|Died||3 September 1983 85) (aged|
|Alma mater||London School of Economics|
Piero Sraffa ( // ; 5 August 1898 – 3 September 1983) was an influential Italian economist who served as lecturer of economics at the University of Cambridge. His book Production of Commodities by Means of Commodities is taken as founding the neo-Ricardian school of economics.
An economist is a practitioner in the social science discipline of economics.
Economics is the social science that studies the production, distribution, and consumption of goods and services.
The University of Cambridge is a collegiate public research university in Cambridge, United Kingdom. Founded in 1209 and granted a Royal Charter by King Henry III in 1231, Cambridge is the second-oldest university in the English-speaking world and the world's fourth-oldest surviving university. The university grew out of an association of scholars who left the University of Oxford after a dispute with the townspeople. The two 'ancient universities' share many common features and are often referred to jointly as 'Oxbridge'. The history and influence of the University of Cambridge has made it one of the most prestigious universities in the world.
Sraffa was born in Turin, Italy to Angelo Sraffa (1865–1937) and Irma Sraffa (née Tivoli) (1873–1949) a wealthy Italian Jewish couple. [ citation needed ] He studied in his home town and graduated at the local university with a work on inflation in Italy during and after World War I. His tutor was Luigi Einaudi, one of the most important Italian economists and later a president of the Italian Republic.His father was a professor in commercial law and later dean at the Bocconi University in Milan. Despite being raised a practicing Jew, Sraffa later became an agnostic.
Commercial law, also known as trade law, is the body of law that applies to the rights, relations, and conduct of persons and businesses engaged in commerce, merchandising, trade, and sales. It is often considered to be a branch of civil law and deals with issues of both private law and public law.
Dean is a title employed in academic administrations such as colleges or universities for a person with significant authority over a specific academic unit, over a specific area of concern, or both. Deans are common in private preparatory schools, and occasionally found in middle schools and high schools as well.
Bocconi University is a private university in Milan, Italy. Bocconi provides undergraduate, graduate and post-graduate education in the fields of economics, management, finance, law, political science and public administration. SDA Bocconi, the university's business school, and offers MBA and Executive MBA programs.
From 1921 to 1922, he studied at the London School of Economics. In 1922, he was appointed director of the provincial labour department in Milan, then professor in political economy first in Perugia and later in Cagliari, Sardinia. In Turin, he met Antonio Gramsci (the most important leader of Italian Communist Party). They became close friends, partly due to their shared political views. Sraffa was also in contact with Filippo Turati, perhaps the most important leader of the Italian Socialist Party, whom he allegedly met and frequently visited in Rapallo, where his family had a holiday villa.
The London School of Economics is a public research university located in London, England, and a constituent college of the federal University of London. Founded in 1895 by Fabian Society members Sidney Webb, Beatrice Webb, Graham Wallas, and George Bernard Shaw for the betterment of society, LSE joined the University of London in 1900 and established its first degree courses under the auspices of the University in 1901. The LSE started awarding its own degrees in 2008, prior to which it awarded degrees of the University of London.
Political economy is the study of production and trade and their relations with law, custom and government; and with the distribution of national income and wealth. As a discipline, political economy originated in moral philosophy, in the 18th century, to explore the administration of states' wealth, with "political" signifying the Greek word polity and "economy" signifying the Greek word "okonomie". The earliest works of political economy are usually attributed to the British scholars Adam Smith, Thomas Malthus, and David Ricardo, although they were preceded by the work of the French physiocrats, such as François Quesnay (1694–1774) and Anne-Robert-Jacques Turgot (1727–1781).
Perugia is the capital city of both the region of Umbria in central Italy, crossed by the river Tiber, and of the province of Perugia. The city is located about 164 kilometres north of Rome and 148 km southeast of Florence. It covers a high hilltop and part of the valleys around the area. The region of Umbria is bordered by Tuscany, Lazio, and Marche.
In 1925, he wrote about returns to scale and perfect competition, underlining some doubtful points of Alfred Marshall's theory of the firm. This was amended for British readers and published in 1926 as The Laws of Returns under Competitive Conditions.
In economics, returns to scale and economies of scale are related but different concepts that describe what happens as the scale of production increases in the long run, when all input levels including physical capital usage are variable. The concept of returns to scale arises in the context of a firm's production function. It explains the behavior of the rate of increase in output (production) relative to the associated increase in the inputs in the long run. In the long run all factors of production are variable and subject to change due to a given increase in size (scale). While economies of scale show the effect of an increased output level on unit costs, returns to scale focus only on the relation between input and output quantities.
In economics, specifically general equilibrium theory, a perfect market is defined by several idealizing conditions, collectively called perfect competition. In theoretical models where conditions of perfect competition hold, it has been theoretically demonstrated that a market will reach an equilibrium in which the quantity supplied for every product or service, including labor, equals the quantity demanded at the current price. This equilibrium would be a Pareto optimum.
