Piero Sraffa

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.

Piero Sraffa
Born(1898-08-05)5 August 1898
Died3 September 1983(1983-09-03) (aged 85)
FieldPolitical economy
School or
Neo-Ricardian school
Alma materLondon School of Economics

Early life

Sraffa was born in Turin, Italy to Angelo Sraffa (1865–1937) and Irma Sraffa (née Tivoli) (1873–1949) a wealthy Italian Jewish couple.[1] 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. 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.

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.

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.

Major works

In 1927, Sraffa's yet undiscussed theory of value,[2] 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.

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.[3]

Ricardo's works and correspondence

John Eatwell wrote of Sraffa's work on David Ricardo:

[Sraffa's] reconstruction of Ricardo's surplus theory, presented in but a few pages of the introduction to his edition of Ricardo's Principles, penetrated a hundred years of misunderstanding and distortion to create a vivid rationale for the structure and content of surplus theory, for the analytical role of the labor theory of value, and hence for the foundations of Marx's critical analysis of capitalist production.[4]

Sraffian economics

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.[5] 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.[6]

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".[7][8]

Personal connections

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",[9] 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.[10]

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:[11]

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'".[12]

Sraffa and Wittgenstein influenced each other deeply. They continually corresponded and discussed each other in their journals and notebooks.[13] 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[14] 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.[15]

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.[16] 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. 66–67).[1]

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.


  • Sraffa, Piero, 1926, "The Laws of Returns under Competitive Conditions", Economic Journal, 36(144), pp. 535–50.
  • _____, 1960, Production of Commodities by Means of Commodities: Prelude to a Critique of Economic Theory. Cambridge University Press. Preview.
  • _____ and M.H. Dobb, editors (1951–1973). The Works and Correspondence of David Ricardo. Cambridge University Press, 11 vols. Online at the Online Library of Liberty.


  1. Jean-Pierre Potier (1991). Piero Sraffa, Unorthodox Economist (1898–1983): A Biographical Essay (1898–1983: a Biographical Essay). ISBN 978-0-415-05959-6.
  2. The participants of the Symposium 1930 in the Economic Journal were more concerned with how increasing returns can be made compatible with competition than with what are the consequences of increasing returns in the real world. Hicks (1939, The Foundations of Welfare Economics, pp. 696–712 in Economic Journal, IL, December 1939) concluded that Sraffa's view has destructive consequences for the major part of economic theory.
  3. G. C. Harcourt, 'Sraffa, Piero (1898–1983)', Oxford Dictionary of National Biography, Oxford University Press, 2004.
  4. John Eatwell (1984). "Piero Sraffa: Seminal Economic Theorist." Science and Society, 48(2), pp. 211–216. JSTOR 40402578 Reprinted in Piero Sraffa: Critical Assessments, J. Wood J. C. Wood, 1995, v. 1, pp. 74–79.
  5. Fabio D'Orlando (2005). "Will the Classical-type Approach Survive Sraffian Theory?", in Journal of Post Keynesian Economics, 27(4), pp. 633–654
  6. Philip Pilkington. "The Sraffian Versus the Marginalist Worldview: A Strong Case for Academic Pluralism", Fixing the Economists, April 29th 2014, http://fixingtheeconomists.wordpress.com/2014/04/29/the-sraffian-versus-the-marginalist-worldview-a-strong-case-for-academic-pluralism/
  7. Paul A. Samuelson ([1987] 2008). "Sraffian economics." The New Palgrave Dictionary of Economics 2nd Edition. Abstract.
  8. "L'Ordine Nuovo" (PDF). www.centrogramsci.it. Retrieved 2019-06-11.
  9. "Sraffa, Piero in "Il Contributo italiano alla storia del Pensiero: Economia"". www.treccani.it.
  10. Norman Malcolm. Ludwig Wittgenstein: A Memoir. pp. 58–59.
  11. R. Monk, Ludwig Wittgenstein (1991) p. 487
  12. A. Sinha, "Sraffa and the Later Wittgenstein" (2009)
  13. H. D. Kurz, "Critical Essays on Piero Sraffa's Legacy in Economics" (2000)
  14. A. Sinha, "Sraffa's Contribution to the Methodology of Economics (2015)
  15. "Piero SRAFFA". web.archive.org. 2 September 2000. Archived from the original on 2000-09-02.

Further reading

  • Steve Keen, Debunking Economics: The Naked Emperor of the Social Sciences (2001, Pluto Press Australia) ISBN 1-86403-070-4.
  • Heinz D. Kurz, Ed. "Critical Essays on Piero Sraffa's Contribution to Economics" (2000, Cambridge University Press) ISBN 0-521-58089-7.
  • Ranchetti F., "On the Relationship between Sraffa and Keynes", in T. Cozzi e R. Marchionatti (eds.), Piero Sraffa's Political Economy: A Centenary Estimate, Routledge, London, 2001.
  • Ranchetti F., "Communication and intellectual integrity. The correspondence between Keynes and Sraffa", in M.C. Marcuzzo e A. Rosselli (eds.), Economists in Cambridge, Routledge, London, 2005, pp. 119–148.
  • Sinha A., "Sraffa's Contributions to the Methodology of Economics." Journal of Interdisciplinary Economics January 2015 vol. 27 no. 1 33–48.
  • Sinha A., "Sraffa and the Later Wittgenstein." Contributions to Political Economy, 2009 Vol. 28, Issue 1, pp. 47–69.
  • Vianello, F. [1988], "A critique of Professor Goodwin's Critique of Sraffa", in: Ricci, G. and Velupillai, K. (eds.), Growth, Cycles and Multisectoral Economics: the Goodwin Tradition, Berlin, Sringer-Verlag, ISBN 978-3-540-19467-5.
  • Vianello, F. [1989], "Effective Demand and the Rate of Profits: Some Thoughts on Marx, Kalecki and Sraffa", in: Sebastiani, M. (ed.), Kalecki's Relevance Today, London, Macmillan, ISBN 978-0-312-02411-6.
  • Anderaos de Araujo Fabio., "Sraffa and the Labour Theory of Value - a note", Brazilian Journal of Political Economy, Oct-Dec 2019,vol 39, p.614-637.
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