ABSTRACT
The analysis of the classical economists from William Petty to David Ricardo of the problems of production, distribution and value revolved around the concept of the annual social surplus. In the first step, this surplus was typically seen to be exclusively distributed to the propertied classes in the form of rents or profits and used for the purposes of consumption and capital accumulation. In the second step, some authors then discussedworkers’participation in the surplus. The surplus refers to those quantities of the different commodities that were left over after the necessarymeans of production used up and themeans of subsistence in the support of workers have been deducted from the gross outputs produced during a year. In this conceptualisation, the necessary real wages of labour were considered no less as indispensable inputs and thus agents of production than raw materials, tools or machines. What became known as the ‘surplus interpretation’ of the classical economists focuses attention on the mature classical economists’ approach to how the surplus is distributed and which system of exchange values of the different commodities can be expected to emerge as the result of the gravitation of ‘market’ or ‘actual’ prices to their ‘natural’ or ‘ordinary’ levels, or ‘prices of production’. In conditions of free competition, that is, the absence of significant barriers to entry and exit from all markets, prices can be taken to oscillate around levels characterized by a uniform rate of profits on the value of the capital advanced at the beginning of the uniform production period and a uniform rate of rent for each of the different qualities of land. The determination of the general rate of profits, the rents of land and the
corresponding system of relative prices, given the system of production in
use, constitutes the analytical centrepiece of classical political economy. It was designed to lay the foundation of all other economic analysis, including the investigation of capital accumulation and technical progress; of development and growth; of social transformation and structural change; and of taxation and public debt. Piero Sraffa deserves the credit for having rediscovered and clarified the dis-
tinct analytical structure of the classical approach to the theory of production, distribution and value. He, at the same time showed that it cannot be interpreted as an early and somewhat crude version of demand and supply analysis which became prominent with the so-called ‘marginalist revolution’. Last but not least, Sraffa reformulated the classical approach by shedding theweaknesses of its earlier versions and elaborating on its strengths. Equipped with Sraffa’s reconstructive and interpretive work, as it is available in his published and hitherto unpublished work, we may reconsider the classical authors’ contributions. This will lead us to a deeper understanding of what they were after, and why; what they accomplished, and how; why they failed to elaborate a fully satisfactory theory revolving around the concept of social surplus, and for which reason; and finally what was needed in order to accomplish the task. In this paper, we focus on Sraffa’s interpretation of the classical authors: we shall draw both on his published works (Sraffa, 1951, 1960) and on his unpublished manuscripts.1 In a note entitled ‘Principio’ of November 1927 Sraffa specified the task he had taken on as follows:
I shall begin by giving a short “estratto” of what I believe is the essence of the classical theories of value, i.e. of those which includeW. Petty, Cantillon, Physiocrats, A. Smith, Ricardo and Marx. This is not the theory of any one of them, but an extract of what I think is common to them. I state it of course, not in their own words, but in modern terminology, and it will be useful when we proceed to examine their theories to understand their portata {bearing strength} from the point of view of our present inquiry. It will be a sort of “frame”, a machine, into which to fit their own statements in a homogeneous pattern, so as to be able to find what is common in them and what is the difference with the later theories.
