Piero Sraffa
Encyclopedia
Piero Sraffa was an influential Italian
Italy
Italy , officially the Italian Republic languages]] under the European Charter for Regional or Minority Languages. In each of these, Italy's official name is as follows:;;;;;;;;), is a unitary parliamentary republic in South-Central Europe. To the north it borders France, Switzerland, Austria and...

 economist
Economist
An economist is a professional in the social science discipline 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 Economics
Economics
Economics is the social science that analyzes 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 Turin
Turin
Turin is a city and major business and cultural centre in northern Italy, capital of the Piedmont region, located mainly on the left bank of the Po River and surrounded by the Alpine arch. The population of the city proper is 909,193 while the population of the urban area is estimated by Eurostat...

, Italy
Italy
Italy , officially the Italian Republic languages]] under the European Charter for Regional or Minority Languages. In each of these, Italy's official name is as follows:;;;;;;;;), is a unitary parliamentary republic in South-Central Europe. To the north it borders France, Switzerland, Austria and...

, to a wealthy Italian Jewish
History of the Jews in Italy
The history of the Jews in Italy goes back over two thousand years. Jews have been present in Italy from the Roman period until the present.-Antiquity:-Pre-Christian Rome:...

 family, to Angelo and Irma Sraffa. His father was a Professor in commercial law
Commercial law
Commercial law is the body of law that governs business and commercial transactions...

. Sraffa studied in his town and graduated at the local university
University
A university is an institution of higher education and research, which grants academic degrees in a variety of subjects. A university is an organisation that provides both undergraduate education and postgraduate education...

 with a work on inflation
Inflation
In 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 general price level rises, each unit of currency buys fewer goods and services. Consequently, inflation also reflects an erosion in the purchasing power of money – a...

 in Italy during and after World War I
World War I
World War I , which was predominantly called the World War or the Great War from its occurrence until 1939, and the First World War or World War I thereafter, was a major war centred in Europe that began on 28 July 1914 and lasted until 11 November 1918...

. Notably, his tutor was Luigi Einaudi
Luigi Einaudi
Luigi Einaudi , Cavaliere di Gran Croce decorato di Gran Cordone OMRI was an Italian politician and economist. He served as the second 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
London is the capital city of :England and the :United Kingdom, the largest metropolitan area in the United Kingdom, and the largest urban zone in the European Union by most measures. Located on the River Thames, London has been a major settlement for two millennia, its history going back to its...

 at the London School of Economics
London School of Economics
The London School of Economics and Political Science is a public research university specialised in the social sciences located in London, United Kingdom, and a constituent college of the federal University of London...

. In 1922 he was appointed as Director of the provincial labour department in Milan
Milan
Milan is the second-largest city in Italy and the capital city of the region of Lombardy and of the province of Milan. The city proper has a population of about 1.3 million, while its urban area, roughly coinciding with its administrative province and the bordering Province of Monza and Brianza ,...

, then as Professor in Political economy
Political economy
Political economy originally was the term for studying production, buying, and selling, and their relations with law, custom, and government, as well as with the distribution of national income and wealth, including through the budget process. Political economy originated in moral philosophy...

 first in Perugia
Perugia
Perugia is the capital city of the region of Umbria in central Italy, near the River Tiber, and the capital of the province of Perugia. The city is located about north of Rome. It covers a high hilltop and part of the valleys around the area....

, and later in Cagliari
Cagliari
Cagliari is the capital of the island of Sardinia, a region of Italy. Cagliari's Sardinian name Casteddu literally means castle. It has about 156,000 inhabitants, or about 480,000 including the outlying townships : Elmas, Assemini, Capoterra, Selargius, Sestu, Monserrato, Quartucciu, Quartu...

, Sardinia
Sardinia
Sardinia is the second-largest island in the Mediterranean Sea . It is an autonomous region of Italy, and the nearest land masses are the French island of Corsica, the Italian Peninsula, Sicily, Tunisia and the Spanish Balearic Islands.The name Sardinia is from the pre-Roman noun *sard[],...

