Sraffa and Einaudi 1930).

At the suggestion of Sraffa, in 1930 the so-called “Cambridge Circus” formed in order to work through Keynes’s Treatise on Money (1930). He, Richard Kahn, James Meade, Joan and Austin Robinson met regularly and formulated questions and criticisms, which were then communicated to Keynes, who in the meantime had started to work on The General Theory of Employment, Interest and Money (Keynes 1971-88, Collected Writings, hereafter CWVII). Sraffa’s impeccable logic was both extolled and feared. For example, in 1932 Joan Robinson wrote to Keynes:

I believe that like the rest of us you have had your faith in supply curves shaken by Piero. But what he attacks are just the one-by-one supply curves that you regard as legitimate. His objec­tions do not apply to the supply curve of output [as a whole] - but Heaven help us when he starts thinking out objections that do apply to it! (Keynes CW XIII: 378) As we know from Sraffa’s papers and library, he did indeed formulate objections to Keynes’s new theory, especially to its core piece, the theory of liquidity preference (see below).

Keynes appreciated Sraffa not only because of his quick mind and erudition, but also because of his intimate knowledge of the banking system and the stock exchange. Variously Sraffa demonstrated his skills and sound judgement during discussions Keynes had with him and Kahn in the preparation of transactions at the stock exchange. On at least one occasion Keynes would have been well advised to follow Sraffa’s rea­soning (see Keynes CW XII: 22-4). Otherwise, Sraffa’s collaboration with Keynes was largely restricted to only two areas: the Ricardo edition (see Gehrke and Kurz 2002) and in tracing the author of an Abstract of a Treatise on Human Nature. It was Sraffa, “from whom nothing is hid” (Keynes CW X: 97), who established the fact that the author was Hume, and not Adam Smith (see the introduction by Keynes and Sraffa in Hume 1938).

In 1931 Friedrich August von Hayek published, upon Lionel Robbins’s invitation, in Economica a frontal assault on Keynes’s Treatise (Hayek 1931a).

In 1939 Sraffa became a fellow of Trinity College, Cambridge, where he stayed until the end of his life. In 1940 he was for several months interned together with other aliens living in Great Britain on the Isle of Man. It was thanks to Keynes’s intervention that a few months later he was released. Back in Cambridge he worked feverishly on the Ricardo edition and resumed his work on the reconstruction of the classical approach to the theory of value and distribution. He felt he could accomplish both tasks before long. He was offered positions at the University of Chicago and the New School for Social Research, but he turned both offers down. During 1942-43 he gave lectures in Cambridge on “Industry”, in which he discussed inter alia the problem of the separation of ownership and control in modern joint stock companies. Upon the surprising discov­ery of Ricardo’s letters to James Mill in 1943 he was forced to rearrange the Ricardo volumes, which were already available in lead typesetting. Between 1951 and 1955 he at long last managed to publish, with the assistance of Maurice Dobb, volumes I-X of The Works and Correspondence of David Ricardo (volume XI, containing the index, had to wait until 1973). For his achievement the Royal Swedish Academy of Sciences awarded him in 1961 the Soderstrom medal, a prize given only on the occasion of exceptional scholarly achievements.

After another interruption for a decade or so, Sraffa finally, from 1956 until 1958, put together, on the basis of his old notes and manuscripts, his 1960 book. The work of barely 100 pages was published in English and almost at the same time in an Italian edition elaborated with the help of an Italian friend, the banker Raffaele Mattioli. The book was swiftly translated into several languages and formed the linchpin of the controversies in the theory of capital in the 1960s and 1970s. Sraffa did not himself intervene directly in the controversy. He replied however to Roy F. Harrod, who had suggested a particular interpretation of Sraffa’s equations of production (Sraffa 1962).

Sraffa was offered honorary PhD degrees by several universities from all over the world, but typically he did not accept them when his personal presence at the ceremony was requested. He still tinkered with the idea of complementing the “Prelude to a critique of economic theory”, the subtitle of his book, with the critique itself in a further book. However, his vigour and stamina had weakened and he suffered from illnesses.

Sraffa died on 3 September 1983 in Cambridge. He left Trinity College a considerable amount of money, a most precious library of several thousand books (see De Vivo 2014) and huge literary remains of several thousand pages, slips of paper and notes. A judi­cious edition of Sraffa’s papers and correspondence is currently in preparation.

Theoretical Contributions

Criticism of Marshall’s partial equilibrium analysis

In 1925 and 1926 Sraffa published a thorough and devastating criticism of Marshall’s method of partial equilibrium of competitive prices. The second paper starts with the following observation:

A striking feature of the present position of economic science is the almost unanimous agree­ment at which economists have arrived regarding the theory of competitive value, which is inspired by the fundamental symmetry existing between the forces of demand and those of supply,... represented by a pair of intersecting curves of collective demand and supply. This state of things is in such marked contrast with the controversies on the theory of value by which political economy was characterized during the past century that it might almost be thought that from these clashes of thought the spark of an ultimate truth had at length been struck. (Sraffa 1926: 535)

Sraffa did not share this view. He objected that in “the tranquil view which the modern theory of value presents us there is one dark spot which disturbs the harmony of the whole” - the supply curve, based upon the combination of the laws of increasing and diminishing returns. Its foundations, he maintained, “are actually so weak as to be unable to support the weight imposed upon them” (1926: 536).

Consider the usual textbook partial equilibrium argument. A change in one market (for example, a shift in the demand curve for wine) is taken to have first an effect on the equilibrium in that market (for example, a change in the price and in the quantity of wine produced), and then perhaps an effect on other markets as a consequence of this change in price and quantity (for example, a shift in the demand for grapes and in the demand for beer, for some a wine substitute). If it can be assumed that the effects on the other markets are of a second order of magnitude with respect to the effect obtained on the equilibrium of the market in which the original change took place, and if these former effects are assumed to be so small that they can be neglected, at least at a first stage, then the supply and demand curves of a given market can be considered, in regard to small variations, as independent both of each other and of the supply and demand curves of all other commodities.

