ABSTRACT
Among Sraffa’s papers there is a set of Lecture Notes on Advanced Theory of Value, consisting of about 220 handwritten pages, of which roughly two thirds correspond to material covered in the Michaelmas Terms on theories of production and distribution, the remaining third – covered in Lent Terms – dealing with the theory of demand and forms of competition. In his Lecture Notes Sraffa drew on his previously published articles in the Annali di Economia (Sraffa 1925a) and the Economic Journal (Sraffa 1926a), leaving indications of the pages of the relevant passages. In the Lecture Notes the focus on the theory of value historically considered is meant to show how the notion of cost of production was transformed from the classical school to the marginal school, leading – as the result mainly of Marshall’s work – to unification with utility and the statement of a symmetry between cost and utility. For such a unification to be possible – Sraffa argues – the notion of cost of production had to undergo a series of changes which made it unrecognisable in terms of the meaning given to it by the classics, but comparable with utility. ‘It is only when cost is conceived as a quantity of utility’ – Sraffa wrote – ‘that is to say of negative utility, that it can be brought together with marginal utility in a single theory of value’ (SP D 2/4 3(18)). Comparison between the notion of cost in Petty and in the Physiocrats, on the one hand, and in Marshall, on the other, shows that, while for the former authors cost is mainly food for the worker, for the latter it is the sum of ‘efforts and sacrifices’, in abstinence or waiting and in labour required. These two notions of cost reflect different conceptions of what economics is about (classical economists were mainly concerned with measures, marginalist authors were mainly concerned with motives) and gave rise to two theories of distribution. Thus, Sraffa wrote:
For Marshall, wages, interest and profits, are simply shares in the product; they are co-ordinate quantities, that can be regarded as acting upon the value of the product in the same way. Both, are the inducement required to call forth certain sacrifices, which are equally necessary for production, and they are also the reward of those sacrifices. . . . It is not necessary for the actual goods which compose real wages and profits to be in existence at the beginning of the process of production – the hope, or the promise of these goods is equally effective as an inducement. They operate on production only by being expected, but that comes into existence only when production is finished, as shares in the product. Petty and all the classics, on the contrary, take the opposite view. They don’t regard at all wages as an inducement; they regard them as a necessary means of enabling the worker to perform his work.
