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American Economic Association

Sraffa, Wittgenstein, and GramsciAuthor(s): Amartya SenSource: Journal of Economic Literature, Vol. 41, No. 4 (Dec., 2003), pp. 1240-1255Published by: American Economic AssociationStable URL: http://www.jstor.org/stable/3217460.

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Journal of Economic LiteratureVol. XLI (December 2003) pp. 1240-1255

S r a f f a Wittgenstein n d ramsc iAMARTYA EN'

1. IntroductionWhen, in February this year, the Acca-demia Nazionale dei Lincei had a large con-ference in Rome on the twentiethanniversary of the death of Piero Sraffa,2

they were celebrating the memory of anextraordinaryntellectual, one who publishedremarkablylittle but significantly influencedcontemporaryeconomics, philosophy,and thesocial sciences. Sraffa's intellectual impactincludes several new explorations in econ-omic theory, including a reassessment of thehistory of political economy (startingwith thework of David Ricardo).3He also had a criti-cally important influence in bringing aboutone of the majordeparturesin contemporary

philosophy, namely Ludwig Wittgenstein'smomentous movement from his earlyposition in Tractatus Logico-Philosophicus(Wittgenstein 1921) to the later PhilosophicalInvestigations (Wittgenstein 1951).4The economist Sraffa s often separatedout from his other roles. This is partlybecause Sraffawas professionally an econo-mist, but also because his economic contri-butions seem, at least superficially, to standapart from his philosophical ideas. Eventhough he published only a few articles andone book, apart from editing DavidRicardo'sworks, Sraffa is also a much-citedauthor in economics.5 His economic contri-butions, particularly his one book,Production of Commodities by Means ofCommodities: Prelude to a Critique ofEconomic Theory (Sraffa 1960), have gener-ated major controversies in economics.Sraffa's works initiated a substantial schoolof thought in economic theory, and yet othereconomists have argued that there is nothingmuch of substance in his writings, and stillothers (most notably Paul Samuelson) have

1 Sen: TrinityCollege.2 Piero Sraffa: Convegno Internazionale, AccademiaNazionale dei Lincei, February 11-12, 2003. This essaydraws on a longer essay ( Piero Sraffa: A Student'sPerspective )presented there, which will be published bythe Accademia.For helpful discussionsover many years, Iam greatly indebted to Kenneth Arrow, Kaushik Basu,Christopher Bliss, Nick Denyer, Maurice Dobb,Pierangelo Garegnani,Frank Hahn, Geoff Harcourt,JohnHicks, Heinz Kurz, Brian McGuinness, James Mirrlees,Robert Nozick, Luigi Pasinetti, Suzy Payne, HilaryPutnam,Joan Robinson,Emma Rothschild,Robert Solow,Luigi Spaventa, and Stefano Zamagni, and of course toPiero Sraffahimself. I am also grateful to the editor andreferees of this journal for useful suggestions.3 On this see Pierangelo Garegnani (1960, 1998);Alessandro Roncaglia(1978, 1999); Luigi Pasinetti (1979,1988); Nicholas Kaldor (1984, 1985); John Eatwell andCarlo Panico (1987); Paul Samuelson (1987, 2000a,b);Paolo Sylos Labini (1990); and Bertram Schefold (1996),among other writings.

4 See also Wittgenstein (1953, 1958) for issues relatedto this transition.5 See, for example, the widely used The New Palgrave:A Dictionary of Economics (Eatwell, Milgate, andNewman 1987). Books in English on Sraffa's ife and con-tributions include, among others, Ian Steedman (1977,1988); Roncaglia (1978); Jean-Pierre Potier (1987);Schefold(1989);KrishnaBharadwaj nd BertramSchefold(1990); Terenzio Cozzi and Roberto Marchionatti 2000);and Heinz Kurz(2000).1240

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Sen:Sraffa,Wittgenstein,and Gramsci 1241argued that Sraffa is partly profound andpartlyjust wrong.6The temptation to examine the econo-mist Sraffa separately has certainly beenstrong. And yet there is something to begained from seeing Sraffa's different contri-butions together. No less importantly for thehistory of philosophical thought, it may beimportant to reexamine Sraffa's nteractionswith Wittgenstein, whom Sraffa stronglyinfluenced, in the light of Sraffa's relation-ship with Antonio Gramsci,the Marxisttheo-rist, who had a strong influence on Sraffa.Indeed, these dual relations also provide anopportunity to explore a possible Gramsciconnection in the transformation of earlyWittgenstein into laterWittgenstein.

