Reviving the Cambridge Controversy by Combining Marx with Sraffa

Notes

1. The “Sraffa shock” in general describes the discussions provoked by PCC. Here, it will refer specifically to the broad acceptance, after some debate about the Sraffian equations and the transformation problem of values into production prices, that the labor theory of value is redundant for the quantitative determination of prices in general. It is not claimed that one must abandon the labor theory of value, but that the economist has this option. The main political point of the article is to argue that the reactionary movement behind the redundancy argument changes Sraffa's political position and uses his theory to marginalize Marx.

2. The two Cambridges debate (or Cambridge capital controversy) refers to the discussions initiated by the critique of Sraffa (1960) regarding the theory of capital. On the history of the debate, see: Harcourt (1972) and the more recent views of Chiodi and Ditta (2008), Cohen and Harcourt (2003) and Quaas (2000).

3. The terms “practical side” of Sraffa's book, its “praxis” or, still, its “concrete aim,” as argued here, refer to the use of PCC in order to effectively alter the teaching of economics.

4. The TSSI and the model of Farjoun and Machover (1983) are very close, because both are temporal in opposition to the simultaneist approach. In that sense, they can be envisaged as complementary efforts at creating the most advanced Marxist response to Steedman (1977). On the relation between the TSSI and Farjoun and Machover (1983), see Wells (2007). For critiques of the TSSI, see Mongiovi (2002), Mohun (2003), Mohun and Veneziani (2007), Park (2009) and the replies by Freeman and Kliman (2006) and Kliman (2009).

5. The terms “neoclassical” and “marginalism” will be treated as synonyms. They refer here to the contemporary dominant economic school that developed from the works of Jevons ([1871] 1970), Menger ([1871] 1950) and Walras ([1874] 1954).

6. This implies also that the two Cambridges debate is not over and will return, as argued by Cohen and Harcourt (2003).

7. For example, Hodgson (1997) argues that the “constructivist Sraffians” failed to build a coherent theoretical legacy. In his book, Evolution and Institutions , Hodgson (1999) uses the forgotten Cambridge capital controversy as an example of an issue that has been left unsolved by contemporary economic science.

8. “Marginism” was, according to Marcuzzo and Rosselli (2011), a term used by Sraffa to refer to what we call nowadays “marginal method” or “marginalism”.

9. The interpretation of the Marx-Sraffa knot of this article is similar to that of Screpanti (1993), who also tries to approach the issue from a practical perspective. The difference is that the work of Sraffa is interpreted as a tool which transports economists from neoclassicism back to the classics, so that they have a “second chance to take the right path” towards Capital . In that sense, it is very close to Tolipan (1979), who argues that Sraffa makes “the last movement of return to Ricardo.” The specific stance of this article is that the strategy for increasing the official acceptance of Marxist political economy implies that the philosophical question on the labor theory of value is removed with the following in mind: the controversy surrounding the labor theory of value should be dealt with only after PCC has gained some popularity among economists unsatisfied with the marginal method. This is the easiest way to avoid useless conflicts between Marxists and Sraffians and to get them working together. Then, after it becomes clear that value theory must be developed dialectically (both quantitatively and qualitatively), it will be possible to relate mainstream economics directly to the Marxian framework as proposed by Oskar Lange (1935, 1936, 1937).

10. For a precise description of the “long position” or “long period,” see Kurz (1998). For the relationship between classical prices and Sraffa's prices, see Kurz (1985) and Sinha (2010). There is still discussion about Sraffa's model being interpreted as a formal model of classical economics. See, for example, Hollander (1987) and Blaug (1999) (responded to by Kurz and Salvadori 2002).

11. Many are skeptical about this, however. Stamatis (1984) admits that every critique of the neoclassical school must end in the study of classical political economy and its critique, but he is reluctant to accept a direct connection between Marx and Sraffa. Belluzzo (1998) argues similarly.

12. The internal attack was already initiated by Sraffa himself years before the publication of PCC with two articles that led him to Cambridge. The immediate effect of these works was the beginning of the theory of imperfect competition. See Sraffa (1925) and Sraffa (1926).

13. For Harcourt, the debate had already begun with Robinson (1953–54). Here, Sraffa (1960) will be considered the initiator of the critique of neoclassical theory because of the expansion of the issue caused by the publication of PCC. For formal presentations of the debate see Harcourt (1972), Cohen and Harcourt (2003) and Schefold (2004).

14. Heinrich (1999) and others argue that the generalization of calculus due to the developments in classical physics influenced the development of the marginalist approach in economics. So, to explain the ascendancy of neoclassical school exclusively by the political struggle may be exaggerated.

