Sraffa,s Unpublished Papers

Difference vs. Change

In a manuscript of several pages entitled “Difference vs. Change,” contained in a folder with the title “After 1927,” which can safely be assumed to have been written in the first period of his constructive work (1927-30), Sraffa made an attempt to clear up what he considered to be a fundamental confusion in the theory of value.

The general confusion in all theories of value (except Marx probably) must be explained by the failure to distinguish between two entirely distinct types of questions and the universal attempt of solving them both by one single theory.

The two questions are:

1) What determines the [difference in the (?)] values at which various commodities are exchanged in a given market on a given instant?

2) What determines the changes in the values of commodities at different times? (e.g. of one commodity). (Sraffa Papers, D3/12/7/115; Sraffa’s underlinings are italicized here)³

Sraffa, after some deliberation, concluded, “The first problem gives rise to a geometrical theory, the second to a mechanical one” (Sraffa Papers, D3/12/7/117). With regard to the first problem/theory he adds that “its object is, as it were, the photograph of a market place” and that it “must be solved by the theory of value. The second, I think, can only be solved by the theory of industrial fluctuations. All the old confusion between cause and measure of value is connected with the mixing up of the two questions” (ibid.; emphasis added). Against the background of this distinction, he then argued that Marshall’s theory “can only be understood as an attempt to solve the first question in terms of the second” (ibid.). What about Marx’s theory? Sraffa observed that Karl Marx wanted to tackle both problems in terms of a single theory by focusing attention on what is common to all commodities.

What to make of this? First, the metaphor of photograph is again invoked with regard to markets and the relative prices solving the corresponding equations. The theory has to capture the constellation of forces responsible for the observed prices, and the picture shot is supposed to expose them. As regards the search for a “common substance,” Marx’s (in)famous tertium comparationis, the question is, of course, what it is and what its properties are, whether it is unique, whether it can be known inde­pendently of solving the equations of production, whether it remains the same when time goes by and so on. As regards intertemporal (and also interspatial) comparisons, there seems to be no presumption that there is a common substance “embodied” in commodities produced at different times, the “substance,” if any, is rather bound to change over time.

In this document, the metaphor of a photograph appears to be invoked as an alter­native to that of a motion picture: a single photograph can highlight elements one might easily lose sight of when confronted with a quick sequence of snapshots as in a film, but the dynamic aspects can, at least partially, be lost.

Working Capital

In a note entitled “Working capital,” stemming from November 1927, Sraffa reflected on a lecture by John Maynard Keynes he had attended, in which Keynes had argued that “Circulating capital is exceedingly small.” After some deliberation Sraffa concluded that “W[orking] capital is exceedingly small because it is the photograph of what exists at any one moment, not of what has been spent during the period.” Hence the metaphor of the photograph is misleading in the present context or, rather, it provides only very limited information that can easily be misread.

Sraffa here refers to the distinction between stocks and flows. Clearly, a photograph can only depict stocks, but as Sraffa’s eventual treatment of fixed capital using the joint­products method shows, stocks may be represented as a sequence of flows and actually this representation is much more useful. Once again the question is asked how much a single photograph can show or explain compared to a motion picture, but in the present context a photograph is clearly inferior, because it may provide a distorted picture of reality.

Time, Labor, Value

Finally, we turn to a manuscript of three pages dated “Oct. 1929,” in which Sraffa discusses anew what a theory of value has to accomplish (Sraffa Papers, D3/12/13/1 [1—3]). At the time he wrote it, he had already elaborated the method of reduction of prices to dated quantities of labor and felt that the Bohm-Bawerkian concept of “period of production” could be employed as an alternative to his equations. We transcribe the manuscript in full.

Sraffa introduces the issue in the following way: (Sraffa Papers, D3/ 12/ 13/ 1[1]-[3]; here words underlined once are italicized and words underlined twice are underlined once and italicized).

The real question is:

Given the situation of an / (number of) / industry / (completely integrated vertically) / at one instant (i.e. given all physical, chemical, etc. connotations⁴ and measurements of the situation, but excluded all economic connotations, especially values, utilities, productivities, etc.), and assuming all men exactly alike to one another (both for wages they receive, and value they add to the product), is it possible to deduce the value of its product per unit of time?

Or, is the above possible, given the same data for, not an instant, bur for a period of time, such that all the different operations should be performed within it? (more exactly: such a propor­tion of them that the defect should be smaller than any assigned proportion.) (This would be, roughly, a year in agriculture; but one day, or perhaps one hour in case of continuous shifts, in the motor industry).

He goes on:

As regards labour, the answer is simple enough: so far as it is concerned, value will be propor­tional to the number of workers employed.

It is with capital that difficulties arise: for, while for labour we have defined a measure by assuming all workmen to be equal, we have no such measure for capital: it is composed of hetero­geneous objects, which cannot be measured, “qua” capital, by number or weight, etc.

How to deal with this problem?

Suppose the above difficulty is overcome by measuring capital as accumulated labour; i.e. adopting the second question [sic! The reference ought to be to equation, meaning the approach in terms of periods of production rather than simultaneous equations], and assum­ing that all the various acts of labour are performed within a period of production, and that their order of succession is known.

Thus, “time” is part of our assumptions, i.e. they are not instantaneous: but it is a peculiar time, or perhaps only a part of time. It admits only of cyclical change, i.e. it is a sort of circu­lar time: changes take place, but only recurrent changes, which periodically lead back to the original position: no permanent, or “true,” change is allowed.

With these assumptions we can go as far as the second equations [i.e., with a surplus], and also introduce rent (to some extent: but we must assume knowledge of wages (or of rate of interest). To dispense with the last knowledge, we must pass to the “marginal” analysis: and this involves knowledge (and possibility) of possible changes—different from anything that actually occurs, in the course of the “steady process.” How can this difficulty be overcome?

Sraffa continues:

Clearly, we must reduce all the data to things that actually happen, excluding inexistent possibilities. Only such things are measurable, and can enter the theory as “knowns,” or “constants”; and, in reality, only really happening things can be real causes and determine effects.⁵

This notion of time is important: it really substitutes “instantaneous photographs” as opposed to ordinary time.

It is, in effect, equivalent to the physicist’s dt, as understood by Russell (Outline of Phil. [1927], p. 122)⁶—a time in which effects follow causes, but so closely that there is no room either for dispersion or for entering of foreign influences: dt does this by differentiation (making the time so short as actually to leave no room for change in circumstances: the cause & effect are perfectly contiguous—nothing is in between)—our “time” does this by “assuming” away all changes, (i.e. “coeteris paribus”? no: by positing the problem in the form of finding the condi­tions of repetition indefinitely, or even once).

This conception of time enables us to take into account, not only stocks (as the instantaneous view does) but also steady or cyclical flows (which that does not), while still using the geomet­rical model. (italics added)

Once again, photograph and motion picture are contrasted, but now, with reference to a repetitive or self-replacing process, an appropriately redefined concept of the for­mer is considered to capture adequately the case under consideration. The kind of photograph Sraffa speaks of cannot be arbitrary, and, strictly speaking, it cannot be a one-shot snapshot but rather a picture (or sequence of pictures) that contains all the necessary information concerning an entire period of the production of commodities by means of commodities. It conforms to Roncaglia’s snapshot of a cycle of production of the system.

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