2. Wittgenstein and SraffaLudwig Wittgenstein returned to TrinityCollege, Cambridge, in January 1929, after

having left Cambridge in 1913, where hehad been a student of Bertrand Russell.Wittgenstein's return was quite an event,given his already established reputation asa genius philosopher. John MaynardKeynes wrote to his wife, Lydia Lopokova:

Well, God has arrived. I met him on the5:15 train.Piero Sraffa, who did not know Wittgen-stein earlier, had moved to Cambridge fromItaly a little over a year before Wittgenstein'sreturn. Even though Sraffawas only 29 yearsold at that time (he was born in Turin onAugust 5th, 1898), he was already well-

known in Britain and Italy as a highly origi-nal economist. He had obtained a researchdegree, (testi de Laurea) from the Universityof Turin in late 1920, with a thesis on mone-tary economics, but it was an article on thefoundations of price theory which he pub-lished in 1925 in Annali di Economia (a jour-nal based in Milan) that made him a majorcelebrity in Italy and Britain. In this essay

Sraffademonstrated hat the foundationsofongoing price theory developed by AlfredMarshall the leader of the then-dominantCambridge chool )were incurablydefec-tive. A significantextensionof this essay inEnglish appeared the next year in theEconomic Journal (Sraffa 1926) and wasextremely nfluential.Sraffa also had deep political interestsand commitments, was active in theSocialist Students' Group, and joined theeditorial team of L'OrdineNuovo, a leftistjournal founded and edited by AntonioGramsci n 1919 (it would later be bannedby the fascist government).Indeed, by thetime Sraffamoved to Britain n 1927, he hadbecome a substantial igure among Italianleftist intellectuals,and was close to-butnot a member of-the Italian CommunistParty, oundedin 1921 andled by Gramsci.While Sraffa had obtained the position oflecturer at the University of Perugia in1923, and a professorship in Cagliari inSardinia n 1926, he considered a move toBritain, as fascist persecution becamestronger n Italy.Already in 1922, Piero Sraffa's father,Angelo, who was the Rector of BucconiUniversity,hadreceivedtwo telegrams romMussolini, demanding that Piero shouldretracta critical account of Italianfinancialpolicieshe hadpublished n the ManchesterGuardian(as it happens,on John MaynardKeynes's nvitation).It was spreadingmis-trust andwas anact of true and real sabo-tage, Mussolinicomplained.Angelo Sraffa,a courageousand resoluteacademic,repliedthatthe articlestatedonly known acts andthere wasnothing n particularo be retract-ed. Piero Sraffa had several other alterca-tions with the Italian government in theyearsfollowing,andwarmed o an invitationconveyed in a letter from John MaynardKeynes n January 927 to take up a lecture-shipin Cambridge.He movedto Cambridgein September that year. By the timeWittgenstein returned to Cambridge inJanuary 929, Sraffahadalreadyestablished6 See Samuelson (1987, 2000a,b). See also Frank Hahn(1982).


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1242 Journalof Economic Literature,Vol. XLI (December2003)a legendaryreputationn Cambridgeas oneof the cleverest ntellectualsaround.The influence that Sraffa had onWittgenstein's thinking came through aseries of regularconversationsbetween thetwo.7 What form did the influence take? Itconcerneda changein Wittgenstein's hilo-sophical approach in the years following1929-a change n which conversationswithSraffaevidentlyplayeda pivotalrole. In hisearly work (particularly n the TractatusLogico-Philosophicus),Wittgensteinused anapproach hat is sometimes called the pic-ture theory of meaning, which sees a sen-tence as representinga state of affairsbybeing a kindof a pictureof it, mirroringhestructure of the state of affairs t portrays.Thereis aninsistencehere-it can be said atthe risk of some oversimplification-thatapropositionand what it describes must havethe same logical form. Sraffa found thisphilosophicalpositionto be altogethererro-neous, andarguedwith Wittgensteinon theneed forhim to rethinkhis position.Accordingto a famous anecdote, Sraffarespondedto Wittgenstein's laimby brush-ing his chin with his fingertips, which isapparently readily understood as aNeapolitan gesture of skepticism,and thenasked, What s the logical form of this?Sraffa(whom,later on, I had the privilegeof knowingwell-first as a student and thenas a colleague-at Trinity College,Cambridge)nsisted that this account, f notentirelyapocryphal Ican'tremembersucha specific occasion ),wasmoreof a talewitha moral han anactualevent ( I arguedwithWittgensteinso often and so much thatmyfingertips did not need to do much talk-ing ). But the story does illustrate graphi-callythe natureof Sraffa'skepticismof thephilosophyoutlinedin the Tractatus, ndinparticular how social conventions could

