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Sraffa and the Marshallian tradition*

2005; Taylor & Francis; Volume: 12; Issue: 3 Linguagem: Inglês

10.1080/09672560500239976

1469-5936

Annalisa Rosselli,

Economic Theory and Institutions

Abstract The paper retraces some of the stages in Sraffa's thinking about the work of Marshall, by drawing on unpublished material in the Sraffa archive from 1923 to 1930. It argues that Sraffa transformed his dissent – which was based on ideological grounds – into a ‘quest for the fatal error’ to demolish the logical construction of Marshallian theory. Some of his attacks were successful (for example, the critique of the relation between costs and output); other attempts failed (the critique of the ‘normal rate of profit’ and the critique of the concept of marginal productivity) since Sraffa could not find enough textual evidence to support his position. Keywords: SraffaMarshallCambridge SchoolIncreasing and decreasing returnsMarginalism Notes * My thanks go to Heinz Kurz, Cristina Marcuzzo, Nerio Naldi and the referees of this journal for useful comments and suggestions. I wish to thank Professor Garegnani for granting permission to quote from Sraffa's papers. 1 This is a recurrent expression of Sraffa's. See D2/4/3.120 and D3/7. Sraffa's papers are conserved in the Wren Library of Trinity College, Cambridge. References to them follow the catalogue prepared by Jonathan Smith, archivist. The words or passages that Sraffa underlined have been put in italics. All emphases are in the original. 2 Letter from Sraffa to Charles Parrish Blitch, 6 October 1975. A photocopy of the letter, which is still in the possession of the receiver, was kindly given to me by Nerio Naldi. A draft is among Sraffa's papers (C26/1). 3 A file (D1/11) brings together notes by Sraffa that could date back to LSE times. The impression we receive from these is that Sraffa was interested in assessing the effects of high wages on labour supply, through considerations on the variations in the disutility of labour and the utility of income. The references to Marshall are few, while there are many to Edgeworth, Jevons, Bernoulli, Pigou, Robertson and Cassel. 4 Marshall's Principles would be the text adopted by Sraffa in his years of teaching at Perugia (Naldi Citation2001). 5 The copy is conserved in the Wren Library (Sraffa 2591). 6 ‘Quello che Marshall dice della “representative firm” è contraddittorio con il paragrafo precedente e non ha alcun valore pratico: è messo lì tanto per concludere’. The translation of the passages from Sraffa's papers is always mine. The original text in Italian is given in the footnotes. 7 This point – that changes that occur over time must be dealt with separately by other parts of economic theory and cannot be confusingly introduced into the problem of price determination – will be raised again in the notes of summer 1927 (see Garegnani Citation2004) and in the debate with Shove in 1930 (see Rosselli Citation2005). 8 Sraffa always grew impatient with Marshall when he ascribed characteristics of capitalism to characteristics of the human spirit, for example, when he attributed the increase in saving that distinguished his age from previous ages, to a greater willingness to ‘incur present ills for the sake of future benefits’ (Marshall Citation1920: 680), ignoring the fact that, with the introduction of machinery, capitalism had overcome the constraints imposed on production by limited resources and population. Thus, Sraffa observed, far from being a matter of the individual growing more unselfish towards future generations, this happened simply because industrialization had opened up fruitful alternatives to the opulent consumption of the leisured classes of the past. 9 ‘Se per calcolare i profitti bisogna tener conto di quelli che perdono il capitale, per calcolare i salari bisogna tener conto dei “salari” dei disoccupati, dei soldati, di quelli che muoiono per il lavoro ecc’. 10 ‘Perché i profitti sono compresi nel costo di produzione e la rendita no? Perché, dice M[arshall], il profitto è necessario per indurre la gente a produrre capitale (mediante l'attesa), mentre la terra c'è (“è prodotta”) in ogni caso. Si obbietta: Il profitto (interesse) è necessario perché il capitale venga prestato, non perché venga prodotto: anche la rendita è necessaria perché la terra venga prestata […]neppure il profitto deve essere compreso nel costo di produzione: esso diventa, come la rendita, un “surplus”.’ 