Both logical and empirical aspects are tightly intertwined in Sraffa’s critique of Marshall: by reconstructing, in a logically consistent way, the Marshallian partial equi­librium model of competitive markets, Sraffa was able to identify the boundaries of its explanatory domain. Which potentially observable facts may be analysed by means of Marshall’s model? The result of Sraffa’s investigation was that the explanatory power of Marshall’s model is extremely limited, which may explain why the Marshallian boxes on returns to scale remained obstinately empty, as Clapham (1922) observed. Sraffa distinguished between variable returns that are (1) internal to the firm; (2) external to the firm but internal to the industry; and (3) external to both the firm and the industry. Variable returns of type (1) are incompatible with perfect competition, whereas variable returns of type (3) are incompatible with the method of partial equilibrium. Only vari­able returns of type (2), whose empirical importance is dubious, turn out to be compat­ible with Marshall’s analysis of the supply curve of an industry in competitive conditions (see Signorino 2000, 2001; Freni and Salvadori 2013).

In his two papers Sraffa (1925, 1926) did not base his criticism on the fact that com­modities are produced by means of commodities, that is, there is a tight interdependence between industries, each industry selling its product(s) as necessary input(s) to many other industries and buying the products of many other industries as necessary inputs (see Steedman 1988; Freni 2001). The type of sectoral interdependence considered in his two papers is, rather, a consequence of the fact that commodities are produced either by means of technologies employing the same primary inputs (in the decreasing returns case) or characterized by the same external economies (in the increasing returns case).

Sraffa (1925) concluded from this that with regard to small variations in the quantity produced the assumption of constant returns is the most convenient for the analysis of the supply curve of an industry in competitive conditions. This view is repeated in his 1926 paper and interpreted as rendering support to the classical doctrine: “the old and now obsolete theory which makes it [the competitive value] dependent on the cost of produc­tion alone appears to hold its ground as the best available” (1926: 541). Yet, if in competi­tive conditions cost of production determines values in the long period, it follows that the symmetric theory of value loses its appeal: demand has no role to play in determining value.

For several reasons this conclusion did not satisfy Sraffa. Could Marshall’s approach perhaps be remedied, and, if yes, how? Was it necessary to abandon the assumption of perfect competition or that of partial equilibrium analysis, or both? How do costs of production determine values in the classical authors? Was the substance or only the form of the classical theory unsound?

Here we cannot enter into a detailed discussion of how Sraffa responded to these ques­tions. A few observations must suffice. In assessing Marshall’s analysis Sraffa had at the back of his mind some form of general analysis of economic interdependence. It was a stripped-down version of such an analysis, because it did not take into account the fact that commodities are produced by means of commodities. Sraffa motivated this neglect of a most important fact in terms of the observation that “the conditions of simultaneous equilibrium in numerous industries” are far too complex and that “the present state of our knowledge... does not permit of even much simpler schema being applied to the study of real conditions” (Sraffa 1926: 541). Interestingly, he concluded the paper by pointing out that “the process of diffusion of profits throughout the various stages of production and of the process of forming a normal level of profits throughout all the industries of a country... is... beyond the scope of this article” (ibid.: 550). It is precisely this problem that Sraffa began to tackle in the late 1920s. However, before we turn to this we must first, following a chronological order, recall some other works he published or edited.

Criticism of Hayek’s overinvestment theory of the business cycle

Sraffa succeeded in warding off Hayek’s (1931a, 1931b) attack on Keynes. (For the fol­lowing, see Kurz 2000.) He rejected Hayek’s basic proposition that a divergence between the actual or money rate of interest and the “natural” or “equilibrium rate” is a charac­teristic feature of a monetary economy (Sraffa 1932a: 49). With reference to Wicksell’s definition that interest is the surplus in real units of the exchange of physically homoge­neous goods across time, he emphasized:

If money did not exist, and loans were made in terms of all sorts of commodities, there would be a single rate which satisfies the conditions of equilibrium, but there might be at any moment as many “natural” rates of interest as there are commodities, though they would not be ‘equi­librium’ rates. (Sraffa 1932a: 49)

He added:

The “arbitrary” action of the banks is by no means a necessary condition for the divergence; if loans were made in wheat and farmers (or for that matter the weather) “arbitrarily changed” the quantity of wheat produced, the actual rate of interest on loans in terms of wheat would diverge from the rate on other commodities and there would be no single equilibrium rate. (Ibid.)

Sraffa illustrated his argument in terms of two economies, one with and the other without money, and exemplified the main idea with regard to a cotton trader:

The rate of interest which he pays, per hundred bales of cotton, is the number of bales that can be purchased with the following sum of money: the interest on the money required to buy spot 100 bales, plus the excess (or minus the deficiency) of the spot over the forward prices of the 100 bales. (Sraffa 1932a: 50)

Let i_t θ be the money rate of interest for θ periods, M the sum of money under considera­tion, p^t and p^t+θ the spot and forward price, and p_t θ the commodity rate of interest of cotton between t and t + θ, we have:

In equilibrium the spot and forward price coincide for all commodities, and all commod­ity rates are equal to one another and equal to the money rate.

But if, for any reason, the supply and the demand for a commodity are not in equilibrium (i.e. its market price exceeds or falls short of its cost of production), its spot and forward prices diverge, and the “natural” rate of interest on that commodity diverges from the “natural” rates on other commodities. (Sraffa 1932a: 50)

He added that “under free competition, this divergence of rates is as essential to the effecting of the transition [to a new equilibrium] as is the divergence of prices from the costs of production; it is, in fact, another aspect of the same thing” (ibid.: 50; emphasis added).

In terms of classical economics we are confronted with the problem of the gravitation of “market prices” towards their “natural” levels. These are equal to costs of production (including the general rate of profits on the capitals employed), which Sraffa had ana­lysed in the late 1920s in his “second” (with surplus) equations (see below). The idea of gravitation is clearly spelled out:

[I]mmediately some [commodities] will rise in price, and others will fall; the market will expect that, after a certain time, the supply of the former will increase, and the supply of the latter fall, and accordingly the forward price, for the date on which equilibrium is expected to be restored, will be below the spot price in the case of the former and above it in the case of the latter; in other words the rate of interest on the former will be higher than on the latter (Sraffa 1932a: 50).

In addition, Sraffa criticized Hayek’s view that, as a consequence of the banking system’s eventual abandonment of its mistaken interest rate policy, the economy will return to its old equilibrium. This will not be the case, because in the meantime the policy will have changed wealth and income distribution and thus one of the data defining an equilibrium (the other two being preferences of agents and technical alternatives of production). Hayek’s idea that “voluntary savings” can be strictly separated from “forced savings”, caused by the reduction in the output of consumer goods consequent upon a lowering of the money rate of interest and the shifting of productive resources away from the con­sumption goods and to the investment goods industries, is naive. Hayek had not argued correctly and was unable to explain the facts he purported to explain.

