ABSTRACT
In a much-quoted letter to Keynes of 1926 (partially reproduced in Roncaglia 1975), Sraffa contemplated three possible lines of development for his inquiry into the theory of value: an elaboration of the hypothesis of constant costs; a turning to general economic equilibrium; or an extension of the theory of monopoly to markets with many competing agents. None of these projects, as we know now, was to be actually carried out in the years that followed. Only the third one left a mark on Sraffa’s published works (Sraffa 1926a): a few pages containing an outline of a theory of imperfect markets that greatly impressed Keynes and the younger Cambridge economists with whom Sraffa was in closest contact-Gerald Shove, Richard Kahn, and Joan Robinson. In the late 1920s, an intense exchange took place between the four of them on various aspects of imperfect competition. But no sooner had the subject gained momentum as a most promising area of research than Sraffa lost all interest in it, and detached himself from the discussions going on in Cambridge and elsewhere from 1930 on. In fact, looking back from the standpoint of Sraffa’s later works, few subjects appear more remote than imperfect competition.
