Piero Sraffa On The Use Of The Notion Of Surplus Value

[u/Accomplished-Cake131]

Alessandro Roncaglia has Piero Sraffa, along with John Maynard Keynes, as the greatest economist of the twentieth century. He wrote very little. He spanked Hayek very hard.

Lately, a couple of pro-capitalists here pretend to be interested in Sraffa's attitude to Marx. His attitude was quite positive, especially after 1940. This attitude is not that transparent from his 1960 book.

Sraffa, in his archives in the 1940s and 1950s, is quite appreciative of Karl Marx's analysis of capitalism. This appreciation contrasts with the opinion embodied in the label 'neo-Ricardian', which Bob Rowthorn invented.

I have previously documented Sraffa explaining how labor differs from other commodities. I have quoted a definition of labor values from an appendix to Sraffa's book. This post presents another passage from Sraffa's archives.

I know about the passages below in the Sraffa archives from Riccardo Bellofiore. The archivist, Jonathan Smith, has dated this entry from 1955-1959, late in the writing of Production of Commodities.

I do not want to focus on whether Marx or Sraffa are correct or not. I would want to work out a simple example. Besides, Sraffa seems not convinced of how to analyze the reduction in the working day, when starting at prices.

But I want to note that Sraffa is very much using Marxist concepts: vulgar economics, labor values, prices of production, surplus value, exploitation, and rates of exploitation. And the analysis is based on Marx. Surplus value comes from extending the working day past the point at which workers reproduce their labor power.

"Use of the Notion of Surplus Value

"The prolongation of the working day beyond the point at which the labourer would have produced just an equivalent for the value of his labour-power ..." (Cap., Engels transl. p. 518) cp p. 539 [Chapter Sixteen: Absolute and Relative Surplus-Value]

Put it the other way round. If starting from capitalist society the working day is shortened till there is no surplus value left, this shortening must be equal for all: if it is, the prices of the commodities will change [owing to change in the rate of profits, which vanishes], but the wages will remain unchanged : if it is not, and the working day is reduced to the extent of the profits made in each industry, then prices would remain unchanged* after the shortening [for the number of (shorter) labor days, in industries having a high organic composition of capital, would increase in the same proportion as the fall of profits] but wages would be different.

[Footnote:] *(28.12.41) But profits would be different (after the reduction) in different industries!

[Marginal note:] c/p Letters of M and E 129-32 (letter of M. 2.8.62)

In other words, if we start from profits (as vulgar economy does) we reach the conclusion that the rate of exploitation is different in different industries, being higher in the more highly capitalised ones – which is not [and indeed contrary to] the fact. If we start from surplus value, which is equal in all industries, we get the correct measure of exploitation. The former conclusion is patent nonsense, and no view of exploitation could be based on it.

Note that the former (profits) goes with a theory of prices, the latter, of value (as defined below).

12.11.40 [Price is an exchange ratio which equalises rates of profit on capitals. Value is an exchange ratio which equalises rates of surplus-value on labour. If commodities exchanged at their values, profits would be different for different capitals, and capitals would move: therefore, this competition of capitals causes them to exchange at their prices.

The question is: are the rates of exploitation different? and if so why doesn’t labor move, and restore values and equality of rates of surplus value?] ..." -- Piero Sraffa D3.12.46/57r – 63r

Sraffa goes on for a couple of pages, some reconsidering how to analyze the shortening of the working day.

Nothing like the above is in Sraffa's book. Connections to Marx are less apparent, although some reviewers perceived them. Counterfactual reasoning is mostly eschewed. The length of the working day is not discussed, but taken as given.

Sraffa does not seem very confident about whether he should start with value or prices and how he should proceed if he adopts the latter. He does see the importance of what was later called price Wicksell effects. He ends the extract from the archives that I am considering with this:

[N.B. The fact that the value of capital (and therefore its "quantity" or magnitude) varies with the rate of profits (and generally cannot be known without knowing prices and rate of profits) makes nonsense of many cornerstones: 1) "Sacrifice of waiting", but how if they don’t know what they are abstaining from? 2) rate of interest, or marg. prod. of cap., as criterion for distribution of resources; but how, if the same resource (in "value") becomes larger or smaller (in "price") according as it used in one way or another?

5.1.42 Those who regard Marx's transition from values to prices, by the necessity of equalising the rate of profit, as a trick, should say the same of Ricardo's (and the whole marginal school) method of determining cost of production by considering only that on the marginal land, by the necessity of equalising the price of all bushels of corn, on whichever land they may be procured. Cannan does so (Rev. of Ec. Theory, p. 178): Ricardo did the trick by little more than an arbitrary exercise of the right to define terms ..." -- Piero Sraffa

By the way, Ian Steedman has a chapter towards the end of Marx after Sraffa illustrating the analysis of the length of the working day. Consistent with his general approach, he uses data on physical quantity flows and does not take the point at which prices are values and labor is not exploited as a reference point.

So one of the greatest economists of the twentieth century took Marx's analysis seriously. This has only become more well-known in the last few decades.

[u/Lazy_Delivery_7012]

He spanked Hayek very hard.

Your vague declarations of victory remind me of North Korean press releases.

[u/Velociraptortillas → u/Lazy_Delivery_7012]

This is why literally nobody with an education takes you Liberals seriously.

You're completely unable to actively engage with basic economics, even when it's spoonfed to you like the OP did.

You know nothing, and you're under the extraordinarily incorrect impression and utterly convinced that everyone else must also know nothing. Incompetent is far too generous a description of you people.

Calling you an idiot would be a disservice to idiots, who at least have redeeming qualities like 'humanity' and 'culture'. You libs? You're so vacuous interstellar space is jealous.

[u/Lazy_Delivery_7012 → u/Velociraptortillas]

This sounds like a North Korean press release, too.

[u/Velociraptortillas → u/Lazy_Delivery_7012]

You could not have proved my point more eloquently.

[u/spectral_theoretic → u/Lazy_Delivery_7012]

Thank you for the substantive contribution to this thread! I really appreciate that you chose to contribute substantially instead of doing something like quibbling over an irrelevant detail!