. In Turin he had met Antonio Gramsci
Antonio Gramsci
Antonio Gramsci was an Italian writer, politician, political philosopher, and linguist. He was a founding member and onetime leader of the Communist Party of Italy and was imprisoned by Benito Mussolini's Fascist regime...

 (the most important leader of Italian Communist Party
Italian Communist Party
The 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 . Amadeo Bordiga and Antonio Gramsci led the split. Outlawed during the Fascist regime, the party played...

). They became close friends, partly due to their shared ideological views. He also was already in contact with Filippo Turati
Filippo Turati
Filippo 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 Party
Italian Socialist Party
The Italian Socialist Party was a socialist and later social-democratic political party in Italy founded in Genoa in 1892.Once the dominant leftist party in Italy, it was eclipsed in status by the Italian Communist Party following World War II...

, whom he allegedly met and frequently visited in Rapallo
Rapallo
Rapallo 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 Marshall
Alfred Marshall
Alfred Marshall was an Englishman and one of the most influential economists of his time. His book, Principles of Economics , was the dominant economic textbook in England for many years...

's theory of the firm
Theory of the firm
The theory of the firm consists of a number of economic theories that describe the nature of the firm, company, or corporation, including its existence, behavior, structure, and relationship to the market.-Overview:...

. 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
Theory of value (economics)
"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 friendship with Antonio Gramsci
Antonio Gramsci
Antonio Gramsci was an Italian writer, politician, political philosopher, and linguist. He was a founding member and onetime leader of the Communist Party of Italy and was imprisoned by Benito Mussolini's Fascist regime...

 (a risky and compromising endeavor in the context of the Italian fascist regime
Italian Fascism
Italian Fascism also known as Fascism with a capital "F" refers to the original fascist ideology in Italy. This ideology is associated with the National Fascist Party which under Benito Mussolini ruled the Kingdom of Italy from 1922 until 1943, the Republican Fascist Party which ruled the Italian...

, considering Gramsci had previously been imprisoned; Sraffa had brought him the material, literally pens and paper, with which Gramsci would write his Prison Notebooks
Antonio Gramsci
Antonio Gramsci was an Italian writer, politician, political philosopher, and linguist. He was a founding member and onetime leader of the Communist Party of Italy and was imprisoned by Benito Mussolini's Fascist regime...

), brought John Maynard Keynes
John Maynard Keynes
John Maynard Keynes, Baron Keynes of Tilton, CB FBA , was a British economist whose ideas have profoundly affected the theory and practice of modern macroeconomics, as well as the economic policies of governments...

 to prudently invite Sraffa to the University of Cambridge
University of Cambridge
The University of Cambridge is a public research university located in Cambridge, United Kingdom. It is the second-oldest university in both the United Kingdom and the English-speaking world , and the seventh-oldest globally...

, 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
Cafeteria group
The "cafeteria group" was an informal club at the University of Cambridge consisting of John Maynard Keynes, Frank P. Ramsey, Piero Sraffa and Ludwig Wittgenstein...

", together with Frank P. Ramsey
Frank P. Ramsey
Frank 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...

 and Ludwig Wittgenstein
Ludwig Wittgenstein
Ludwig Josef Johann Wittgenstein was an Austrian philosopher who worked primarily in logic, the philosophy of mathematics, the philosophy of mind, and the philosophy of language. He was professor in philosophy at the University of Cambridge from 1939 until 1947...

, a sort of informal club that discussed Keynes's theory of probability
A Treatise on Probability
A Treatise on Probability was published by John Maynard Keynes while at Cambridge University in 1921. The Treatise attacked the classical theory of probability and proposed a "logical-relationist" theory instead...

 and Friedrich Hayek
Friedrich Hayek
Friedrich August Hayek CH , born in Austria-Hungary as Friedrich August von Hayek, was an economist and philosopher best known for his defense of classical liberalism and free-market capitalism against socialist and collectivist thought...

's theory on business cycles. In 1939, Sraffa was elected to a Fellowship at Trinity College
Trinity College, Cambridge
Trinity College is a constituent college of the University of Cambridge. Trinity has more members than any other college in Cambridge or Oxford, with around 700 undergraduates, 430 graduates, and over 170 Fellows...

.

