A New Perspective on Sraffa

Abstract

In the ‘Preface’ to the Production of Commodities by Means of Commodities (PCMC) Sraffa makes four specific remarks that are essential to understanding his book. These remarks are: (i) do not think in terms of equi-librium of demand and supply; (ii) there is no assumption regarding returns to scale; (iii) this standpoint is the standpoint of classical political economy from Adam Smith to Ricardo; and (iv) this book is a prelude to a critique of modern economic theory and if the propositions of the book are proved to be correct then it might provide a foundation for launching a critique of the modern economic theory. Unfortunately, none of these clear-cut statements by Sraffa have been given careful attention either by his followers or his critics in interpreting his book. In this chapter, I discuss the above four points to develop a new perspective on Sraffa’s book. In Section ‘Equilibrium of supply and demand and returns of scale’, I take up points (i) and (ii) and try to motivate a new interpretation of Sraffa’s equations. In Sections ‘A standpoint of classical political economy’ and ‘The foundation for a new critique of modern economic theory’, points (iii) and (iv) are taken up respectively, albeit in a highly brief and provisional manner. Here I have decided to state my position without giving it too much of a controversial air, as I have already presented my refutations of the received interpretations else-where (Sinha, 2007, 2010, 2012; Sinha and Dupertuis, 2009a, b).