66 Pages

Sraffa and the interpretation of Ricardo: the Marxian dimension

Piero Sraffa’s Production of commodities by means of commodities (PCMC) (1960) concerns the problem of a given physical surplus to be distributed to assure a uniform profit rate. Output levels (‘gross output quantities’) are included among the technological data determined outside the system along with the wage rate. (Alternatively, the profit rate may be taken as an independent variable and the wage as one of the unknowns (1960, p. 33).) Assume a physical surplus in the sense of an excess of one or more commodities over the amount(s) used up as input, then the (general) profit rate (r) will be determined ‘through the same mech ­ an ism and at the same time as the prices of commodities’ (p. 6), for to distribute the (physical) surplus so as to assure a uniform profit rate requires knowledge of prices in order to calculate the value of the means of production (which are heterogeneous products), while conversely to calculate the prices implies know ­ ledge of r. But these propositions regarding price and profit-rate determin ation apply specifically to basic commodities, or commodities entering (directly or indirectly) as input into the production of all commodities including itself. The simultaneous emer gence of profit rate and prices is not the case in the so-called standard system, where distribution has absolute priority. A brief summary of this position is in order.