#sraffa

[sraffasnotes-blog]

November 1927, D3/12/11:15; E2.14.iv

[historyofeconomics]

[Classical political economy] was a burning house which threatened to set to fire the whole structure and foundations of capitalist society ‒ it was forthwith removed.

Piero Sraffa (1927)

[edwad]

On Saturday I had a long talk with Sraffa about his work. It is very interesting and original—but I wonder if his class will understand it when he lectures . . . Sraffa is in so much intellectual ferment and excitement about his ideas since I said that I thought there was something in them that he walks very fast up and down his room all day thinking about them. It is impossible for him to write them down, because as soon as he thinks about them, he has to start walking again.

Keynes (1927)

[sraffasnotes-blog]

November 1927, D3/12/4: 10; A5.9

History

Classical Political Economy (The age of Ricardo) or A. Smith?

from Petty to Ricardo.

Right concept[ion] (fundamental assumptions)

primitive, rudimentary technique

(A. Smith had strong “vulgar” tendencies: he can truly be said to be the “founder of modern economics”!)

Vulgar Political Economy (the age of Mill)

From Malthus to Stuart Mill

All wrong here: they have the wrong conceptions of modern economics and the rudimentary technique of the classical

Period dominated by Mill: Marx stands here towering as the last of the classical amongst the vulgar, just as Smith stood isolated among the classicals, being the first of the vulgars.

Economics [(the age of Marshall)], since Jevons + Co, and Marshall

Highly refined technique, rotten conceptions and fundam. assumptions

But technique so highly perfected that sometimes compels them unconsciously to modify their conscious assumptions (justly contradicting themselves) and thus reaching partially true conclusions

Note that at the end of the classics developed primitive socialism (Owen, Hodgskin) and caused Vulgar P.E. At the end of vulgar period came Marx and caused economics.

[sraffasnotes-blog]

November 1927, D3/12/4: 2 (2); A5.2.ii

What had happened in the meantime, to change so much the mind of the economists, and induce them to scrap all that had been done up to that time? (It was in fact scrapping the whole: Jevons, Preface, + Cannan, Theories, 379–383, “must be visited with almost unqualified condemnation” are right, from the point of view of Economics).

Socialism has been the cause of all this. In fact, classical P. E., with its surplus to be arbitrarily divided, leads straight to Socialism. When after the death of Ricardo the first timid attempts of using socialistically his Theory of value were made (Hodgskin, Thompson: the were misguided if (?) they used the moral argument that labour produces everything as Proudhon, but not Marx did), Senior + Mill + Cairnes fol rallyied to the defense by making cost psychological.

But when the mass attack of Marx, and the threat of the rampant International [and the Paris Commune] came, simultan a much more drastic defence was called for: not only sacrifice, but utility, ‒ and simultaneously J. M. W. and their success. The classical economy was becoming too dangerous as a whole, it had to be scrapped bodily. It was a burning house which threatened to set to fire the whole structure and foundations of capitalist society ‒ it was forthwith removed.

(Mention Rae, Ferrara, [Carey?] Scharling cost of reproduction as a link between disutility + utility, to justify the passing from one to the other)

[sraffasnotes-blog]

Summer 1927, D3/12/3: 73; A4.25

Tavolozza

Demand and price of coffins, wedding cakes

[historyofeconomics]

The propositions of M[arx] are based on the assumption that the comp[osition] of any large agg[regate] of commodities (wages, profits, const[ant] cap[ital]) consists of a random selection, so that the ratio between their aggr[egate] (rate of s[urplus] v[alue], rate of p[rofits]) is approx[imately] the same whether measured at 'values' or at the p[rices] of prod[uction] corresp[onding] to any rate of s[urplus] v[alue]. This is obviously true, and one would leave it at that, if it were not for the tiresome objector, who relies on hypothetical deviations: suppose, he says, that the capitalists changed the comp[osition] of their consumption (of the same aggr[egate] price) to commod[itie]s of a higher org[anic] comp[osition], the rate of s[urplus] v[alue] would decrease if calc[ulated] at 'values', while it would remain unchanged at p[rices] of p[roduction], which is correct? - and many similar puzzles can be invented. (Better: the cap[italist]s switched part of their consumption from comm[oditie]s of lower to higher org[anic] comp[osition], while the workers switched to the same extent theirs from higher to lower, the aggr[egate] price of each remaining unchanged...) It is clear that M[arx]'s pro[position]s are not intended to deal with such deviations. They are based on the assumption (justified in general) that the aggregates are of some average composition. This is in general justified in fact, and since it is not intended to be applied to detailed minute differences it is all right. This should be good enough till the tiresome objector arises. If then one must define which is the average to which the comp[osite] should conform for the result to be exact and not only approximate, it is the St[andard] Comm[odity]... But what does this average 'approximate' to? i.e. what would it have to be composed of (what weights sh[oul]d the average have) to be exactly the St[andard] Com[modity]? i.e. Marx assumes that wages and profits consist approximately of quantities of [the] st[andard] com[modity].

Piero Sraffa

[sraffasnotes-blog]

Summer 1927, D3/12/3: 15; A4.4.xi

But later, having been advocated by Marx to beat the capitalists, it was necessary for the defenders of the present system to devise a new theory, the utility theory of value.

As to Ricardo, it should not be thought that he was consciously biassed in his theory, that he was the champion of the rising capitalist against the landlord. This accusation was raised in his face in parliament (see Cannan, Ricardo in Parliament, Ec. J. 1892) and he succesfully cleared it out [away] by showing that in fact his property mainly consisted of land. It is of course not necessary for an economist to belong to a given class, or to have private interests at stake bound with that class in order that he should be crossed. It is enough for him to believe that one is a progressive class, that its success will be in the interest of majori community as a whole to justify him.

As to Marx, the fact that the utility theory of value had been found several times before (by Cournot, Dupuit, Gossen) and had fallen flat, while when it was again almost simultaneousley published by Jevons, Menger and Walras in the years immediately following the publication of Vol I of Capital, found suddenly a large body of opinion prepared to accept it and support it, is significant enough (Ashley, Present Pos. of P. E., Ec. J. 1910?)

[Note that the later development of Marshall, which was thought to be quite as effective in pulling down the basis of Marx's theory of value, is not at all incompatible with it]