Representing the production and circulation of commodities in material terms: On Sraffa's objectivism

Abstract

The paper discusses Sraffa's interpretation of the classical economists and, following their lead, his elaboration of an objectivist, surplus-based theory of value and distribution. The emphasis is on the twin concepts of physical real costs and social surplus on the one hand and that of a circular flow of production on the other. In order to determine relative prices within such an analytical scheme, the tool of simultaneous equations is indispensable. It is then argued that fixed capital turned out to be a formidable obstacle: whereas the circulating part of capital allows one to entertain the idea of a material-cum-value transmigration into the product, this idea loses much of its appeal with regard to the durable part. Sraffa eventually overcame the difficulty in terms of the joint-products approach.