Sraffa and the Labour Theory of Value: a note

Abstract

The author seeks to demonstrate that the price system proposed by Piero Sraffa in his major work Production of Commodities by Means of Commodities - Prelude to a Critique of Economic Theory is compatible with both David Ricardo and Karl Marx’s labour embodied theory of value and with Adam Smith’s labour-commanded theory of value. In reality, Sraffa’s measure of prices, the Standard Commodity, satisfies rigorously the mathematical condition of invariability in relation to income distribution between wages and profits. In this sense, it offers a consistent solution to the transformation problem of embodied labour values into production prices. Besides, the Standard ratio or the maximum rate of profits R can be used to analyse the evolution of the three major types or forms of technical progress in a capitalist economy, as follows: labour-using, neutral and capital-using techniques.

A typology of Marxian transformation procedures with endogenous exploitation rate

“…The total amount of labor performed in one production period and the amount of labor embodied in one unit of standard net product are equal. (p. 554) Araujo (2019) explores the compatibility of the two solutions and reached the same conclusion:…”

“…Standard Commodity can be a consistent solution to the transformation problem of labour values into prices of production because it satisfies rigorously the mathematical condition of invariability in relation to income distribution between wages and profits. (p. 615) Both Eatwell (1975) and Araujo (2019) define their system in terms of the neo-Ricardian model where a fixed consumption bundle is associated with wages. An interesting model is developed by Roberts (2009) where the redistribution of surplus is studied in this framework.…”

“…Montes-Rojas (2017) evaluates a capital invariant solution based on both constant and variable capital invariance equations. Eatwell (1975), Roberts (2009) and Araujo (2019) among others study the particular case of the use of the Sraffa's Standard Commodity where the equivalence of both price and value systems is maintained. Their specific model is based on the neo-Ricardian framework using a worker's consumption bundle.…”

Comment on “Sraffa and the Labour Theory of Value: a note” - Reply to William Jefferies

“…It is with great pleasure I receive the criticism from Jefferies (2020) to my article (Araujo, 2019). As interesting questions are raised in his criticisms, they are an excellent opportunity to reaffirm the logical consistency of Sraffa's model to solve both the determination of prices and income distribution, that is, to move away definitively every subjective or arbitrary postulate of invariance, that is, a numeraire invariant to changes in distribution.…”

Raíces de la teoría de la explotación y la crítica austriaca: de Sismondi a Böhm-Bawerk

“…Si llegara hasta las últimas consecuencias, tendría que asumir que el valor de los bienes depende en última instancia de las valoraciones subjetivas de los actores económicos, lo cual daría al traste con uno de los soportes fundamentales de la Escuela Clásica. Ricardo era consciente del rol del tiempo en otro sentido, al momento de plantear que el valor de las mercancías depende tanto del trabajo incorporado inmediato como del trabajo pasado incorporado en los medios de producción (Sraffa, 1960) (Araujo, 2019) (Rongaglia, 1980). Como señala el propio Ricardo:…”