Saturday, June 1, 2013

Garegnani on Sraffa, Ricardo and Marx

I was going to write something about the Ricardian roots of Marx, but in all fairness a lot of ink has already been spilled on the subject. Here is the reply to the question about the relation between Sraffa and Marx, given by Garegnani in 1978 (here for the whole interview; subscription required):
"The conception which some people have of this relationship [Sraffa and Marx] seems to me quite misleading. And in order to reach a correct understanding of it, we first have to grasp the true relationship between Marx and Ricardo. I have argued elsewhere that this latter relationship should be seen in terms of a strict continuity at the level of economic analysis. Of course, unlike Ricardo and the classical economists, Marx sought to show that the capitalist mode of production is no more permanent than the modes which came before it. But this does not contradict my previous point, since it is perfectly normal that a given theoretical approach should reveal to one author a series of consequences that were not brought to light by his predecessors. That was precisely the relationship, for Marx, between his ‘critique of political economy’ (that is, his demonstration of the transitory character of capitalism) and the work of Ricardo. In fact, Marx deduces the transitory character of capitalism from a kernel of analyses whose object is what he often called ‘the inner nexus of bourgeois economic relations’—essentially, the antagonistic relationship between wages and profits. Now, as Marx himself repeatedly stated, this ‘inner nexus’ was discovered by the classical economists, and analysed especially in Ricardo’s theory of surplus-value and profits. It was precisely this theory which he took up and developed in his ‘critique’. Once this continuity between the classical economists and Marx has been understood, it is easy to grasp the true relationship between Sraffa and Marx. For a revival of the classical approach is possible only if it starts from the highest point of development attained in the past—that is to say, the point at which we find it in Marx’s work."
This is why in the forthcoming documentary on Capitalism, written and directed by documentary filmmaker Ilan Ziv and organized around key historical debates and thinkers, I argued that Marx should be, contra-Samuleson, be seen as a major Ricardian.

On Sraffa and the labor theory of value this is what Garegnani had to say:
"This brings us back to the second of the three aspects of Sraffa’s work: namely, his proposed solution to the problem of value based on more general hypotheses than those which assert that commodities exchange in accordance with the labour embodied in them. Solving this problem and abandoning the labour theory of value are, in reality, two sides of the same coin: any living theoretical approach has to develop, undergoing modification and modifying its own propositions. Now, it is indeed sometimes said that Sraffa has thrown Marx’s economic theory into crisis. But in order to understand this point of view, we must recall the significance attached to the labour theory of value by that Marxist tradition which arose at the end of the nineteenth century, following the marginalist attack on Marx. I have argued elsewhere that the positions developed at that time were of an essentially defensive character; and that they reflected a temporary state of theoretical weakness which is now, largely thanks to Sraffa, in the process of being overcome.
This being said, however, it is important to remember that Sraffa created only the premises for a revival of the classical and Marxist theoretical approach. He did this by clarifying anew the basic elements of that approach, and by providing a solution to the problems of value-theory that had remained unanswered. It would thus be a mistake to seek in Production of Commodities what is not actually there: to seek, that is, a theory of capital accumulation and crises, or even a theory of the way in which relations between the two social classes determine the division of the product between wages and profits. I would maintain that, so far as all these problems are concerned, Sraffa refers us to the place where they receive the most advanced treatment in the framework of this theoretical approach—essentially to Marx’s Capital, and to all the work which has to be done in order to develop Marx’s ideas in conformity with the present state of reality and economic knowledge."
Note that Sraffa suggested that his solution, based on the standard commodity, could be interpreted as akin to Smith's labor commanded theory of value, and as such could (and I would say should) be seen as a logically coherent version of the labor theory of value (discussed in this previous post).

PS: As I was writing this I saw that Robert Vienneau has just posted on the same topic here.


  1. Since the Sraffians are always harping on about Marx's alleged mistakes, inconsistencies, etc., it's odd that they are so anxious to involve him in their project of reviving Ricardianism, via references to Marx's supposed "Ricardian roots".

    Almost the first words that Marx ever wrote about political economy are:

    "in his demonstration that the cost of production is the sole factor in the determination of value Mill succumbs to the error, made by the whole Ricardo school, of defining an abstract law without mentioning the fluctuations or the continual suspension through which it comes into being. If e.g. it is an invariable law that in the last analysis - or rather in the sporadic (accidental) coincidence of supply and demand – the cost of production determines price (value), then it is no less an invariable law that these relations do not obtain, i.e. that value and the cost of production do not stand in any necessary relation." (Notes on Mill, Penguin translation)

    Evidently Marx did not at that point think of himself as a member of "the Ricardo school", so just when is he supposed to have joined it?

    On this basis one might just as well go on about Marx's "Smithian roots", "physiocratic roots", etc., etc.

    1. This is extermelly silly. Marx, Keynes, Kalecki and all the great economists commit mistakes. That does not imply that the central message is lost. The problem with some Marxist, which seems to be the your case, is that any critic is taken as meaning that everything is wrong.

      Marx thought that aggregate total surplus value corresponded to total profits, even if prices of production deviated from embodied labor. As a result, on the basis of the embodied labor it was still possible to obtain the correct rate of profit. As it turns out, there is no reason for positive and negative deviations of prices of production from the labor values to cancel out. You cannot argue with the algebra.

      However, the labor theory of value (as corrected by Sraffa), the idea of exploitation, the possibilities of crises of realization are all possible and relevant. Marx goes on, in spite of some Marxists.

  2. Matias,

    Using sraffian tools (the reduction to dated labour quantities) one specific result can be obtained and easily checked: total value+total surplus value=total prices in wage units (those prices being calculated at the rate that equals total profits and total surplus value and which corresponds to the marxian rate of profit in value terms)

    Thus, a strong relation of value and price systems is found where it is possible to go from a value system to a price system through the use of the surplus value and the marxian rate of profit.

    "Total surplus" value Can be obtained substracting value and paid value (múltiple inf by wage in value units)
    "Total profits" can be obtained by substracting the sum of prices (measure in wage units) and the sum of values.
    This is one equation and one unknown: "r". There is one value of r that equals both totals. This r is corresponds to the Marxian rate, as I said.

    What is the meaning of this finding? I don't know. After using the wage as the unit of prices, it dissapears and total prices never meet with total values at any given rate of profit. That leaves open the distribution of surplus.

    See Vicenc Melendez-Plumed

    The rate of profit at which total prices equal to total values (once the wage is not the unit anymore and is made equal to its labour content) is not the one at which total profits are equal to total surplus value or to the rate of profit of the eigenvalue, as it is well known.


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