11 The course was first held in 1928 – 9, but it is possible that the specific pages where the issue is addressed (D2/4/3. 61 – 5), and whose numbering shows they were added, were written in the following year. 12 The title is in Italian: ‘Rapporti causali fra prezzo, domanda e offerta’. It is hard to determine whether the project was previous or subsequent to the 1925 article. However, it appears more probable that Sraffa had begun to reflect separately on the subject of symmetry between demand and supply, as attested by these notes, and on the ‘empty economic boxes’ debate arising over Clapham's 1922 article, as demonstrated by the analysis of the hypotheses giving rise to increasing and decreasing costs contained in D1/51.11. Subsequently he might have decided to combine the two subjects in the 1925 article, where the non-proportionality of the total cost of production to the quantity produced is regarded as the foundation of the Marshallian ‘fundamental symmetry’ (Sraffa Citation1998: 325 – 6). 13 ‘Questa nota mostra luminosamente come tutto il ragionamento non regga. […] come è possibile dire che un quintale di patate remunera il coltivatore di una spesa di £1 se non si considera il prezzo delle patate? Come si possono comparare due cose eterogenee se non sulla base comune del loro valore (o utilità, o prezzo)? […] Ammesso e non concesso che tale astrazione dalle variazioni di valore non abbia importanza pratica nel caso di un solo farmer, in ogni caso essa rende la teoria inapplicabile all'agricoltura nel suo complesso: un aumento del 10% nel capitale e lavoro impiegati nell'agricoltura e nella quantità dei prodotti, farebbero salire i prezzi dei primi e diminuire fortemente il prezzo dei secondi.’ 14 Mongiovi (Citation1996: 215) defines Sraffa's ‘momentary interest in the theory of monopoly’ as ‘an interpretational puzzle’ and interprets it as a ‘step backward’. 15 ‘La distinzione tra costo e utilità, considerate come quantità diverse indipendenti e contrapposte – distinzione che sta alla base di tutto il sistema di Marshall – non regge quando le due quantità siano considerate come “quantità psichiche”. 16 ‘[…] quantità di lavoro non differenziato – un'astrazione questa che è di gran lunga più accettabile che non la quantità di piacere.’ 17 The first part of the 1925 article found ample expression in the Lectures, but never found its way into a publication in English. 18 Keynes wrote to Pigou on 2 January 1928, after reading the first version of the article: ‘I should have thought that the representative firm was a conception which was – deliberately – of too vague a character to support the precise mathematical superstructure.’ The letter is conserved in Cambridge, King's College Modern Archive, Keynes papers, EJ/1/3/3. 19 Letter from Keynes to Robbins, 14 March 1928, Keynes Papers, EJ/1/3/25. 20 Shove's article, on which he had been working for over a year, appeared as a comment on Robertson's essay, at Keynes's request (See Rosselli Citation2005). 21 Keynes wrote to his wife on 24 February 1930: ‘Tonight Dennis and Gerald and Piero are going to dispute together at my economics Club and a large company will come to hear them. I shall need all my tea cups and more than all my chairs.’ Keynes Papers, PP/45/190/4/207. Keynes asked Sraffa (20 February 1930, Add. ms. a 427/22) to invite Robbins, but we have no evidence that he accepted the invitation. 22 ‘Caro professore, […] avrà visto il Symposium nell'Ec. Journal […] Lo abbiamo anche, dirò così, recitato al Pol. Ec. Club di qui, e si è discusso per quattro ore: dopo di che Pigou è dovuto andare in casa di salute per una settimana – il medico dice che la colpa era dell'aria affumicata della stanza, ma noi abbiamo un certo rimorso.’ I thank Nerio Naldi for drawing this letter to my attention. The letter is preserved in the Archives of the Fondazione Einaudi, Torino. 23 When Sraffa wrote his contribution to the Symposium, the impossibility of keeping distribution and theory of value separate had already appeared to him quite evident. In fact, the remuneration of factors depends on the quantity demanded of all the commodities together, which in turn depends on the prices of the single commodities. See the lecture added in 1929 in D2/4/3.122 – 7.