Palgrave Studies in the History of Economic Thought
Total Page:16
File Type:pdf, Size:1020Kb
Palgrave Studies in the History of Economic Thought Series Editors Avi J. Cohen Department of Economics York University & University of Toronto Toronto, ON, Canada G. C. Harcourt School of Economics University of New South Wales Sydney, NSW, Australia Peter Kriesler School of Economics University of New South Wales Sydney, NSW, Australia Jan Toporowski Economics Department School of Oriental & African Studies University of London London, UK Palgrave Studies in the History of Economic Thought publishes contribu- tions by leading scholars, illuminating key events, theories and individuals that have had a lasting impact on the development of modern-day eco- nomics. The topics covered include the development of economies, insti- tutions and theories. More information about this series at http://www.palgrave.com/gp/series/14585 Ajit Sinha Editor A Refection on Sraffa’s Revolution in Economic Theory Editor Ajit Sinha Thapar School of Liberal Arts and Sciences Patiala, India ISSN 2662-6578 ISSN 2662-6586 (electronic) Palgrave Studies in the History of Economic Thought ISBN 978-3-030-47205-4 ISBN 978-3-030-47206-1 (eBook) https://doi.org/10.1007/978-3-030-47206-1 © The Editor(s) (if applicable) and The Author(s), under exclusive licence to Springer Nature Switzerland AG 2021 This work is subject to copyright. All rights are solely and exclusively licensed by the Publisher, whether the whole or part of the material is concerned, specifcally the rights of translation, reprinting, reuse of illustrations, recitation, broadcasting, reproduction on microflms or in any other physical way, and transmission or information storage and retrieval, electronic adaptation, computer software, or by similar or dissimilar methodology now known or hereafter developed. The use of general descriptive names, registered names, trademarks, service marks, etc. in this publication does not imply, even in the absence of a specifc statement, that such names are exempt from the relevant protective laws and regulations and therefore free for general use. The publisher, the authors and the editors are safe to assume that the advice and information in this book are believed to be true and accurate at the date of publication. Neither the publisher nor the authors or the editors give a warranty, expressed or implied, with respect to the material contained herein or for any errors or omissions that may have been made. The publisher remains neutral with regard to jurisdictional claims in published maps and institutional affliations. Cover illustration: Evgenii Emelianov / Alamy Stock Photo This Palgrave Macmillan imprint is published by the registered company Springer Nature Switzerland AG. The registered company address is: Gewerbestrasse 11, 6330 Cham, Switzerland Praise for A Refection on Sraffa’s Revolution in Economic Theory “Piero Sraffa’s elusive classic Production of Commodities by Means of Commodities was published sixty years ago with the aim of reconstructing the foundations of Economics on solid theoretical grounds purging the Classical and Neoclassical Economics of logical and philosophical weaknesses. It set off a debate which has still not been settled. In the meantime, the global economy has been through the crises of stagfation, globalisation, the Great Recession and lately Covid-19. Nostrums and solutions have come—Keynesianism, Monetarism, New Classical Economics—and gone. The Soviet system of economic planning collapsed and has been forgotten. Practical remedies to real life problems having failed, it may be the time for going back to fundamentals. Here is a splendidly rich collection of contributions, with criticisms and replies that Ajit Sinha has brought together which will merit serious study by senior economists as much as the next generation of young stu- dents. Here the Sraffa system is analysed in its full complexity and dissected by scholars who were there when Sraffa published the book as well as subsequent three generations of students. Here are Geoffrey Harcourt, Bertram Schefold, Roberto Scazzieri, Christina Marcuzzo, Anna Carabelli, Annalisa Rosselli, John King, Guglielmo Chiodi, names which have been known to us as experts in theory, methodology and philosophy of economics. Sraffa was not just an economic theorist. The book casts light on his infuence on Wittgenstein (Sinha), his discussions with Keynes (Carabelli) and his friendship with Gramsci (Naldi) and Kalecki (King). The availability of the Sraffa archives has enriched our understanding of his thinking and the debates he carried on with himself and his correspondents. This book captures the spirit of these archives which previous work on Sraffa has missed out on. The debate here is creative as there is also a contribution relating Sraffa’s theory to the problem of non-renewable natural capital (Verger). Ajit Sinha has prepared a feast for students and scholars of economics, philoso- phy and politics to enjoy.” —Lord Meghnad Desai, Professor