Sraffa's Interpretation of Marx's Treatment of Fixed Capital

Abstract

It is well known that Sraffa analyzed fixed capital as a ‘joint product’ along with regular products, such that in each period a given machine (together with other material and labor inputs) produces a regular product plus a one-period-older machine of the same type. What is perhaps less well known is that Sraffa attributed this same method of dealing with fixed capital to Marx, and to Torrens, Malthus, and Ricardo. This paper examines the textual evidence presented by Sraffa to support his interpretation of Marx's treatment of fixed capital, and also examines more comprehensive textual evidence from the three volumes of Capital not considered by Sraffa. It is argued that Marx did not treat fixed capital as a joint product in his theory of prices, but instead consistently assumed a ‘straight-line’ method of depreciation, according to which a constant fraction of the total value of the fixed capital is transferred to the price of the product in each period, and the remaining value of the fixed capital is not part of the value of the product, but instead ‘remains fixed’ in the capital goods.