contribute o the meaningof our utterancesand gestures.The conversations hat Wittgensteinhadwith Sraffawere evidentlyquite momentousfor Wittgenstein.He would later describetoHenrik von Wright, the distinguishedFinnish philosopher, that these conversa-tions made him feel likea tree from whichall branches have been cut. It is conven-tional to divideWittgenstein'sworkbetweenthe early Wittgenstein and the laterWittgenstein, nd the year1929 wasclearlythe dividing ine separating he two phases.Sraffawas not, in fact, the only critic withwhom Wittgenstein had to reckon. FrankRamsey, he youthful mathematical rodigyin Cambridge, was another. Wittgenstein(1953, p. xe) thanked Ramsey,but recordedthat he was evenmore ndebtedto the crit-icism that a eacherof this university,Mr.P.Sraffa, or manyyears unceasinglypractisedon my thoughts, dding hathe was indebt-ed to this stimulusfor the most consequen-tial ideas of this book.Wittgensteintold a friend (Rush Rhees,another Cambridge philosopher) that themost important hing that Sraffa aughthimwas an anthropologicalway of seeingphilosophical problems. In his insightfulanalysis f the influenceof SraffaandFreud,Brian McGuinness (1982) discusses theimpact on Wittgensteinof the ethnologicalor anthropologicalway of lookingat thingsthat cameto himfromthe economistSraffa(pp. 36-39). While the Tractatus ries to seelanguage n isolation rom the socialcircum-stances n whichit is used, the PhilosophicalInvestigations emphasizes the conventionsand rules thatgive the utterancesparticularmeaning.The connectionof this perspectivewith what came to be known as ordinarylanguagephilosophy s easy to see.The skepticismthat is conveyed by theNeapolitanbrushingof chin with fingertips(evenwhen done by aTuscanboyfromPisa,born in Turin)can be interpreted only intermsof established ulesand conventions-

7On this see Brian McGuinness (1982); Ray Monk(1991); Paolo Albani (1998); and John Davis (2002), amongother writings.


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Sen:Sraffa,Wittgenstein,and Gramwci 1243indeed the stream of life -in theNeapolitanworld.Wittgenstein 1953, p. 5e)used the expression language-game oillustratehow people learn the use of lan-guage and the meaningof words and ges-tures (even though,ultimately,hereis muchmore in any actuallanguagethan what canbe seen as just language-games).

We canalsothinkof the wholeprocessof usingword ... as one of those games by means ofwhich children earn heirnative anguage. willcall these games languagegames and willsometimes speak of a primitive anguageas alanguagegame.

3. Reservation ndRiftWas Sraffa hrilledby the impactthat hisideas had on, arguably,he leading philoso-pher of our times ( theGod whom Keynesmet on the 5:15 train)?Also,how did Sraffaarriveat those momentous deas in the firstplace? I asked Sraffa hose questions morethan once in the regularafternoonwalks Ihad the opportunity to share with himbetween 1958 and 1963. I got somewhatpuzzlinganswers.No, he was not particu-larlythrilled,since the point he was makingwas ratherobvious. No, he did not knowprecisely how he arrived at those argu-ments, since-again-the point he wasmakingwas rather bvious.Sraffawas very fond of Wittgensteinandadmiredhim greatly.8But it was clear thathe was not convincedof the fruitfulnessof

conversing ceaselessly with the genius

philosopher. When I arrivedin Trinityin theearly fifties as a student, shortly afterWittgenstein's death, I was aware that therehad been something of a rift between thetwo. In response to my questions, Sraffa wasmost reluctant to go into what actually hap-pened. I had to stop our regular conversa-tions-I was somewhat bored, was theclosest to an account I ever obtained. Theevents were described, however, by RayMonk (1991), in rather greater detail, in hisbiography of Wittgenstein (p. 487):

In May 1946 Piero Sraffa decided he no longerwished to have conversations with Wittgenstein,saying that he could no longer give his time andattention to the matters Wittgenstein wished todiscuss. This came as a great blow toWittgenstein. He pleaded with Sraffa to contin-ue their weekly conversations, even if it meantstaying away from philosophical subjects. I willtalk about anything, he told him. Yes, Sraffareplied, but in your way.There are many puzzling things in the

Sraffa-Wittgenstein relations. How couldSraffa, who loved dialogues and arguments,become so reluctant to talk with one of thefinest minds of the twentieth century? Eveninitially, how could the conversations thatwere clearly so consequential forWittgenstein, which made him feel like atree from which all branches have been cut,seem rather obvious to this economistfrom Tuscany? I doubt that we shall ever besure of knowing the answers to these ques-tions. As far as the later rift is concerned,Sraffa might have been put off byWittgenstein's domineering manners (carica-tured in a poem of a student, Julian Bell, theson of Clive Bell: who, on any issue, eversaw/ Ludwig refrain from laying down thelaw?/ In every company he shouts us down,/And stops our sentence stuttering his own ).