15. If one wants to trace exactly how the diversion occurred, my guess would be to start with Samuelson's paper of 1971. It would be interesting to know if the repetition of Samuelson's (1957) argument with a Sraffian model has any relation to the hypothesis here presented. It was Samuelson's “voilà” of 1971 that triggered the controversy between the Marxian and Sraffian theories on the basis of the debate on the transformation problem of values into production prices. It was followed by Lerner (1972), Mattick (1972), Samuelson (1972), Napoleoni (1972), Bronfenbrenner (1973), Samuelson (1973), Baumol (1974a), Samuelson (1974a), Morishima (1974), Baumol (1974b) and Samuelson (1974b); later came Steedman (1977) (commented on by Samuelson 1982) and a vast list of subsequent contributions on the redundancy of the labor theory of value, which absorbed all efforts from the Marxist school regarding PCC. This practical result could have been Samuelson's intention, but this really does not matter, since the solution to the problem does not depend on that information. Anyway , I can refer to Southworth (1972), if there is any interest in speculation about this “Marxist disguised as a vulgar economist,” as Engels would probably have labeled Samuelson (see Engels [1894] 2004). Kliman (2010) describes the same process of dissolution of the Marxian School emphasizing its internal aspects. I think that both technical and political factors contributed to turning the issue into a scholastic question. However, the point is not to explain the origin of the problem, but to solve it .

16. For a simple mathematical explanation of the quantitative solution of the transformation problem, see Pasinetti (1979).

17. The direct identification of surplus product with surplus-value is inappropriate. But it is important to remember that Sraffa purposely used historical categories of capitalism to describe concepts that are suitable for non-capitalist forms of production, as Bellofiore (2008) reports based on his studies of the Sraffa's unpublished notes. This may have contributed to the confusion. It is understandable why the confusion between the “Ricardian surplus” and “Marxist surplus-value” worsened after the publication of Sraffa's work, as Belluzzo (1998) argues.

18. Among Marx's sympathizers, there is a general belief that the labor theory of value is necessary to show and to prove exploitation in capitalism, as if the concrete conditions of laboring required any formalization in order to clarify the fact that the worker does not command the production process. The fact is that exploitation exists regardless of the value theory that is currently prevailing in academy.

19. These words are used by Marx to characterize a “purely scholastic question.” On the method employed for constructing the strategy suggested in this article, see Marx's “Theses on Feuerbach” (Marx [1888] 1978) and the corresponding implications for philosophy in general.

20. In that sense, it is similar to Shaikh's (1984) proposal to separate the “real contributions” enabled by Sraffa's framework from the ideological forces that obscure things by not clarifying the real aspects behind mathematical formalization.

21. This was the contradiction facing classical political economy, which Engels ([1885] 1963) formulated as a challenge to the economists of his time in the preface to Capital , Volume 2.

22. The following excerpt from Marx asks the same question: “Political Economy has indeed analyzed, however incompletely, value and its magnitude, and has discovered what lies beneath these forms. But it has never once asked the question why labour is represented by the value of its product and labour time by the magnitude of that value” (Marx ([1867] 2004).

23. Or because authors are discussing which one is the most important. Meek ([1956] 1973) formulates both questions like this: “The basic logical problem to be solved here is simply that of the determination of these prices (exchange values). And for Marx (…) no solution could be regarded as adequate which did not possess as it were two dimensions: a qualitative and a quantitative one. The qualitative aspect of the solution was directed to the question: Why do commodities possess prices at all? [question (ii)] The quantitative aspect was directed to the question: Why do commodities possess the particular prices they do? [question (i)]” (Meek ([1956] 1973): 306).

24. An example of that position is Heinrich (1999).

25. In that sense, the mainstream itself is led to develop genuine scientific knowledge, even if unconsciously, so that the operations of the system may be conducted. This is, by the way, the meaning of Oskar Lange's use of mainstream analytical devices in order to relate the law of value with economic planning.

26. For the “peanut theory of value,” see Bowles and Gintis (1981), Laibman (1992: 56), and Lee (1993). A criticism was presented by Schweickart (1989), who argues that the claim that any commodity could be the “special one” does not distinguish the social from the technical conditions of production.

27. It does not mean that the relation between man (active) and nature (passive) is not dialectical. For Marx's view of labor and nature, see: Marx ([1844] 1968) [MEW 40]: 516 and Marx and Engels ([1846] 1969) [MEW 3]: 21.

28. This kind of reasoning is at first sight close to the approaches that evoke Marx's early writings as a way of defending the special status of labor among the other factors, like Hunt (1982). Similarly, Smith (1994) believes that the separation proposed by Althusser ([1965] 2005) is only apparent. However, as Bowles and Gintis (1981) rightly argue, this supposed union of early humanism in Marx with his mature position on science is untenable. For that reason, it is important not to justify the theory philosophically (although this is perfectly possible on an individual level) but to comprehend it as the value theory of workers.

29. In that sense, Bryceson (1983) writes that “the law of value provides the conceptual framework for restructuring an understanding of societal allocation of labour under all modes of production”.

30. This defense of the labor theory of value based on political motives developed from the reaction of Hilferding to the critique of Böhm-Bawerk, according to Garegnani and Petri ([1982] 1989). A greater acceptance of Sraffian theory among Marxists is impeded because of this political justification of the theory, according to these authors.

31. This has been argued recently by Hodgson (1982) and DiQuattro (1984) and earlier by Lange (1935). The same was sustained explicitly by Engels ([1894] 2004), as argued in section 4.

32. Something similar has been pointed out by Fine (2001) when he writes that “many supporters of value theory have been seduced” by the arguments that interpret the value and price systems as two independent and alternative instances, one of which must be accepted and the other rejected.