A comparative evaluation of Sraffa's ‘The laws of returns under competitive conditions’ and its Italian precursor

Abstract

In his classic paper 'The laws of returns under competitive conditions', Piero Sraffa (1926, p. 535) noted that 'the opening pages of this article contain a summary of the con clusions' of a paper which he wrote in Italian with the title 'Sulle relazioni fra costo e quantite prodotta' (Sraffa, 1925). It is my purpose here to compare the relative contri butions found in these two papers, the first of which, to the best of my knowledge, has not appeared in English translation.1 Sraffa's thesis that the Marshallian partial equi librium analysis of prices and quantities is inadequate in the case of industries subject to variable costs acquires added stature from the clear and detailed exposition it received in his 1925 paper, which also contains a critique of the analyses of variable returns of Turgot, J. S. Mill, Cairnes, Edgeworth, Wicksteed, Pigou, Pantaleoni, Barone, J. N. Keynes and particularly Marshall, among others. It is worthy of note that one of the major students and popularisers of Sraffa's work, A. Roncaglia, holds the view that 'the 1925 article is today of greater interest for it concen trates on criticism of Marshallian theory, as well as providing diverse hints of great interest (such as the analysis of'spurious margins' to which Sraffa refers in the preface to Production of Commodities [by Means of Commodities] ...)' (Roncaglia, 1978, p. 19).2 Roncaglia adds that 'the [1925] article greatly impressed the ageing Edgeworth who as a co-editor decided to invite Sraffa to write a second article in the same vein for the