Monday, February 16, 2015

Sraffa's contributions to economics: a crash course

So a friend asked what to read in order to understand Sraffa's contributions to economics. For some reason the Production of Commodities by Means of Commodities is considered a very difficult book to read. I find that a strange argument. It is similar to the notion that the General Theory is a badly written book, as in difficult to follow (not necessarily the content, but the style), since supposedly Keynes was not a good writer (he actually was a bestseller author, at least his Economic Consequences of the Peace, and a prolific writer for the general public, meaning clear and popular).

Sraffa's book explains in plain English most of the essential concepts in his book. I would suggest the reading Part I as one that can be taken without any problem for those with some basic training in linear algebra. In addition, below I'm posting the links to 7 previous posts on Sraffa's contributions to economics, which might be helpful for some.
  1. Sraffa and the Marshallian System
  2. Sraffa, Marx and the Labor Theory of Value (LTV)
  3. Sraffa, Ricardo and Marx
  4. The Standard Commodity and the LTV
  5. The Capital Debates
  6. Microfoundations of Macroeconomics and the Capital Debates
  7. Free Trade and the Capital Debates
Note that these posts were not written to provide a didactic introduction to Sraffa's economics. Yet, one can follow from them Sraffa's critique of marginalist economics (in the Marshallian tradition) in 1, the relevance of his contribution for the revival of Marx and of a modified Labor Theory of Value in 2, and how that does not make him Ricardian (meaning anti-Marxist) in 3, how he solves the limitations of the LTV and provides a version of it with the Standard Commodity in 4, how his contributions undermine the internal logic of marginalist (supply and demand) arguments in the capital debates in 5, how the capital debates are central for macroeconomics in 6, and how the capital debates have direct relevance for a simple policy issue like free trade in 7 (for those that think that Sraffians don't care about economic policy).

If I had to suggest books to read on Sraffa's contributions, I would say that Pasinetti's Lectures on Theory of Production, and Kurz and Salvadori's Theory of Production are the essential books. For a more macroeconomic oriented book the one would be Bortis' Institutions, Behaviour and Economic Theory.

1 comment:

  1. Hi Matias, that's a very nice post and makes it a lot easier to reach those old posts.
    In order not to comment on a 3 years old post, I'll do it here. Don't you think that using "full-cost" and "mark-up" in your 6th point you may confuse people that are not familiar with the sraffian literature? What I mean is the confusion that Franklin pointed out in his post about normal prices and full-cost pricing.
    I believe that this is a minor thing, since it is not impossible to reconcile those two traditions.. however, it may give rise to this kind of problem.


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