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

Early life

He was born in Turin, Italy, to a wealthy Jewish family, to Angelo and Irma Sraffa. His father was a Professor in commercial law. He 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—Sraffa was at this time a radical Marxist. 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 work was completed in an article he published the following year.

Major works

In 1927, his as yet undiscussed theory of value, but also his risky political ideas and his compromising friendship with Gramsci (who had already been imprisoned by the fascists —notably, Sraffa had brought him the materials, literally pens and paper, with which Gramsci would write his Prison Notebooks), brought John Maynard Keynes to prudentially invite Sraffa to the University of Cambridge, where he was initially assigned a lectureship. After a few years, Keynes created ex novo for him 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.

Ricardo's works and correspondence

In the following years, also on Keynes's initiative, the Royal Economic Society handed over the task of editing a new collected edition of David Ricardo's works over to him. Sraffa's painstaking and meticulous collecting and editing of Ricardo's works, begun in 1931, turned out to be a 20-year task. Although already in the printers in 1943, the edition was delayed after the last-minute discovery of a trunk full of Ricardo's papers in Ireland. Publication finally began (after Maurice Dobb became co–editor) in 1953. It was a formidable edition. As George Stigler was to put it later in his review, "Ricardo was a fortunate man... And now, 130 years after his death, he is as fortunate as ever: he has been befriended by Sraffa." (Stigler, 1953). Sraffa's introduction to the works was perhaps one of the most remarkable interpretations of the tenets of Classical and Neoclassical theory in the history of economic thought.

John Eatwell wrote of Sraffa's work on Ricardo

His 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. (Eatwell 1984)

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. Nonetheless, Sraffa's work, particularly his interpretation of Ricardo and his Production of Commodities by Means of Commodities, is seen as the starting point of the Neo-Ricardian school in the 1960s.

Personal connections

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:

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?'

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.

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.

Footnotes

Bibliography

• Sraffa, Piero 1926, "The Laws of Returns under Competitive Conditions", Economic Journal, 36, pp. 535-50. HTML copy.
• Sraffa, Piero 1960, Production of Commodities by Means of Commodities: Prelude to a Critique of Economic Theory. Cambridge University Press.

References

• John Eatwell and Carlo Panico (1987). "Sraffa, Piero." The New Palgrave: A Dictionary of Economics, v. 3, pp. 445-52.
• John Eatwell (1984). "Piero Sraffa: Seminal Economic Theorist." Science and Society 48(2): 211-216.
• Paul A. Samuelson (1987). "Sraffian economics." The New Palgrave: A Dictionary of Economics, v. 3, pp. 452-60.
• _____ (2008). "Sraffian economics." The New Palgrave Dictionary of Economics 2nd Edition. Abstract.
• Piero Sraffa and M.H. Dobb, editors (1951-1973). The Works and Correspondence of David Ricardo. Cambridge University Press, 11 volumes.

External links

• Piero Sraffa Archives homepage at Trinity College, Cambridge. Contains an online catalogue of Sraffa's personal and professional papers.