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Piero Sraffa

Piero Sraffa (August 5, 1898 September 3, 1983) was an influential Italian economist whose book Production of Commodities by Means of Commodities is taken as founding the Neo-Ricardian school of Economics.

Contents


Early life

He was born in Turin, Italy, to a wealthy Italian Jewish family, to Angelo and Irma Sraffa.[1] His father was a Professor in commercial law and later dean at the Bocconi University in Milan. Sraffa studied in his town and graduated at the local university with a work on inflation in Italy during and after World War I. Notably, his tutor was Luigi Einaudi, one of the most important Italian economists and later a president of the Italian Republic.

From 1921 to 1922 he studied in London at the London School of Economics. In 1922 he was appointed as Director of the provincial labour department in Milan, then as Professor in Political economy first in Perugia, and later in Cagliari, Sardinia. In Turin he had met Antonio Gramsci (the most important leader of Italian Communist Party). They became close friends, partly due to their shared ideological views. He also was already in contact with Filippo Turati, perhaps the most important leader of Italian Socialist Party, whom he allegedly met and frequently visited in Rapallo, where his family had a holiday villa.

In 1925, he wrote about returns to scale and perfect competition, underlining some doubtful points of Alfred Marshall's theory of the firm. This was amended for British readers and published in 1926 as The Laws of Returns under Competitive Conditions.

Major works

In 1927, Sraffa's yet undiscussed theory of value,[2] but also his friendship with Antonio Gramsci (a risky and compromising endeavor in the context of the Italian fascist regime, considering Gramsci had previously been imprisoned; Sraffa had brought him the material, literally pens and paper, with which Gramsci would write his Prison Notebooks), brought John Maynard Keynes to prudently invite Sraffa to the University of Cambridge, where he was initially assigned a lectureship.

That Sraffa hated lecturing is normally explained by his shyness. But perhaps he declined teaching an economic theory he found wanting. So, he stopped collaborating in the making of Keynes' General Theory as Keynes used a subjective propensity to consume. After a few years, Keynes created ex novo for Sraffa the charge of Marshall Librarian.

Sraffa joined the so-called "cafeteria group", together with Frank P. Ramsey and Ludwig Wittgenstein, a sort of informal club that discussed Keynes's theory of probability and Friedrich Hayek's theory on business cycles. In 1939, Sraffa was elected to a Fellowship at Trinity College.[3]

Ricardo's works and correspondence

John Eatwell has written of Sraffa's work on Ricardo:

[Sraffa's] reconstruction of Ricardo's surplus theory, presented in but a few pages of the introduction to his edition of Ricardo's Principles, penetrated a hundred years of misunderstanding and distortion to create a vivid rationale for the structure and content of surplus theory, for the analytical role of the labor theory of value, and hence for the foundations of Marx's critical analysis of capitalist production.[4]

Sraffian economics

Sraffa's Production of Commodities by Means of Commodities was an attempt to perfect Classical Economics' theory of value, as originally developed by David Ricardo and others. He aimed to demonstrate flaws in the mainstream neoclassical theory of value and develop an alternative analysis. In particular, Sraffa's technique of aggregating capital as dated inputs of labour led to a famous scholarly debate known as the Cambridge capital controversy.

Economists disagree on whether Sraffa's work refutes neoclassical economics. Many post-Keynesian economists use Sraffa's critique as justification for abandoning neoclassical analysis and exploring other models of economic behavior. Others see his work as compatible with neoclassical economics, as developed in modern general equilibrium models, or unable to determine a long-period position, just like the Walrasian approach.[5]

Nonetheless, Sraffa's work, and particularly his interpretation of Ricardo and his Production of Commodities by Means of Commodities (1960), is seen as the starting point of the Neo-Ricardian school in the 1960s. His approach there has been described as serving "to help judge Ricardo's editor and to illuminate the unity in [his] scientific vision, from before 1926 until death in 1983."[6][7]

Personal connections

As said above, Sraffa is known also for his close friendship with Italian Marxist thinker Antonio Gramsci and for being instrumental in securing Gramsci's Prison Notebooks from the Fascist authorities after the latter's death in 1937. Norman Malcolm famously credits Sraffa with providing Ludwig Wittgenstein with the conceptual break that founded the Philosophical Investigations, by means of a rude gesture on Sraffa's part:[8]

Wittgenstein was insisting that a proposition and that which it describes must have the same 'logical form', the same 'logical multiplicity', Sraffa made a gesture, familiar to Neapolitans as meaning something like disgust or contempt, of brushing the underneath of his chin with an outward sweep of the finger-tips of one hand. And he asked: 'What is the logical form of that?'

In the introduction to Philosophical Investigations, Wittgenstein mentions discussions with Sraffa over many years and says: "I am indebted to this stimulus for the most consequential ideas in this book".

Sraffa was described as a very intelligent man, with a proverbial shyness and a real devotion for study and books. His famous library contained more than 8,000 volumes, now partly in the Trinity College Library. A popular anecdote claims that Sraffa made successful long-term investments in Japanese government bonds that he bought the day after the nuclear bombing on Hiroshima and Nagasaki.[9] Another version of this is that Sraffa bought the bonds during the War, when they were trading at distressed prices, as he was convinced that Japan would honour its obligations (Nicholas Kaldor pages 66 67).[1]

In 1972, he was awarded an honorary doctorate by Paris's university (Sorbonne), and in 1976 he received another one from Madrid's Complutense university.

Bibliography

  • Sraffa, Piero, 1926, "The Laws of Returns under Competitive Conditions", Economic Journal, 36(144), pp. 535 50.
  • _____, 1960, Production of Commodities by Means of Commodities: Prelude to a Critique of Economic Theory. Cambridge University Press. Preview.
  • _____ and M.H. Dobb, editors (1951 1973). The Works and Correspondence of David Ricardo. Cambridge University Press, 11 volumes. Online at the Online Library of Liberty.

Further reading

References

External links

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