Piero Sraffa (August 5, 1898 – September 3, 1983) was an influential
ItalianItaly , officially the Italian Republic , is a country located on the Italian Peninsula in Southern Europe and on the two largest islands in the Mediterranean Sea, Sicily and Sardinia. Italy shares its northern, Alpine boundary with France, Switzerland, Austria and Slovenia...
economistAn economist is an expert in the social science of economics. The individual may also study, develop, and apply theories and concepts from economics and write about economic policy...
whose book
Production of Commodities by Means of Commodities is taken as founding the Neo-Ricardian school of
EconomicsEconomics is the social science that studies the production, distribution, and consumption of goods and services. The term economics comes from the Ancient Greek from + , hence "rules of the house"...
.
Early life
He was born in
TurinTurin is a major city as well as a business and cultural centre in northern Italy, capital of the Piedmont region, located mainly on the left bank of the Po River surrounded by the Alpine arch...
,
ItalyItaly , officially the Italian Republic , is a country located on the Italian Peninsula in Southern Europe and on the two largest islands in the Mediterranean Sea, Sicily and Sardinia. Italy shares its northern, Alpine boundary with France, Switzerland, Austria and Slovenia...
, to a wealthy Jewish family, to Angelo and Irma Sraffa. His father was a Professor in
commercial lawCommercial law is the body of law that governs business and commercial transactions. It is often considered to be a branch of civil law and deals with issues of both private law and public law....
. He studied in his town and graduated at the local
universityA university is an institution of higher education and research, which grants academic degrees in a variety of subjects. A university provides both undergraduate education and postgraduate education...
with a work on
inflationIn economics, inflation is a rise in the general level of prices of goods and services in an economy over a period of time.When the price level rises, each unit of currency buys fewer goods and services; consequently, inflation is also an erosion in the purchasing power of money – a loss of real...
in Italy during and after
World War IWorld War I , also known as the First World War, the Great War, and the War to End All Wars, was a global military conflict which involved most of the world's great powers, assembled in two opposing alliances: the Triple Entente and the Triple Alliance...
. Notably, his tutor was
Luigi EinaudiLuigi Einaudi, Cavaliere di Gran Croce decorato di Gran Cordone OMRI was an Italian politician and economist. He served as the President of the Italian Republic between 1948 and 1955.-Early life:...
, one of the most important Italian economists and later a president of the Italian Republic.
From 1921 to 1922 he studied in
London[]London is the capital of England and the United Kingdom. It has been a major settlement for two millennia, and the history of London goes back to its founding by the Romans, when it was named Londinium. London's core, the ancient City of London, the 'square mile', retains its medieval boundaries...
at the
London School of EconomicsThe London School of Economics and Political Science, commonly referred to as the London School of Economics or LSE, is a specialist constituent college of the University of London in London, England....
. In 1922 he was appointed as Director of the provincial labour department in
MilanMilan in Italy, is the capital of the region of Lombardia and of the province of Milan. The city proper has a population of about 1.3 million, while the urban area is the fifth largest in the E.U. with an estimated population of 4.3 million...
, then as Professor in
Political economyPolitical economy originally was the term for studying production, buying and selling, and their relations with law, custom, and government. Political economy originated in moral philosophy...
first in
PerugiaPerugia is the capital city of the region of Umbria in central Italy, near the Tiber River, and the capital of the province of Perugia. The city symbol is the griffin, which can be seen in the form of plaques and statues on buildings around the city.Perugia is a notable artistic center of Italy...
, and later in
CagliariCagliari is the capital of the island of Sardinia, a region of Italy. Cagliari's Sardinian name Casteddu literally means the castle...
,
SardiniaSardinia is the second-largest island in the Mediterranean Sea . The area of Sardinia is . The nearest land masses to the island are the French island of Corsica, the Italian Peninsula, Tunisia, and the Spanish Balearic Islands...
. In Turin he had met
Antonio GramsciAntonio Gramsci was an Italian philosopher, writer, politician and political theorist. A founding member and onetime leader of the Communist Party of Italy, he was imprisoned by Benito Mussolini's Fascist regime...
(the most important leader of
Italian Communist PartyThe Italian Communist Party was a communist political party in Italy.The PCI was founded as Communist Party of Italy on 21 January 1921 in Livorno, by seceding from the Italian Socialist Party...
). They became close friends, partly due to their shared ideological views—Sraffa was at this time a radical
MarxistMarxism is the political philosophy and economic worldview based upon a materialist interpretation of history, a Marxist analysis of capitalism, a theory of social change, and an atheist view of human liberation derived from the work of Karl Marx and Friedrich Engels; three primary aspects of...
. He also was already in contact with
Filippo TuratiFilippo Turati was an Italian sociologist, poet and Socialist politician.-Early life:Born in Canzo, province of Como, he graduated in law at the University of Bologna in 1877, and participated in the Scapigliatura movement with the most important artists of the period in Milan, publishing poetry...
, perhaps the most important leader of
Italian Socialist PartyThe Italian Socialist Party was a democratic socialist and later social-democratic political party in Italy founded in Genoa in 1892....
, whom he allegedly met and frequently visited in
RapalloRapallo is a municipality in the province of Genoa, in Liguria, northern Italy. As of 2007 it counts approximately 34,000 inhabitants, it is part of the Tigullio Gulf and is located in between Portofino and Chiavari....
, where his family had a holiday villa.
In 1925 he wrote about returns to scale and perfect competition, underlining some doubtful points of
Alfred MarshallAlfred Marshall was an English economist and one of the most influential economists of his time, being one of the founders of neoclassical economics...
's
theory of the firmThe theory of the firm consists of a number of economic theories which describe the nature of the firm, company, or corporation, including its existence, its behaviour, and its relationship with the market.-Simplified Summary:...
