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Interpreting the Nature of Sraffa’s Equations: A Critique of Garegnani’s Interpretation

Ajit Sinha ()
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Ajit Sinha: Thapar School of Liberal Arts and Sciences

Chapter Chapter 1 in A Reflection on Sraffa’s Revolution in Economic Theory, 2021, pp 1-48 from Palgrave Macmillan

Abstract: Abstract This chapter argues that Sraffa broke away from both the classical idea of rooting theory in the notion of ‘ultimate cause’ as well as mechanical causation of equilibrium of forces. Sraffa’s idea of a system of basic goods denies the possibility of reducing production to labour and Nature alone. His system is composed of well-defined structural properties, an implication of which is that the rate of profits in all the industries must be uniform. Garegnani and his associates missed out on this insight of Sraffa and therefore imposed the classical mechanism of gravitation of ‘market prices’ to ‘natural prices’ in order to make sense of the condition of the uniform rate of profits in the equations of Sraffa’s system. The chapter shows that this produced contradictions and incoherence in our understanding of Sraffa’s theoretical achievement.

Keywords: System of basic goods; Gravitation mechanism; Uniform rate of profits; Classical economics; Sraffa; Garegnani (search for similar items in EconPapers)
Date: 2021
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DOI: 10.1007/978-3-030-47206-1_1

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