Alfred Marshall, FBA was one of the most influential economists of his time. His book, Principles of Economics (1890), was the dominant economic textbook in England for many years. It brings the ideas of supply and demand, marginal utility, and costs of production into a coherent whole. He is known as one of the founders of neoclassical economics. Although Marshall took economics to a more mathematically rigorous level, he did not want mathematics to overshadow economics and thus make economics irrelevant to the layman.
In 1927, Sraffa's yet undiscussed theory of value,but also his friendship with Antonio Gramsci—a risky and compromising endeavor in the context of the Italian fascist regime, considering Gramsci had previously been imprisoned (Sraffa supplied the material, literally pens and paper, with which Gramsci would write his Prison Notebooks )—brought John Maynard Keynes to prudently invite Sraffa to the University of Cambridge, where the Italian economist was initially assigned a lectureship.
A theory of value is any economic theory that attempts to explain the exchange value or price of goods and services. Key questions in economic theory include why goods and services are priced as they are, how the value of goods and services comes about, and—for normative value theories—how to calculate the correct price of goods and services.
Antonio Francesco Gramsci was an Italian Marxist philosopher and communist politician. He wrote on political theory, sociology and linguistics. He attempted to break from the economic determinism of traditional Marxist thought and so is considered a key neo-Marxist. He was a founding member and one-time leader of the Communist Party of Italy and was imprisoned by Benito Mussolini's Fascist regime.
The Prison Notebooks were a series of essays written by the Italian neo-Marxist Antonio Gramsci. Gramsci was imprisoned by the Italian Fascist regime in 1926. The notebooks were written between 1929 and 1935, when Gramsci was released from prison on grounds of ill-health. He died in April 1937.
Together with Frank P. Ramsey and Ludwig Wittgenstein, Sraffa joined the so-called cafeteria group, an informal club that discussed Keynes's theory of probability and Friedrich Hayek's theory of business cycles (see Sraffa–Hayek debate). In 1939, Sraffa was elected to a fellowship at Trinity College.
Frank Plumpton Ramsey was a British philosopher, mathematician and economist who made major contributions to all three fields before his death at the age of 26. He was a close friend of Ludwig Wittgenstein and was instrumental in translating Wittgenstein's Tractatus Logico-Philosophicus into English, as well as persuading Wittgenstein to return to philosophy and Cambridge. Like Wittgenstein, he was a member of the Cambridge Apostles, the intellectual secret society, from 1921.
Ludwig Josef Johann Wittgenstein was an Austrian philosopher who worked primarily in logic, the philosophy of mathematics, the philosophy of mind, and the philosophy of language.
A Treatise on Probability was published by John Maynard Keynes while at Cambridge University in 1921. The Treatise attacked the classical theory of probability and proposed a "logical-relationist" theory instead. In a 1922 review, Bertrand Russell, the co-author of Principia Mathematica, called it "undoubtedly the most important work on probability that has appeared for a very long time," and said that the "book as a whole is one which it is impossible to praise too highly."
John Eatwell wrote of Sraffa's work on David Ricardo:
Sraffa's Production of Commodities by Means of Commodities was an attempt to perfect classical economics' theory of value as originally developed by Ricardo and others. He aimed to demonstrate flaws in the mainstream neoclassical theory of value and develop an alternative analysis. In particular, Sraffa's technique of aggregating capital as "dated inputs of labour" led to a famous scholarly debate known as the Cambridge capital controversy.
Economists disagree on whether Sraffa's work refutes neoclassical economics. Many post-Keynesian economists use Sraffa's critique as justification for abandoning neoclassical analysis and exploring other models of economic behavior. Others see his work as compatible with neoclassical economics as developed in modern general equilibrium models, or as unable to determine a long-period position, just like the Walrasian approach.Others still argue that the importance of Sraffa's economics is that it provides a new framing for how we understand capitalist economies that does not fall back on the arguably unrealistic assumptions of neoclassical economics.
Nonetheless, Sraffa's work, particularly his interpretation of Ricardo and his Production of Commodities by Means of Commodities (1960), is seen as the starting point of the neo-Ricardian school in the 1960s. His approach has been described as serving "to help judge Ricardo's editor and to illuminate the unity in [his] scientific vision, from before 1926 until death in 1983".
