ABSTRACT
Sraffa’s 1960 book, Production of Commodities by Means of Commodities, has been cited as playing a decisive role in the development of post-Keynesian theory. Since the precise nature of Sraffa’s contribution to the reconstruction of economic theory along non-neoclassical lines is not always clearly specified, and the scope and conceptual framework of his analysis have remained somewhat obscure, this chapter attempts to place Sraffa’s work in proper perspective in relation to post-Keynesian theory. Sraffa’s book not only provides the basis for a critique of neoclassical theory; it also contains an analysis of prices along classical lines. There are two classical problems in particular to which Sraffa gives a definitive solution: the distinction between necessary and luxury commodities; and the definition of an “invariable” standard of value. This ideological implication of the marginal analysis, together with the theory of value and distribution on which it relies, must be viewed with skepticism in the face of Sraffa’s criticisms.
