Sraffa, the general rate of profit, and the theory of the firm

A volume on alternative theories of competition affords us the opportunity to consider Sraffa’s conception (or lack thereof) of the theory of competition and the theory of the firm. It is well known that the theoretical critique ¹ of the Marshallian partial equilibrium (particular equilibrium) analysis begins with Sraffa’s seminal contributions from 1925 to 1930, specifically the Italian 1925 Annali de economia article, its English summary in 1926, and Sraffa’s contribution to the Symposium on the Representative Firm in 1930, the latter two of which were published in the Economic Journal. ² It is also well known that, although Sraffa’s critique of Marshall spawned Joan Robinson’s (1933) The Economics of Imperfect Competition, ³ Sraffa’s own direction was a complete rejection of anything marginalist and a movement toward the rehabilitation of economic theory along classical lines. Thus, when exploring Sraffa’s position on competition and the firm, one must keep in mind that two fundamental methodological elements exist with respect to his entire life-long research program: a critical element as well as a constructive one.