Keynes was very pleased with Sraffa’s performance: it had effectively countered the assault on his intellectual project launched by Lionel Robbins and his circle at the LSE, and had allowed him to develop the General Theory undisturbed by any further inter­ventions by the Austrian economist. In chapter 17 of the General Theory, “The essential properties of interest and money”, Keynes thanked Sraffa (see CW VII: 223 fn.), adopted what he considered the concept of commodity rates of interest to be and based his argu­ment upon it. He contended that the “money own rate of interest”, determined by liquid­ity preference, is sticky downwards and prevents the volume of investment to attain a level equal to full employment savings (see Keynes CW VII: 222-44).

Criticism of Keynes’s theory of liquidity preference

Sraffa was not at all pleased with Keynes’s respective argument. He felt that Keynes had seriously misunderstood the concept of commodity rate of interest and had grossly misapprehended its explanatory potential. Sraffa’s objections are contained in his anno­tations in chapter 17 of his working copy of the General Theory and in two short manu­script fragments that were found in the latter after Sraffa had passed away in 1983. These objections have far-reaching implications because in Sraffa’s assessment the theory of liquidity preference “involves all the functions considered in the system: it is, in fact, Keynes’s system!” (Sraffa Papers: I100) (see Ranchetti 2002; Kurz 2010).

In his annotations Sraffa made the following objections. First, Keynes used two con­tradictory definitions of the concept of commodity rate, Sraffa’s and a new one according to which the latter is made up of three characteristics of any durable asset that supposedly can all be translated into interest rate equivalents and then added up: (1) the “yield” of the asset q, (2) its “carrying cost” c, and (3) the “liquidity premium” l, that is, q + c + l (see Keynes CW VII: 226). As against this, Sraffa insisted that the concept is only defined in terms of an expected change of the price of the asset. Secondly, as regards Keynes’s choice of money as standard of value, Sraffa drew attention to an important implication Keynes had overlooked: “The point is, that in the case of the rate of the article chosen as standard, the effect upon it of the expected depreciation is concealed” (ibid.: 227, emphasis added). Thus, an expected fall in the value of money implies a high “money-rate of wheat interest”, which, alas, Keynes did not take into account. Third, Keynes did not reason correctly and variously arrived at conclusions that are exactly the opposite of what results from a cogent argument. His contention that the money rate of interest cannot fall to a level compatible with full employment savings, because the elasticity of production of money is zero and its elasticity of substitution close to zero, cannot be sustained.

The two manuscript fragments confirm the assessment that the chapter is a mess. Sraffa argues in particular: (1) Keynes’ concept of liquidity is vague and ambiguous; (2) there is no reason to presume that a higher liquidity is always a good thing for each and every agent; and (3) Keynes erroneously admits Fisher’s effect for all commodities except money. (In the following, all quotations are from folder I100 of the Sraffa Papers.)

With regard to (2), Sraffa observes that the liquidity preference curve - the inverse relationship between holding cash and the rate of interest - is reminiscent of the usual marginal utility curve: “liquidity is always an advantage, though diminishing”. Sraffa objects that while for some agents it may be the case in a particular situation, for others it may be otherwise. Banks, for example, must remain solvent and liquid, but they must also make profits. When their income consists almost exclusively of interest, they must, with a lower rate of interest, get less liquid in order to keep up their income. Therefore it is impossible to say in general that there is a definite relationship between the quantity of money and the rate of interest or liquidity preference curve.

Advantages associated with carrying an asset, Sraffa insists, have nothing to do with its commodity rate. People who borrow money or any other asset typically do this not in order to carry what is being borrowed until the expiration of the contract. They, rather, borrow money to buy with it other things. What is being borrowed is not what is being kept, but the standard in which the debt is fixed. Therefore, it is irrelevant whether a person pays in money or wheat and whether what is borrowed is durable or perishable. Sraffa is convinced “that K. has in the back of his mind two wrong notions, which have entirely misled him”, namely, that only durables can be borrowed and are so for the sake of keeping them.

There remains the fact that a large quantity of money (cash) and a low rate of interest often go together, which gives the curve some plausibility. Yet according to Sraffa the “causation is the other way round”: it is a low rate of interest that is responsible for a large quantity of money, not a large quantity of money that causes a low rate of interest. Attention ought to focus on those who demand loans (investors) and not on those who provide them with liquid funds (banks and savers). Keynes’s theory of liquidity prefer­ence, Sraffa concludes, is similar to the old long-period theory of the supply of savings that is elastic with respect to the rate of interest carried over to a short-period framework.

The commodity rate of interest, Sraffa observes, is defined with respect to the forward price of a commodity and nothing else. There are two ways in which the commodity rates can become uniform again: via changes in prices and/or quantities. Surprisingly, Keynes allows for both possibilities with regard to all commodities except money. To see this, contemplate the case in which people suddenly develop a large propensity to hoard money. This will depress the economy and commodity prices will start to fall, that is, the value of money will rise. Now, an expected further increase in the value of money implies a lower “own rate of money interest”, using Keynes’ peculiar concept. Sraffa concludes from this that “therefore the money rate will be lower than other rates and not higher”. He observes that this is “Fisher’s effect, which K. admits for all commodities except money”. The reference is to Irving Fisher (see especially 1907), who first put forward the concept of own rates. Sraffa summarizes his criticism of Keynes: “Thus in the K. case, the result on rates of int[erest] is opposite to K.’s conclusion.”

The Ricardo edition

The first volumes of The Works and Correspondence of David Ricardo (Ricardo 1951— 73, hereafter Works) were published in 1951, 31 years after Sraffa had been appointed to the editorship by the Royal Economic Society. (For the causes of this delay, see Pollit 1990; Gehrke and Kurz 2002.) The edition substantiated Sraffa’s interpretation of the classical economists as advocating a surplus approach to the theory of value and distribution. Sraffa had begun in the late 1920s to reformulate this approach in a coherent way, an endeavour that culminated in his 1960 book. Here we focus atten­tion especially on the “corn-ratio theory” of profits of Sraffa’s new interpretation of Ricardo.

