On a Turning Point in Sraffa’s Theoretical and Interpretative Position in the Late 1920s

Sraffa’s notes titled ‘Summer 1927’ (D3/12/3, Trinity Catalogue) presumably written while preparing for the lectures on the theory of value he intended to hold in Cambridge that Autumn, when examined jointly with the lectures in fact delivered in 1928–31 and other manuscripts from the period make it possible to identify an important change occurring in those months in his theoretical position and in his interpretation of Ricardo and the Classical economists. From his previous acceptance of Marshall’s apparatus of demand and supply once purged of the subjective elements of utility and ‘efforts and sacrifices’, Sraffa moved on to a theory of relative prices and distribution based on what he then called ‘physical real costs’ (in opposition to Marshall’s subjective ‘real costs’) and to the consequent conception of a ‘surplus product’ providing for profits and rent. It is the theory which Sraffa recognized then to be that of Smith and Ricardo and the ‘old classical economists’, beyond the Marshallian interpretation of those authors he had previously shared, in terms of constant returns and, therefore, of the demand and supply apparatus. That is the interpretation that will emerge twenty years later in the Introduction to Ricardo’s Principles (1951), just as that is essentially the theory we shall find in Production of Commodities by Means of Commodities thirty years later.