ABSTRACT OF PAPER
Title: What is the marginal product of this? Piero Sraffa and the case of unchanging inputs and outputs
Author: Andrews David
Piero Sraffa warned that readers of his 1960 book trained in the marginal economic theory would be predisposed to a misunderstanding: the centrality of changes in the scale of output in the marginal theory would incline such readers to believe that his argument relies on an unstated premise of constant returns to scale. Sraffa, on the contrary, adopted what he called the classical “standpoint” of Adam Smith and David Ricardo, a perspective concerned with the properties of an economic system that have nothing to do with such changes. This allows Sraffa to consider an economy in which the level of output does not ever change. If output does not vary, then the question of returns to scale is irrelevant. Samuelson and Burmeister accept Sraffa’s claim that if the argument is restricted to the case of unchanging output, Sraffa can, strictly speaking, escape the need to assume constant returns, but they insist that to limit the argument in this way renders it applicable to a special and unrealistic case only, a case that is of little interest. Despite the importance Sraffa’s warning attaches to the absence of change in his argument, it has not been important in interpretations of Sraffa’s critique of marginal economics. The capital controversies of the 1960s focused on an internal flaw in the marginal productivity theory, the impossibility of constructing a measure of capital of the type required by that theory, one that is independent of prices and the distribution of income. This, however, is a problem for the marginal theory that exists independently of the classical theory and whether or not there are constant returns in Sraffa’s analysis. Sraffian writers have been hesitant to defend Sraffa’s association of the classical theorists with the case of unchanging quantities of outputs, some construing the classical theory as a general theory with two parts, one with which Sraffa was concerned, in which value and distribution are determined, in which outputs remain unchanged, and another part, concerned with the theory of the level of output as a whole, in which quantities of inputs and outputs change and prices remain constant. Whether this is a sound interpretation of the classical economists or not, it contrasts sharply with Sraffa’s claim that the standpoint of the classical economists was that of unchanging quantities of outputs. Given Sraffa’s vast and authoritative knowledge of the classical writers, this raises two questions. First, can Sraffa’s claim that the standpoint of the classical economists is that of unchanging quantities be defended? And second, why did Sraffa choose to focus on this case, that is, what is it that is interesting or general about it? The purpose of this essay is to answer the first question affirmatively and to suggest an answer to the second.
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