In his Introduction to the Principles in Works volume I, Sraffa interprets Ricardo’s 1815 Essay on Profits as being based on the idea that there is a sector in the economy that is “in the special condition of not employing the products of other trades while all the others must employ its product as capital” (Works I: xxxi, emphasis in the original). The sector is corn (wheat) production. Sraffa therefore speaks of the “corn-ratio theory”. It allows determination of the rate of profit in the corn sector in purely material terms as the surplus (exclusive of rent) obtained, a quantity of corn, divided by the capital advanced in the sector, another quantity of corn - without any reference to values. However, the rate of profit so determined is also the general rate of profits since, in the case of free competition, all other sectors that need corn as an input yield the proprietors of capital the same rate of profit via an adjustment of the prices of their products relative to that of corn.

In his 1960 book Sraffa writes: “It should perhaps be stated that it was only when the Standard system and the distinction between basics and non-basics had emerged in the course of the present investigation that the [corn-ratio] theory suggested itself as a natural consequence” (Sraffa 1960: 93). Corn in this interpretation is what Sraffa in his book was to call a “basic” commodity (and actually the only basic commodity in the system), since it is needed directly or indirectly in the production of all commodities (Sraffa 1960: 7), whereas all the other commodities are non-basics. This distinction plays a crucial role in the concepts of the standard system and standard commodity, which Sraffa had succeeded in elaborating (with the help of Abram S. Besicovitch) by May 1944, and in which non-basics have been eliminated.

With these findings at the back of his mind, Sraffa (with the help of Dobb) then composed his Introduction to volume I of the Works, in which he interpreted Ricardo’s Essay of 1815, which revolves around a numerical example contained in a table, as reflecting the corn-ratio theory. Sraffa also draws attention to Malthus’s criticism of “the fault of Mr. Ricardo’s table”, since circulating capital (which includes real wages) typically does not only consist of corn, but includes “tea sugar cloaths &c for the labour­ers” (Works I: xxxii, n. 4). With the price of corn as the standard of value, the prices of manufactured products are bound to decrease in terms of corn as less and less fertile lands have to be cultivated. Ricardo had, of course, not to be convinced by Malthus that capital and wages in agriculture consist of several commodities and not only of corn (a term, which, by the way, stood for a composite commodity like “bread” in the Bible). But then, in the Essay, after having stated the obvious in the text himself, Ricardo in the table, simply ignored it. This may be seen to reflect his basic vision that the rate of profits could be conceived of in purely physical terms. A deeper analysis than Malthus’s shallow proposition, which Ricardo paraphrased as saying that “the profits of the farmer no more regulate the profits of other trades, than the profits of other trades regulate the profits of the farmer” (Works VI: 104), was needed. This proposition was of no use at all in understanding how that regulation was actually meant to work.

A particularly clear expression of his basic vision Ricardo formulated some six years later in his letter to McCulloch of 13 June 1820 - to Sraffa (Works I: xxxiii) “an echo of the old corn-ratio theory”. In it Ricardo insisted: “After all the great questions of Rent, Wages, and Profits must be explained by the proportions in which the whole produce is divided between landlords, capitalists, and labourers, and which are not essentially con­nected with the doctrine of value” (Works VIII: 194; emphasis added).

In the Principles Ricardo sought to deal with the heterogeneity of commodities in terms of the amounts of labour bestowed upon them in their production. The labour theory of value was the device by means of which he intended to overcome as best as he could the impasse in which he found himself. However, this did not make him entirely abandon his basic vision. Interestingly, in all three editions of the Principles we encounter a numerical example, which satisfies the homogeneity condition of output and capital, but now no longer with regard to a single industry only, but with regard to the aggregate of several industries taken together (see Works I: 50, 64-6).

Taking into account a multiplicity of wage goods, as Malthus had requested, does not spell trouble for Ricardo’s grand vision of the factors affecting the general rate of profits and the possibility of conceiving of it in physical terms. The rate depends on the condi­tions of production in all industries that directly or indirectly contribute to the produc­tion of wage goods, but does not depend on the conditions of production of “luxuries” (see Works I: 132, 143). Ricardo’s above example elevates the corn-ratio theory from its previous single commodity conceptualization to an explicitly multi-commodity conceptualization.

Clearly, both the corn-ratio theory and the labour theory of value are makeshift solu­tions Ricardo adopted lacking a fully satisfactory theory. In a letter to Malthus dated 17 April 1815 he spoke of his “simple doctrine”, designed to “account for all the phenomena in an easy, natural manner” and thus stay away from “a labyrinth of difficulties” (Works VI: 214).

We now turn to Sraffa’s work on the reconstruction and rectification of the classi­cal theory of value and distribution, which began in late 1927 and extended over three periods of time, roughly the years 1927-31, 1942-45 and 1956-58.

Revisiting the classical theory of value and distribution

At the latest in 1927, Sraffa saw that the Marshallian interpretation of the classical economists as early and crude precursors of the marginalists could not be sustained. However, what precisely was the classical point of view and why had it been abandoned? Covered by thick layers of (mis)interpretation, Sraffa had first to lay bare the analytical structure of the surplus explanation of profits. In a second step he then had to remove the deficiencies because of which it had been abandoned prematurely. In a third step it had to be shown that the reformulated classical theory provided “the basis for a critique of that [the marginalist] theory” (Sraffa 1960: vi).

A main reason why the classical theory had been abandoned, Sraffa was convinced, was because the analytical tools at the disposal of its advocates were not up to the com­plexity of their sophisticated view of the capitalist economy. They conceived of produc­tion as a circular flow in a system characterized by a social division of labour, with inputs advanced at the beginning of the production period and consisting of heterogeneous commodities. This process generated a surplus above and beyond the necessary means of sustenance in the support of workers and the means of production that were of necessity used up, or “destroyed”, in the course of production. The surplus represented the mate­rial basis of all non-labour or non-wage incomes, rents, profits and interest. In competi­tive conditions profits were distributed at a uniform rate on all capitals employed in the economy. How to deal with such a system?

The mismatch between tools and concepts landed these authors in an impasse, with which they tried to cope as best as they could. The result of this was the labour theory of value. Whereas Smith and Ricardo insisted that it held exactly true in explaining relative prices in exceptional circumstances only and Ricardo thought it was a reasonably good approximation to a correct theory of value otherwise, Marx contended that both the general rate of profits, the key variable of the system, and prices of production of com­modities corresponding to this rate could be ascertained on the basis of the “law of value”.