. This work was completed in an article he published the following year.
Major works
In 1927, his as yet undiscussed
theory of value"Theory of value" is a generic term which encompasses all the theories within economics that attempt to explain the exchange value or price of goods and services...
, but also his - in fascist Italy - 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 KeynesJohn Maynard Keynes, 1st Baron Keynes, CB was a British economist whose ideas have been a central influence on modern macroeconomics, both in theory and practice...
to prudentially invite Sraffa to the
University of CambridgeThe University of Cambridge , located in the City of Cambridge, Cambridgeshire, United Kingdom, is the second oldest university in the English-speaking world and the fourth oldest in Europe...
, 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 groupThe "cafeteria group" was an informal club at the University of Cambridge consisting of John Maynard Keynes, Frank P. Ramsey, Piero Sraffa and Ludwig Wittgenstein. The group discussed Keynes's theory of probability, particularly his 1921 treatise, and Friedrich Hayek's theory of business...
", together with
Frank P. RamseyFrank Plumpton Ramsey was a British mathematician who, in addition to mathematics, made significant and precocious contributions in philosophy and economics before his death at the age of 26.-Life:...
and
Ludwig WittgensteinLudwig Josef Johann Wittgenstein was an Austrian-British philosopher who worked primarily in logic, the philosophy of mathematics, the philosophy of mind, and the philosophy of language....
, a sort of informal club that discussed Keynes's theory of probability and
Friedrich HayekFriedrich August von Hayek CH , was an Austrian and British economist and philosopher known for his defense of classical liberalism and free-market capitalism against socialist and collectivist thought. He is considered by some to be one of the most important economists and political philosophers...
's theory on business cycles.
Ricardo's works and correspondence
In the following years, also on Keynes's initiative, the
Royal Economic SocietyThe Royal Economic Society is incorporated by a Royal Charter dated 2 December 1902. It is one of the oldest economic associations in the world. Currently it has over 3,300 individual members, of whom 60 per cent live outside the United Kingdom...
handed over the task of editing a new collected edition of
David RicardoDavid Ricardo was an English political economist, often credited systematizing economics, and was one of the most influential of the classical economists, along with Thomas Malthus and Adam Smith. He was also a member of Parliament, businessman, financier and speculator, who amassed a considerable...
'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 DobbMaurice Herbert Dobb , was a British economist, and a lecturer 1924-1959 and Reader 1959-1976 at Cambridge University and a Fellow of Trinity College, Cambridge 1948-1976....
became co–editor) in 1953. It was a formidable edition. As
George StiglerGeorge Joseph Stigler was a U.S. economist. He won the Nobel Memorial Prize in Economic Sciences in 1982, and was a key leader of the Chicago School of Economics, along with his close friend Milton Friedman....
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"Theory of value" is a generic term which encompasses all the theories within economics that attempt to explain the exchange value or price of goods and services...
, as originally developed by
David RicardoDavid Ricardo was an English political economist, often credited systematizing economics, and was one of the most influential of the classical economists, along with Thomas Malthus and Adam Smith. He was also a member of Parliament, businessman, financier and speculator, who amassed a considerable...
and others. He aimed to demonstrate flaws in the mainstream
neoclassicalNeoclassical economics is a term variously used for approaches to economics focusing on the determination of prices, outputs, and income distributions in markets through supply and demand, often as mediated through a hypothesized maximization of income-constrained utility by individuals and of...
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 economistsPost-Keynesian economics is a school of economic thought with its origins in The General Theory of John Maynard Keynes, although its subsequent development was influenced to a large degree by Joan Robinson, Nicholas Kaldor and Paul Davidson...
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 equilibriumGeneral equilibrium theory is a branch of theoretical neoclassical economics. It seeks to explain the behavior of supply, demand and prices in a whole economy with several or many markets, by seeking to prove that equilibrium prices for goods exist and that all prices are at equilibrium, hence...
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 MalcolmNorman Malcolm was an American philosopher, born in Selden, Kansas. He studied philosophy with O.K. Bouwsma at the University of Nebraska, then enrolled as a graduate student at Harvard University in 1933....
famously credits Sraffa with providing
Ludwig WittgensteinLudwig Josef Johann Wittgenstein was an Austrian-British philosopher who worked primarily in logic, the philosophy of mathematics, the philosophy of mind, and the philosophy of language....
with the conceptual break that founded the
Philosophical InvestigationsPhilosophical Investigations is, along with the Tractatus Logico-Philosophicus, one of the two most influential works by the 20th-century philosopher Ludwig Wittgenstein. In it, Wittgenstein discusses numerous problems and puzzles in the fields of semantics, logic, philosophy of mathematics, and...
, 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.
Another version of this is that Sraffa bought the bonds in 1943, when they were trading at distressed prices, as he was convinced that Japan would honour its obligations.
In 1972 he was awarded an honorary doctorate by
ParisParis is the capital of France and the country's most populous city. It is situated on the river Seine, in northern France, at the heart of the Île-de-France region...
's university (
SorbonneThe historic University of Paris was founded in the mid 12th century, likely between 1160 and 1170 , In 1970 it was reorganized as 13 autonomous universities...
), and in 1976 he received another one from
MadridMadrid is the capital and largest city of Spain. It is the third-most populous municipality in the European Union after Greater London and Berlin, and its metropolitan area is the third-most populous city by urban area in the European Union after Paris and London.The city is located on the river...
's
ComplutenseThe Complutense University of Madrid is a university in Madrid, and one of the oldest universities in the world. It is located on a sprawling campus that occupies the entirety of the Ciudad Universitaria district of Madrid, with annexes in the district of Somosaguas in the neighboring city of...
university.
External links