ABSTRACT
Around the mid-1970s and up until 1979, a small group met once a year for a “Sraffa seminar”: each of us read a short paper, and a long discussion followed. That was a typical occasion, though not the only one, on which I had the opportunity to admire, and benefit from, Ian Steedman’s keen intelligence. The topic I am concerned with in this paper was a subject of discussion at those meetings, and I have written the paper as if writing for the next “Sraffa seminar”. My thesis, in brief, is that Sraffa’s notion of production prices is a refinement of the classical (Petty, Smith, Ricardo) notion of natural prices expressing the conditions of reproduction of the economy at a moment in time, as I had suggested in my 1975 book on Sraffa, but that this notion is quite different from the ‘long-period position” interpretation subsequently proposed by various authors. In order to identify the difference between these interpretations, it is opportune first of all to recall briefly the classical distinction between natural and market prices (see below). The background for these notions, as summarised on pp. 173-7, is to be found in the classical (“circular flow”) representation of the economy, which is conceived as an alternative to the “scarcity view” already dominant in ancient times, long before being re-proposed in neoclassicalmarginalist economics. One of the main differences between the “reproduction” and the “scarcity” views is the simultaneous determination of equilibrium prices and quantities within the neoclassical-marginalist approach, and the separation of the two issues within the classical approach (see pp. 177-8). This implies a way of dealing with time which is strikingly different from the approach implicit in the Marshallian short run-long run dichotomy; also, the notion of market prices as theoretical variables is ruled out, thus limiting the Smithian idea of gravitation of the market towards natural prices to the role of a mere metaphor (see pp. 178-81). Thus the notion of the long-period position proposed as an interpretation for Sraffian analysis appears to be a misleading compromise with the Marshallian-marginalist approach (see pp. 181-2). Once this is recognised, reconstruction of a classical Keynesian approach holds some promise as a possible path for further research (see pp. 182-3).