When Sraffa scrutinized the writings of the classical authors he concluded that the labour theory of value involved a “corruption” of their approach. In a note entitled “Degeneration of cost and value”, probably written in November 1927, he insisted: “A. Smith and Ricardo and Marx indeed began to corrupt the old idea of cost, - from food to labour. But their notion was still near enough to be in many cases equivalent.” (Sraffa Papers D3/12/4: 2(1)). In what sense did the labour theory of value involve a “cor­ruption” of classical theory? (For the following see, in particular, Kurz and Salvadori 2005a, 2005b, Gehrke and Kurz 2006 and Kurz 2012.)

Sraffa rejected Marshall’s concept of “real costs”, which involved subjectivist ele­ments (disutility, abstinence, waiting, and so on). While he had sensed at an early time that the classical economists’ analyses differed in important respects from those of the later marginalists, he was far from clear wherein precisely the difference consisted. He now grasped that a characteristic feature of their theory of value was that it was based on what he called “physical real cost”, or “physical cost” for short, to distinguish it from Marshall’s “real cost”: the value of a commodity reflected the amounts of commodities (raw materials, means of production and means of subsistence of workers) that had of necessity to be used up in its production. Such costs reflected the “difficulty” of produc­ing a particular commodity, and value had to do with the amounts of commodities that had be “destroyed” in order to overcome the difficulty.

Sraffa encountered numerous expressions in the writings of the classical authors of the physical cost approach. For example, William Petty had advocated a “physi­cian’s outlook” on economic matters and had decided “to express my self in terms of Number, Weight, or Measure... and to consider only such Cases, as have visible Foundations in Nature, leaving those that depend upon the mutable Minds, Opinions, Appetites, and Passions of particular Men, to the Consideration of others” (Sraffa Papers D3/12/4: 3). Petty’s statement is particularly interesting, because it confronts the physical cost point of view neatly with an early expression of the subjectivist one. Even more physicalist in character is James Mill’s (1826: 165) remarkable proposition: “The agents of production are the commodities themselves... They are the food of the labourer, the tools and the machines with which he works, and the raw materials which he works upon.”

Echoing these statements, Sraffa in December 1927 called classical economics explic­itly a “science of things” (D3/12/61: 2) as opposed to Marshall’s economics, which was a science of motives. But how could one ascertain the values of commodities in terms of physical costs? In order to determine the value of commodity A one had to know the values of commodities X, Y, Z... used up in its production. In short, it appeared as if one was trapped in circular reasoning, explaining values by values. How did the classical economists (and Marx) try to avoid the pitfall? They sought to render all commodities commensurable by reducing each to an “ultimate measure of value”.

Sraffa in his early manuscripts followed the classical economists and attempted to reduce commodities to some such measure. He did so by starting from systems of simul­taneous equations and quickly discovered that several commodities could serve as such a measure: in the case of a system without a surplus product, all commodities produced are “necessaries”, that is, they are indispensable in each and every line of production. Hence each and every commodity enters into the production of each and every com­modity. Relative prices, Sraffa had convinced himself in late 1927, could be ascertained without being trapped by circular reasoning that had Smith and Ricardo prompted to endorse the labour theory of value. This could be done by formulating and solving a system of simultaneous equations, in which only quantities of commodities appear as known magnitudes. This was the tool the classical economists had badly missed.

Beginning in November 1927, Sraffa developed at first square systems of equations (dealing with single production) in which no more is produced of the different commodi­ties than is consumed productively, that is, systems without a surplus product. This is what he called his “first equations”. He swiftly moved on, in the late 1920s, to investi­gate systems with a surplus product, without and with durable instruments of produc­tion (fixed capital) and with given and constant real wages in his “second equations”, followed by an investigation of the impact of a variation in real wages on the “rate of interest” and relative prices in his “third equations”. He analysed the mathematical prop­erties of the following systems (taking gross output quantities as defining one unit of the respective output).

Without a surplus product

Here p is the price vector and A* is the input matrix (per unit of output) of the means of production-cum-means of subsistence consumed productively during the annual cycle of production.

With a surplus product

Here R is the general rate of profits and A** is the input matrix in the new situation. With real wages given (and included in A**), R gives the rate of return supported by the socio-technical conditions under consideration.

Studying the impact of a rise in real wages on the rate of profits and prices, Sraffa at first followed Ricardo, who had contemplated a redistribution that is proportional to the surplus product in the initial situation. If the entire surplus becomes wages, we are back to a system like equation (2) with A** in the place of A*.

While Sraffa at first does not appear to have been aware of the fact that with wages absorbing the entire surplus product, relative prices of commodities can be shown to be proportional to the relative quantities of labour embodied in the various commodities, or labour values (properly defined; see Kurz and Salvadori 2009). Hence labour values reflect but a very special constellation of the sharing out of the surplus product among workers and capitalists. To emphasize this fact, Sraffa in the early 1940s coined the term “value theory of labour” (see Sraffa Papers D3/12/44: 3). Labour values, far from being simple things, require the solution of a system of simultaneous equations.

As Sraffa’s interpretation of the classical authors shows, if their physical cost approach is developed coherently, there is no problem of the “transformation” of values into prices of production, with which Marx had struggled in vain. This does not mean that one cannot get, in certain cases, in a logically consistent way from labour values to prices. It only means that the latter can be determined totally independently of the former, which are therefore redundant in the analysis (Steedman 1977). Interestingly, in non-trivial cases in which one can go from labour values to prices of production the use of Sraffa’s standard commodity is required (see Kurz and Salvadori 2009). In this perspective the labour theory of value is not an indispensable building block of classical economics.

Production of Commodities by Means of Commodities

Sraffa vacillated whether to publish the manuscript, which for some time he had given the title “Production of Commodities by Commodities”, echoing James Mill’s dictum above. Originally he had planned to write a much more comprehensive work, which was supposed to provide not only a prelude to a critique of marginalist theory, but of the cri­tique itself, and a history of economic thought, explaining the reasons for the abandon­ment of the classical doctrine. The latter Sraffa considered to be an even more important task than the critique itself (see Sraffa Papers D3/12/4: 14). Besicovitch eventually con­vinced him to publish the results of his work, because it contained “new results”.