Emeritus, London School of Economics PREFACE Sraffa’s contribution to economics is mainly thought of in terms of his specifc contributions to particular theoretical issues in Economics—his early contributions (1925, 26)1 were acknowledged as a devastating cri- tique of Marshall’s theoretical framework of partial equilibrium in a per- fectly competitive market under the condition of ceteris paribus; the latter paper also proved to be seminal in the development of the theories of ‘imperfectly competitive’ markets; he is also noted for his polemic with Hayek on Hayek’s Production and Prices (1931)2 in which he developed an ingenious idea of ‘a commodity’s own rate of interest’ (Sraffa 1932),3 which Keynes utilised in his General Theory (1936)4 and is also used in the inter-temporal general equilibrium analysis; and most importantly, he is credited to have presented a defnitive critique of the orthodox marginal productivity theory of distribution of income in his magnum opus, Production of Commodities by Means of Commodities (1960).5 Along with 1 ‘Sulle relazioni tra costo e quantita prodotta. Annali di Economia, Vol. 2: pp. 277–328, 1925 and ‘The laws of returns under competitive conditions’, The Economic Journal, vol. 36: pp. 535–50, 1926. 2 Prices and Production, London: George Routledge & Sons ltd., 1931. 3 ‘Dr. Hayek on Money and Capital’, Economic Journal, vol. 42 (165), pp. 42–53. 4 The General Theory of Employment, Interest and Money, London: A Harvest/ HBJ Books. In a footnote to Chapter 17 of the General Theory, Keynes wrote, ‘This relationship was frst pointed out by Mr. Sraffa, Economic Journal, March 1932, p.50’. Sraffa, however, found Keynes’s use of this concept contradictory and inconsistent as is evident from the marginal comments in his personal copy of the General Theory. 5 Production of Commodities by Means of Commodities: Prelude to a Critique of Economic Theory, Cambridge: Cambridge University Press. vii viii PREFACE these important specifc contributions to economic theory, he is also cred- ited to have given a new interpretation of ‘Classical Economics’ by provid- ing a highly original interpretation of Ricardo’s ‘labour theory of value’ in his universally acknowledged magisterial editing of Works and Correspondence of David Ricardo6 and, in some sense, connecting it to the theory developed in his Production of Commodities by Means of Commodities. Even though the list is highly impressive and would be good enough to qualify Sraffa to be inducted in the ‘Economics Hall of Fame’, this sort of listing of specifc contributions does not do justice to the overall nature and signifcance of his contribution to Economics. My own study of Sraffa’s archives convinced me of this conclusion, which I tried to com- municate to the larger intellectual audience in my book, A Revolution in Economic Theory: The Economics of Piero Sraffa (Sinha 2016).7 It seems to me that Sraffa wanted to cut the foundation of Economics from its old moorings either in an essentialist problematic in which the theory searches for the ultimate cause of a phenomenon or the mechanical causation in which the theory searches for an equilibrium of forces as the solution of the problem. Sraffa seems to want to bring economic theory to the mod- ern era of the twentieth century quantum mechanics, which eschews determinacy and classical causation in favour of indeterminacy and struc- tural relations. Moreover, he wants to build economics as a science based on observable data and therefore does not want to allow human psychol- ogy any role in economic theory as human psychology is unobservable. This is a manifesto for a revolution in economic theory. While Sraffa’s archive at the Wren Library, Trinity College, University of Cambridge, was offcially opened up to public in the early 1990s, it was not available in print or electronic format and the use of its contents was kept on a tight leash for more than a decade by the literary executor of the time. For many years there were only a handful of Sraffa-scholars who had an opportunity to study it partially or completely and were allowed to quote from it. Lately, however, the situation has eased and increasingly more and more scholars interested in Sraffa’s work are coming up with their interesting fndings and alternative interpretations of the method- ological and philosophical underpinnings of Sraffa’s economics. In a way, 6 ‘Introduction’, in Works and Correspondence of David Ricardo, vol. I, Cambridge: Cambridge University Press, 1951. 7 A Revolution in Economic Theory: The Economics of Piero Sraffa, Cham: Palgrave Macmillan. PREFACE ix Sraffa’s economics is currently going through a churning. In this milieu, Rachel Sangster of Palgrave Macmillan approached me in early 2019 to consider editing a volume that would refect on Sraffa’s economics in a fresh way by taking account of the insights from his archives—the present volume is the outcome of that—it, indeed, stands as an example of the current renaissance of Sraffa’s economics that is well underway.