Sraffa was a close friend of Italian Marxist thinker Antonio Gramsci and was instrumental in securing Gramsci's prison notebooks from the Fascist authorities after the latter's death in 1937. Titled "Problems of today and of Tomorrow",Gramsci published 1924 a letter from Sraffa (without signing, signed S.). In the letter, Sraffa emphasizes the function of bourgeois opposition in the struggle against fascism and the importance of democratic institutions for the social and political development of the proletariat. Seeing the Italian Communist Party as weak, Sraffa recommended collaboration with the bourgeois opposition to fascism. In his answer, Gramsci rejects this suggestion, but he followed Sraffa’s advice several years later.
Norman Malcolm famously credits Sraffa with providing Ludwig Wittgenstein with the conceptual break that founded the Philosophical Investigations , by means of a rude gesture on Sraffa's part:
Wittgenstein was insisting that a proposition and that which it describes must have the same 'logical form', the same 'logical multiplicity'. Sraffa made a gesture, familiar to Neapolitans as meaning something like disgust or contempt, of brushing the underneath of his chin with an outward sweep of the finger-tips of one hand. And he asked: 'What is the logical form of that?'
In the introduction to Philosophical Investigations, Wittgenstein mentions discussions with Sraffa over many years and says: "I am indebted to this stimulus for the most consequential ideas in this book". However, Sraffa broke off his weekly conversations with Wittgenstein in 1946 over the latter's protests; and when the philosopher said he would talk about anything Sraffa wanted, "'Yes', Sraffa replied, 'but in your way'".
Sraffa and Wittgenstein influenced each other deeply. They continually corresponded and discussed each other in their journals and notebooks. [ clarification needed (see talk)]Both authors were dealing with a form of positivism dominant in their respective disciplines, economics and philosophy. While Wittgenstein made his famous turn from the Tractatus Logico-Philosophicus to the Philosophical Investigations wherein he jettisoned the previous idea that the world comprised an atomistic set of propositional facts for the notion that meaning derives from its use within a holistic self-enclosed system. Analogously, Sraffa was rebutting the neoclassical paradigm which was similarly atomistic, individualistic and derivational (see criticisms of neoclassical economics). While there are disputes about how to interpret Sraffa—falling primarily into the neoclassical camp of Paul Samuelson and the neo-Ricardian of Pierangelo Garegnani—none dispute Sraffa's influence and it can be argued that Sraffa's critique of neoclassical economics is analogous to that of Wittgenstein's of philosophy, in that Sraffa sought to replace the individualistic and positivistic account of price as the result of an equilibration of supply and demand, for instead as price serving a social function, namely to reproduce a stationary or expanding economy given a distribution of income.
Sraffa was described as a shy and very intelligent man who was devoted to study and books. His library contained more than 8,000 volumes, many of which are now in the Trinity College Library. A popular anecdote claims that Sraffa made successful long-term investments in Japanese government bonds that he bought the day after the nuclear bombing on Hiroshima and Nagasaki. 66–67).Another version of this is that Sraffa bought the bonds during the war when they were trading at distressed prices as he was convinced that Japan would honour its obligations (Nicholas Kaldor, pp.
In 1961, when the Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel had not yet been created, he was awarded the Söderströmska Gold Medal by the Royal Swedish Academy of Science. In 1972, he was awarded an honorary doctorate by Sorbonne and in 1976 received another one from Madrid's Complutense university.
David Ricardo was a British political economist, one of the most influential of the classical economists along with Thomas Malthus, Adam Smith and James Mill.
Post-Keynesian economics is a school of economic thought with its origins in The General Theory of John Maynard Keynes, with subsequent development influenced to a large degree by Michał Kalecki, Joan Robinson, Nicholas Kaldor, Sidney Weintraub, Paul Davidson, Piero Sraffa and Jan Kregel. Historian Robert Skidelsky argues that the post-Keynesian school has remained closest to the spirit of Keynes' original work. It is a heterodox approach to economics.
Classical economics or classical political economy is a school of thought in economics that flourished, primarily in Britain, in the late 18th and early-to-mid 19th century. Its main thinkers are held to be Adam Smith, Jean-Baptiste Say, David Ricardo, Thomas Robert Malthus, and John Stuart Mill. These economists produced a theory of market economies as largely self-regulating systems, governed by natural laws of production and exchange.
In economics, the cost-of-production theory of value is the theory that the price of an object or condition is determined by the sum of the cost of the resources that went into making it. The cost can comprise any of the factors of production and taxation.
In classical economics, Say's law, or the law of markets, states that "Supply creates its own demand", the aggregate production necessarily precedes an equal quantity of aggregate demand. Say's Law is often incorrectly said to state that production inherently creates consumption. In his principal work, A Treatise on Political Economy, Jean-Baptiste Say wrote: "A product is no sooner created, than it, from that instant, affords a market for other products to the full extent of its own value." And also, "As each of us can only purchase the productions of others with his own productions – as the value we can buy is equal to the value we can produce, the more men can produce, the more they will purchase."