The book was finally published in 1960. Sraffa followed the classical authors not only in terms of the method adopted and the general approach chosen, but broadly also in terms of the two-part structure of the argument. In one part he is concerned with inves­tigating given “systems of production”. The relationship between relative prices, the

general rate of profits and the wage rate implicit in the given system of production, or “technique”, is analysed partly in formal terms. Subsequently Sraffa turns to the choice of technique problem. Hence, what was initially taken as given is now an unknown. This is dealt with in chapter XII, “Switch in methods of production”, on the assumption that the choice between alternative techniques “will be exclusively grounded on cheap­ness” (1960: 83); that is, he is concerned with determining cost-minimizing system(s) of production.

The basic premise from which Sraffa starts is that commodities are produced by means of commodities. This then leads to the concept of surplus, to the distinction between basic and non-basic products, and to the assumption that there exists at least one basic commodity (chapters I and II, §§. 1-12). The main aim of chapter III (§§. 13-22) is to provide a “preliminary survey” (§. 20) of price movements consequent upon changes in distribution on the assumption that the methods of production remain unchanged. Sraffa concludes this preliminary survey of the subject by asserting that

the relative price-movements of two products come to depend, not only on the ‘proportions’ of labour to means of production by which they are respectively produced, but also on the ‘pro­portions’ by which those means have themselves been produced, and also on the ‘proportions’ by which the means of production of those means of production have been produced, and so on. (1960: 15)

He adds that the relative price of two products may behave in a non-expected way, and that “further complications arise” (Sraffa 1960: 15).

The complete analysis of price movements in the case of single production is provided in chapter VI (§§. 45-9), showing that the difference between the prices of two com­modities can be positive or negative depending on income distribution. The analysis is significantly simplified by the use of the “Standard commodity” as numeraire. Chapters IV and V of Sraffa’s book are in fact devoted to the introduction of this tool of analysis and to the study of its properties.

While Part I of Sraffa’s book is devoted to single-product industries and circulating capital, Part II deals with joint production (chapters VII-IX), fixed capital (chapter X) and land (chapter XI). These chapters will be discussed later, jointly with the literature to which they gave rise. Part III of Sraffa’s book is devoted to the choice of technique problem.

In the Preface to his book Sraffa stressed that he had not made any assumption about returns since it was not concerned with changes either in the scale of production or in the proportions in which the “factors of production” are employed (1960: v). In Parts I and II of the book it is clear that the quantities produced of the various commodities and the methods of production operated are taken as given. This is particularly clear in chapter XI, devoted to “Land” and diminishing returns. The exposition of extensive rent (§. 86), of intensive rent (§. 87), and of the problem of a multiplicity of agricultural products (§. 89) starts from given quantities and methods. Only in section 88 it is explic­itly stated that the results presented in sections 86-87 (and 89) are the outcome of a process of diminishing returns, and the connection that exists “between the employment of two methods of producing corn on land of a single quality and a process of ‘intensive’ diminishing returns” is fully explained. This connection is considered “less obvious” than the connection between the employment of n methods of producing corn on n different qualities of land and a process of “‘extensive’ diminishing returns”, which is considered to be “readily recognized”. It is only in this context that Sraffa actually does not consider gross output quantities as given. Interestingly, the process of diminishing returns described in section 88 is exactly the same as in Sraffa’s (1925) paper; diminish­ing returns

must of necessity occur because it will be the producer himself who, for his own benefit, will arrange the doses of the factors and the methods of use in a decreasing order, going from the most favourable ones to the most ineffective, and he will start production with the best com­binations, resorting little by little, as these are exhausted, to the worst ones. (Sraffa 1925: 288, [1998]: 332)

Reception and Impact

Each of Sraffa’s publications had a considerable immediate impact on the profes­sion, but the long-term legacy of his work cannot be assessed as yet. His criticism of Marshall’s theory was at first received enthusiastically. Leading authorities in economics such as Edgeworth or Morgenstern (1931) praised Sraffa’s papers as masterpieces. The papers paved the way to the theory of monopolistic competition, but soon the profes­sion returned to old modes of thought. His criticism of Hayek dealt a serious blow to Austrian economics. The Ricardo edition has fundamentally changed our view of the doctrine of the classical economists and of the history of economic thought more gen­erally. It has also made the profession aware of the fact that certain doctrines may be prematurely abandoned not because of irremediable defects, but because of a form that cannot be sustained. Sraffa put into sharp relief that the “market for economic ideas” is not an efficient selection mechanism that abandons whatever is untenable and preserves whatever is correct.

While the controversy in the theory of capital took off from a paper by Joan Robinson (1953), she stressed that she had picked up ideas coming from Sraffa. The latter was the mentor of two major combatants in the controversy, Pierangelo Garegnani and Luigi Pasinetti. For summary accounts of the controversy, which revolved around the phenomena of “reswitching” and “reverse capital deepening” and their implication for the marginalist or neoclassical theory, see Garegnani (1970, 2012), Harcourt (1972) and Kurz and Salvadori (1995: ch. 14). For assessments of the impact of Sraffa’s book, see Roncaglia (1978) and more recently Aspromourgos (2004).

While the problem of single production has been investigated swiftly after the publi­cation of Sraffa’s book (1960), the problems of joint production, fixed capital and land were studied only after 1978 (see Salvadori and Steedman 1990). A common aspect of Sraffa’s treatment of these issues is that he takes the number of processes involved to be equal to the number of commodities. However, is that necessarily so? Schefold (1978) and Bidard (1986), among others, proved that while in some cases the answer is yes, in others it is no. This led to the adoption of the treatment of the problem in terms of inequalities (von Neumann 1945).

In appendix D of his book, Sraffa (1960) explains how the method of treating what is left of fixed capital at the end of the year as a kind of joint product is foreshadowed in some classical economists (see on this Kurz and Salvadori 2005a). In chapter X Sraffa presents his analysis of fixed capital, but limits it to the case in which only one machine is used, the efficiency of this machine is constant, and the machine is not transferable between sectors. The subsequent literature generalized the theory to cover the cases of variable efficiency, the joint utilization of machines and their transferability and varying degrees of capital utilization; for a summary account, see Kurz and Salvadori (1995: chs 7 and 9) and Salvadori (1999).

In chapter XI Sraffa (1960) presents his analysis of land. Actually Sraffa (1960: 74) refers to “Natural resources which are used in production, such as land and mineral deposits.” However, we know from the correction of the proofs of his book that in the last minute he dropped parts of a section devoted to what in his preparatory notes he had called “wasting assets” (see Kurz and Salvadori 2001: 290-93). The case of scarce natural resources such as land(s) makes it abundantly clear that relative prices and income distribution cannot be ascertained independently of the gross output levels of the different commodities. In the case of intensive diminishing returns a rent will emerge if the land under consideration is scarce, which is typically reflected in the coexistence of two methods of production by means of which either land itself or an agricultural product is utilized. It has also been confirmed that “fertility” (in the sense of the order according to which different lands are cultivated) is not an intrinsic prop­erty of lands, but depends on the rate of profits.

