ABSTRACT
1. If the whole of the national income is absorbed by wage payments, ‘the relative values of commodities [in the economic systems of Mr Sraffa’s Production of Commodities by Means of Commodities] are in proportion to their labour cost, that is to say the quantity of labour which directly and indirectly has gone to produce them’ (Sraffa, 1960, p. 12). To establish this proposition Sraffa refers the reader to Appendix A, ‘On Sub-Systems’. We propose in this note to show, both diagrammatically and algebraically, how these sub-systems may be derived from the main economic system, in order to describe their general properties and, in particular, to illustrate the proposition quoted above. We proceed by defining the simple economic system of Sraffa’s book and the sub-systems implied in it. We then derive the latter from the former. Finally, we establish the above proposition and mention some possible implications of the analysis.
