Beyond Capitalism: Sraffa’s Economic Theory

Immediately after the publication of Sraffa’s book Production of Commodities by means of Commodities (PCC) in I960, a fairly long-lasting and intensive debate took place among the economists which was essentially centred on crucial topics related to capital theory. A nice review of the topics discussed and a summary of the main (provisional) conclusions was provided a decade later by Harcourt (1972), who labelled that debate as the ‘Cambridge controversies’ in capital theory-referring to the two distinct Universities involved (in England and in the USA). More substantially, what was heavily criticized by the English Cambridge was the notion of ‘capital’ characterizing the marginal theory of value and distribution as a ‘quantity’ measurable independently of, or prior to, prices. As a consequence, all the derivative concepts of that notion, such as the ‘marginal productivity of capital’, the demand for and the supply of ‘capital’ functions, the ‘capital/labour ratio’ and some ‘regularities’ (as, for example, the monotonic relationship between the rate of interest and the ‘quantity of capital’) were put under attack, and the use by the marginal theory was found capable of producing only inconsistent results.