In a case in which output quantities change over time, the scarcities of lands are bound to change and with them prices, the rates of rent, and the rate of profits (or, alternatively, the real wage rate). A similar problem arises when exhaustible resources, such as oil or minerals, are taken into consideration. These have been investigated starting from a classical-Sraffian framework of the analysis (see Kurz and Salvadori 2015: ch. 16 for a review of the whole debate).

In appendix A Sraffa (1960: 90) explains how from the economic system one can extract a “smaller self-replacing system the net product of which consists of only one kind of commodity”. Sraffa calls such a miniature system a “sub-system”. It is also known as a “vertically integrated system”; for a formalization and elaboration of the concept, see Pasinetti (1988).

Sraffa’s book also provided the basis for a reformulation of the pure theory of inter­national trade, paying special attention to the fact that capital consists of heterogeneous produced means of production and showing that several theorems derived within the Heckscher-Ohlin-Samuelson trade model cannot be sustained anymore; see in particu­lar the collection of essays in Steedman (1979).

Production of Commodities by Means of Commodities was an important tool in inves­tigating issues in the history of economic analysis and has led to a reassessment and frequently the rejection of received views. A few examples must suffice. Steedman (1977) scrutinized Marx’s labour value-based reasoning and showed that it cannot generally be sustained. Kurz and Salvadori (2002) refuted Walras’s criticism of Ricardo and showed that the classical and the marginalist theory are fundamentally different. In a number of contributions Kurz and Salvadori (see, for example, 1998: ch. 4) related some of the so-called “new growth models” to the classical approach. They pointed out that there is an analogy between the classical assumption of labour being generated from within the system and the replacement of labour in new growth models by “human capital” or “knowledge”, a producible commodity.

Heinz D. Kurz and Neri Salvadori

See also:

Ladislaus von Bortkiewicz (I); Cambridge School of economics (II); Capital theory (III); Vladimir Karpovich Dmitriev (I); Income distribution (III); John Maynard Keynes (I); Alfred Marshall (I); Karl Heinrich Marx (I); Neo-Ricardian economics (II); John von Neumann (I); William Petty (I); Franςois Quesnay and Physiocracy (I); David Ricardo (I); Joan Violet Robinson (I); Paul Anthony Samuelson (I); Adam Smith (I); Robert Torrens (I); Value and price (III).

References and further reading

Aspromourgos, T. (2004), ‘Sraffian research programmes and unorthodox economics’, Review of Political Economy, 16 (2), 179-206.

Bidard, C. (1986), ‘Is von Neumann square?’, Zeitschrift fur Nationalokonomie, 46 (4), 401-19.

Clapham, J.H. (1922), ‘Of empty economic boxes’, Economic Journal, 32 (127), 305-14.

De Vivo, G. (2014), Catalogue of the Library of Piero Sraffa, Milan: Fondazione Raffaele Mattioli.

Freni, G. (2001), ‘Sraffa’s early contribution to competitive price theory’, European Journal of the History of Economic Thought, 8 (3), 363-90.

Freni, G. and N. Salvadori (2013), ‘The construction of the long-run market supply curves: some notes on Sraffa’s critique of partial equilibrium analysis’, in E.S. Levrero, A. Palumbo and A. Stirati (eds), Sraffa and the Reconstruction of Economic Theory, vol. 3, Sraffa’s Legacy: Interpretations and Historical Perspectives, Basingstoke and New York: Palgrave Macmillan, pp. 189-216.

Garegnani, P. (1970), ‘Heterogeneous capital, the production function and the theory of distribution’, Review of Economic Studies, 37 (3), 407-36.

Garegnani, P. (2012), ‘On the present state of the capital controversies’, Cambridge Journal of Economics, 36 (6), 1417-32.

Gehrke, C. and H.D. Kurz (2002), ‘Keynes and Sraffa’s “difficulties with J.H. Hollander”: a note on the history of the RES edition of The Works and Correspondence of David Ricardo’, European Journal of the History of Economic Thought, 9 (4), 644-71.

Gehrke, C. and H.D. Kurz (2006), ‘Sraffa on von Bortkiewicz: reconstructing the classical theory of value and distribution’, History of Political Economy, 38 (1), 91-149.

Harcourt, G.C. (1972), Some Cambridge Controversies in the Theory of Capital, Cambridge: Cambridge University Press.

Hayek, F.A. von (1931a), ‘Reflections on the pure theory of money of Mr. J. M. Keynes’, Economica, 11 (33), 270-95.

Hayek, F.A. von (1931b), Prices and Production, London: Routledge and Kegan Paul.

Hayek, F.A. von (1932), ‘Money and capital: a reply’, Economic Journal, 42 (2), 237-49.

Hume, D. (1938), An Abstract of a Treatise on Human Nature, ed. and introduced by J.M. Keynes and P. Sraffa, Hamden, CT: Archon Books.

Keynes, J.M. (1971-88), The Collected Writings of John Maynard Keynes, 30 vols, A. Robinson and D. Moggridge (eds), London: Macmillan. (In the text abbreviated as CW.)

Kurz, H.D. (ed.) (2000), Critical Essays on Piero Sraffa’s Legacy in Economics, Cambridge and New York: Cambridge University Press.

Kurz, H.D. (2009), ‘“If some people looked like elephants and others like cats, or fish...” On the difficulties of understanding each other: the case of Wittgenstein and Sraffa’, European Journal of the History of Economic Thought, 16 (2), 361-74.

Kurz, H.D. (2010), ‘Keynes, Sraffa, and the latter’s “secret scepticism”’, in B. Bateman, T. Hirai and C. Marcuzzo (eds), The Return to Keynes, Cambridge, MA: Belknap Press of Harvard University Press, pp. 184-204.

Kurz, H.D. (2012), ‘Don’t treat too ill my Piero! Interpreting Sraffa’s papers’, Cambridge Journal of Economics, 36 (6), 1535-69.

Kurz, H.D. and N. Salvadori (1995), Theory of Production: A Long-Period Analysis, Cambridge: Cambridge University Press.

