Interpreting Production of Commodities by Means of Commodities

Nearly 50 years have passed since Production of Commodities by Means of Commodities was first published, but interpretation of the text still arouses lively debate. Any particularly concise dissertation — and Sraffa’s certainly is — may be open to various interpretations, but the extraordinary precision of Sraffa’s prose should leave little room for misunderstanding. Nevertheless, some misunderstanding did arise from an additional difficulty, namely the radical difference between his type of analysis and the lines of argument customarily followed by the vast majority of contemporary economists. Sraffa himself refers to the problem in the opening lines of his book: Anyone accustomed to think in terms of the equilibrium of demand and supply may be inclined, on reading these pages, to suppose that the argument rests on a tacit assumption of constant returns in all industries. (Sraffa 1960: v) Two related themes emerge from this short passage (and from the pages that follow it). In the first place, Sraffa suggests that at least two categories of economists exist: those who are ‘accustomed to think in terms of the equilibrium of demand and supply’, and those who are not. Secondly, Sraffa points out that a crucial difference between these two groups of economists — or between these two approaches, para-digms or theoretical frameworks — lies in the role that the quantities produced play in the analysis of prices and their relationship to income distribution.