The neo-Ricardian school is an economic school that derives from the close reading and interpretation of David Ricardo by Piero Sraffa, and from Sraffa's critique of neo-classical economics as presented in his The Production of Commodities by Means of Commodities, and further developed by the neo-Ricardians in the course of the Cambridge capital controversy. It particularly disputes neo-classical theory of income distribution.
Maurice Herbert Dobb was a British economist at Cambridge University and a Fellow of Trinity College, Cambridge. He is remembered as one of the pre-eminent Marxist economists of the 20th century.
Heterodoxy is a term that may be used in contrast with orthodoxy in schools of economic thought or methodologies, that may be beyond neoclassical economics. Heterodoxy is an umbrella term that can cover various schools of thought or theories. These might for example include institutional, evolutionary, Georgist, Austrian, feminist, social, post-Keynesian ,, ecological, Marxian, socialist and anarchist economics, among others.
Pierangelo Garegnani (1930–2011) was an Italian economist and professor of the University of Rome III. He was the Director of the Fondazione Centro Piero Sraffa di Studi e Documenti at the Federico Caffè School of Economics, and also the literary executor of the works, documents and papers left by the eminent Italian economist Piero Sraffa to the University of Cambridge's Wren Library. Professor Garegnani has been one of the leading theoretical critics of neoclassical economics. He has published several books and articles concerning the classical economic theory, from Ricardo to Sraffa, as an alternative theoretical foundation to analyse the capitalist economy. An account of his contributions was published by the Royal Economic Society.
Gottfried von Haberler was an Austrian-American economist. He worked in particular on international trade. One of his major contributions was reformulating the Ricardian idea of comparative advantage in a neoclassical framework, abandoning the labor theory of value for an opportunity cost concept.
Ronald Lindley Meek, also known as Ron Meek, was a Marxian economist and social scientist known especially for his scholarly studies of classical political economy and the labour theory of value. During the 1960s and 1970s, his writings had a strong influence on the Western academic discussion about Marx's economic theory.
Alister George Douglas Watson was a mathematician who was identified by several writers as a key member of the Cambridge spy ring.
Luigi L. Pasinetti is an Italian economist of the post-Keynesian school. Pasinetti is considered the heir of the "Cambridge Keynesians" and a student of Piero Sraffa and Richard Kahn. Along with them, as well as Joan Robinson, he was one of the prominent members on the "Cambridge, UK" side of the Cambridge capital controversy. His contributions to economics include developing the analytical foundations of Neo-Ricardian economics, including the theory of value and distribution, as well as work in the line of Kaldorian theory of growth and income distribution. He has also developed the theory of structural change and economic growth, structural economic dynamics and uneven sectoral development.
Ricardian socialism is a branch of classical economic thought based upon the work of the economist David Ricardo (1772–1823). The term is used to describe economists in the 1820s and 1830s who developed a theory of capitalist exploitation from the theory developed by Ricardo that stated that labor is the source of all wealth and exchange value. This principle extends back to the principles of English philosopher John Locke. The Ricardian socialists reasoned that labor is entitled to all it produces, and that rent, profit and interest were not natural outgrowths of the free market process but were instead distortions. They argued that private ownership of the means of production should be supplanted by cooperatives owned by associations of workers.
Anwar M. Shaikh is a Pakistani American economist working in the classical tradition. He is currently Professor of Economics at the Graduate Faculty of The New School in New York City. His work in political economy has focused on the economic theory and empirical patterns of developed capitalism. He has written on international trade, finance theory, political economy, U.S. macroeconomic policy, the welfare state, growth theory, inflation theory, crisis theory, inequality on the world scale, and past and current global economic crises.
Murray Milgate, is an Australian-born academic economist and Fellow and Director of Studies in Economics at Queens' College in the University of Cambridge. He is the co-creator and co-editor of the celebrated original edition of The New Palgrave Dictionary of Economics (1987) together with John Eatwell and Peter Newman.
Fernando Vianello was an Italian economist and academic.
The Cambridge capital controversy, sometimes called "the capital controversy" or "the two Cambridges debate", was a dispute between proponents of two differing theoretical and mathematical positions in economics that started in the 1950s and lasted well into the 1960s. The debate concerned the nature and role of capital goods and a critique of the neoclassical vision of aggregate production and distribution. The name arises from the location of the principals involved in the controversy: the debate was largely between economists such as Joan Robinson and Piero Sraffa at the University of Cambridge in England and economists such as Paul Samuelson and Robert Solow at the Massachusetts Institute of Technology, in Cambridge, Massachusetts.
Krishna Bharadwaj was an Indian Neo-Ricardian economist mainly known for her contributions to the economic development theory and the revival of the ideas of classical economics. She believed that economic theory should be based on concepts which can be observed and be amenable to measurement in reality.
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