Kurz, H.D. and N. Salvadori (1998), Understanding ‘Classical’ Economics: Studies in Long-Period Theory, London: Routledge.

Kurz, H.D. and N. Salvadori (2001), ‘Sraffa and the mathematicians: Frank Ramsey and Alister Watson’, in T. Cozzi and R. Marchionatti (eds), Piero Sraffa’s Political Economy: A Centenary Estimate, London, Routledge, pp. 187-216.

Kurz, H.D. and N. Salvadori (2002), ‘One theory or two? Walras’s critique of Ricardo’, History of Political Economy, 34 (2), 365-98.

Kurz, H.D. and N. Salvadori (2005a), ‘Removing an “insuperable obstacle” in the way of an objectivist analy­sis: Sraffa’s attempts at fixed capital’, European Journal of the History of Economic Thought, 12 (3), 493-523. Kurz, H.D. and N. Salvadori (2005b), ‘Representing the production and circulation of commodities in mate­rial terms: on Sraffa’s objectivism’, Review of Political Economy, 17 (3), 413-41.

Kurz, H.D. and N. Salvadori (2009), ‘Sraffa and the labour theory of value: a few observations’, in J. Vint, J.S. Metcalfe, H.D. Kurz, N. Salvadori and P.A. Samuelson (eds), Economic Theory and Economic Thought: Festschrift in Honour of Ian Steedman, London, Routledge, pp. 187-213.

Kurz, H.D. and N. Salvadori (2015), Revisiting Classical Economics: Studies in Long-Period Analysis, London: Routledge.

Mill, J. (1826), Elements of Political Economy, 3rd edn, London: Henry G. Bohn.

Morgenstern, O. (1931), ‘Offene Probleme der Kosten- und Ertragstheorie’, Zeitschrift fur Nationalokonomie, 2 (4), 481-522.

Napolitano, G. (2005), ‘Sraffa and Gramsci: a recollection’, Review of Political Economy, 17 (3), 407-412. Neumann, J. von (1945), ‘A model of general economic equilibrium’, Review of Economic Studies, 13 (1), 1-9. Pasinetti, L.L. (1988), ‘Growing subsystems, vertically hyper-integrated sectors and the labour theory of value’, Cambridge Journal of Economics, 12 (1), 125-34.

Pollit, B.H. (1990), ‘Clearing the path for “Production of Commodities by Means of Commodities”: notes on the collaboration of Maurice Dobb in Piero Sraffa’s edition of the “Works and Correspondence of David Ricardo”’, in K. Bharadwaj and B. Schefold (eds), Essays on Piero Sraffa: Critical Perspectives on the Revival of Classical Theory, London: Unwin Hyman, pp. 516-28.

Ranchetti, F. (2002), ‘On the relationship between Sraffa and Keynes’, in T. Cozzi and R. Marchionatti (eds), Piero Sraffa’s Political Economy. A Centenary Estimate, London and New York: Routledge, pp. 311-31.

Ricardo, D. (1951-73), The Works and Correspondence of David Ricardo, 11 vols, ed. P. Sraffa with the col­laboration of M.H. Dobb, Cambridge: Cambridge University Press.

Robinson, J.V. (1953), ‘The production function and the theory of capital’, Review of Economic Studies, 21, 81-106.

Roncaglia, A. (1978), Sraffa and the Theory of Prices, New York: Wiley, first published in Italian in 1975.

Salvadori, N. (1999), ‘Transferable machines with uniform efficiency paths’, in G. Mongiovi and F. Petri (eds), Value, Distribution and Capital, London and New York: Routledge, pp. 297-313.

Salvadori, N. and I. Steedman (eds) (1990), Joint Production of Commodities, Aldershot: Edward Elgar. Schefold, B. (1978), ‘On counting equations’, Zeitschrift fur Nationalokonomie, 38, 253-85.

Signorino, R. (2000), ‘Method and analysis in Piero Sraffa’s 1925 critique of Marshallian economics’, European Journal of the History of Economic Thought, 7, 569-94.

Signorino, R. (2001), ‘An appraisal of Piero Sraffa’s “The laws of returns under competitive conditions”’, European Journal of the History of Economic Thought, 8, 230-50.

Sraffa Papers, Trinity College Library, Cambridge, catalogued by Jonathan Smith, archivist; the references follow the Trinity College catalogue.

Sraffa, P. (1920), ‘Monetary inflation in Italy during the war’, thesis obtained in November 1920, Premiata Scuola Tip. Salesiana, Turin, trans. from the Italian by W.J. Harcourt and C. Sardoni (1993), Cambridge Journal of Economics, 17 (1), 7-26.

Sraffa, P. (1925), ‘Sulle relazioni fra costo e quantita prodotta’, Annali di Economia, 2, 277-328, English trans. L.L. Pasinetti (ed.) (1998), Italian Economic Papers, Bologna: Il Mulino, pp. 323-63, reprinted in H.D. Kurz and N. Salvadori (eds) The Legacy of Sraffa, vol. 1, Cheltenham, UK and Northampton, MA, USA: Edward Elgar, pp. 3-43.

Sraffa, P. (1926), ‘The laws of returns under competitive conditions’, Economic Journal, 36 (144), 535-50.

Sraffa, P. (1930), ‘A criticism. A rejoinder’, Economic Journal, 40 (March), 89-93.

Sraffa, P. (1932a), ‘Dr. Hayek on money and capital’, Economic Journal, 42 (1), 42-53.

Sraffa, P. (1932b), ‘A rejoinder’, Economic Journal, 42 (2), 249-51.

Sraffa, P. (1960), Production of Commodities by Means of Commodities, Cambridge: Cambridge University Press.

Sraffa, P. (1962), ‘Production of Commodities: a comment’, Economic Journal, 72 (286), 477-9.

Sraffa, P. (1991), Lettere a Tania per Gramsci, ed. V. Gerratana, Rome: Editori Riuniti.

Sraffa, P. and L. Einaudi (1930), ‘An alleged correction of Ricardo’, Quarterly Journal of Economics, 44 (3), 539-45.

Steedman, I. (1977), Marx after Sraffa, London: New Left Books.

Steedman, I. (ed.) (1979), Fundamental Issues in Trade Theory, London: Macmillan.

Steedman, I. (1988), ‘Sraffian interdependence and partial equilibrium analysis’, Cambridge Journal of Economics, 12 (1), 85-95.