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
Labor theory of value
The labor theories of value are heterodox economic theories of value which argue that the value of a commodity is related to the labor needed to produce or obtain that commodity. The concept is most often associated with Marxian economics...

, and hence for the foundations of Marx's critical analysis of capitalist production.

Sraffian economics

Sraffa's Production of Commodities by Means of Commodities was an attempt to perfect Classical Economics' theory of value
Theory of value (economics)
"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 Ricardo
David Ricardo
David Ricardo was an English political economist, often credited with systematising economics, and was one of the most influential of the classical economists, along with Thomas Malthus, Adam Smith, and John Stuart Mill. He was also a member of Parliament, businessman, financier and speculator,...

 and others. He aimed to demonstrate flaws in the mainstream neoclassical
Neoclassical economics
Neoclassical 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 mediated through a hypothesized maximization of utility by income-constrained individuals and of profits...

 theory of value
Theory of value
Theory of value is an ambiguous term, and may mean:*Theory of value , where value is meant as economic worth of goods and services.*Value theory, where value is meant in the philosophical sense....

 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
Post-Keynesian economics
Post 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 Michał Kalecki, 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 equilibrium
General equilibrium
General equilibrium theory is a branch of theoretical economics. It seeks to explain the behavior of supply, demand and prices in a whole economy with several or many interacting markets, by seeking to prove that a set of prices exists that will result in an overall equilibrium, hence general...

 models, or unable to determine a long-period position, just like the Walrasian approach.

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."

Personal connections

Sraffa is known also for his close friendship with Italian Marxist thinker Antonio Gramsci
Antonio Gramsci
Antonio Gramsci was an Italian writer, politician, political philosopher, and linguist. He was a founding member and onetime leader of the Communist Party of Italy and was imprisoned by Benito Mussolini's Fascist regime...

 and for being instrumental in securing Gramsci's Prison Notebooks from the Fascist authorities after the latter's death in 1937. Norman Malcolm
Norman Malcolm
Norman 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 Wittgenstein
Ludwig Wittgenstein
Ludwig Josef Johann Wittgenstein was an Austrian philosopher who worked primarily in logic, the philosophy of mathematics, the philosophy of mind, and the philosophy of language. He was professor in philosophy at the University of Cambridge from 1939 until 1947...

 with the conceptual break that founded the Philosophical Investigations
Philosophical Investigations
Philosophical Investigations is, along with the Tractatus Logico-Philosophicus, one of the most influential works by the 20th-century philosopher Ludwig Wittgenstein...

, 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
Logical form
In logic, the logical form of a sentence or set of sentences is the form obtained by abstracting from the subject matter of its content terms or by regarding the content terms as mere placeholders or blanks on a 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
Philosophical Investigations
Philosophical Investigations is, along with the Tractatus Logico-Philosophicus, one of the most influential works by the 20th-century philosopher Ludwig Wittgenstein...

, 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.
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
Nicholas Kaldor
Nicholas Kaldor, Baron Kaldor was one of the foremost Cambridge economists in the post-war period...

 pages 66–67).

In 1972, he was awarded an honorary doctorate by Paris
Paris
Paris is the capital and largest city in France, situated on the river Seine, in northern France, at the heart of the Île-de-France region...

's university (Sorbonne
University of Paris
The University of Paris was a university located in Paris, France and one of the earliest to be established in Europe. It was founded in the mid 12th century, and officially recognized as a university probably between 1160 and 1250...

), and in 1976 he received another one from Madrid
Madrid
Madrid is the capital and largest city of Spain. The population of the city is roughly 3.3 million and the entire population of the Madrid metropolitan area is calculated to be 6.271 million. It is the third largest city in the European Union, after London and Berlin, and its metropolitan...

's Complutense
Complutense University of Madrid
The 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.

Further reading

  • Steve Keen
    Steve Keen
    Steve Keen is a Professor in economics and finance at the University of Western Sydney. He classes himself as a post-Keynesian, criticizing both modern neoclassical economics and Marxian economics as inconsistent, unscientific and empirically unsupported...

    Debunking Economics: The Naked Emperor of the Social Sciences (2001, Pluto Press Australia) ISBN 1-86403-070-4

External links

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