Sraffa might have also been exasperatedby Wittgenstein's political naivete. Sraffahad to restrain Wittgenstein-with hisJewish background and his constitutive out-spokenness-from going to Vienna in 1938,

8Wittgensteinnot only admired Sraffa,but also reliedon Sraffa for the safekeeping of some of his philosophicalpapers. Sraffa wrote to von Wright, on August 27, 1958(copy of letter in Sraffa'shandwriting n the Wren Libraryof TrinityCollege):On comparing my copy of the Blue Book [ofWittgenstein] with the recently published edition[Wittgenstein1958] I find that it containsa numberofsmall corrections n Wittgenstein'shandwritingwhichhave not been taken into account in the printed ver-sion.I suppose hat he madethese correctionswhen hegave me the book which was shortlyafterthe death ofSkinner in 1941], to whom it had originally elonged.


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1244 Journal of Economic Literature, Vol. XLI (December 2003)just as Hitler was holding his triumphantprocession through the city. Also, eventhough both had left-wing political convic-tions, Sraffa (as a seasoned political realist)could see little merit in the odd eccentrici-ties of Wittgenstein's social beliefs, whichcombined a romantic longing for the ardu-ous life of a hard-working manual laborerwith the hope that the communist revolu-tion would lead to a rejection of the adora-tion of science, which Wittgenstein saw as acorrupting influence on contemporary life.There remains, however, the question ofwhy Sraffa was so reserved about the depthand novelty of his conversations withWittgenstein even at the beginning (in 1929and soon thereafter), and why the ideas thatso influenced Wittgenstein would haveseemed to Sraffa to be rather straight-forward. Sraffa himself did not publish any-thing whatsoever on this subject, but there isconsiderable evidence that what appeared toWittgenstein as new wisdom was a commonsubject of discussion in the intellectual circlein Italy to which Sraffa and Gramsci bothbelonged. That issue I take up next.

4. The Gramsci ConnectionAntonio Gramsci was less reticent thanSraffa about writing down his philosophicalideas. When John MaynardKeynes wrote toSraffa in January 1927 communicating the

willingness of Cambridge University to offerhim a lecturing position, Gramsci had justbeen arrested (on November 8, 1926, to beprecise). After some harrowing experiencesof imprisonment, not least in Milan, Gramscifaced a trial, along with a number of otherpolitical prisoners, in Rome in the summerof 1928. Gramsci received a sentence oftwenty years in gaol ( for twenty years wemust stop this brain from functioning, saidthe public prosecutor in a statement thatachieved some fame of its own), and wassent to a prison in Turi, about twenty milesfrom Bari. From February 1929 Gramsciwas engaged in writing essays and notes that

would later be famous as his PrisonNotebooks (Gramsci 1971, 1975).These notes give us considerable under-standing of what Gramsci and his circlewere interested in. Sraffa was very keen thatGramsci should write down his thoughts,and to help him, Sraffa opened an unlimit-ed account with a Milan bookshop (Sperlingand Kupfer) in the name of Gramsci, to besettled by Sraffa. As was mentioned earlier,Sraffa was a part of the editorial team, ledby Gramsci, of L'Ordine Nuovo. Sraffajoined the team in 1921, but he had knownGramsci from earlier on, and was writingfor L'Ordine Nuovo from 1919 onwards(mainly translating works from English,French, and German). Working together onthis distinguished journal had broughtSraffa and Gramsci even closer togetherthan they already had been, and they hadintense discussions over the years.9 Eventhough they disagreed from time to time,for example in 1924 when Sraffa criticizedthe party line (the Communist Party makesa terrible mistake when it gives the impres-sion it is sabotaging an alliance of opposi-tion movements ), there can be no doubtabout the intensely productive nature oftheir interactions.

Since the Prison Notebooks were, in manyways, a continuation of Gramsci's long-standing intellectual pursuits and reflectedthe kind of ideas that the circle of friendswere involved in, it is useful to see howGramsci's notes relate to the subject matterof Sraffa's conversations with Wittgenstein,including the part played by rules and con-ventions and the reach of what became

9On the friendship between Gramsci and Sraffa, seeNerio Naldi (2000). Their intellectual nteractions nvolveda great varietyof subjects, and John Davis (1993, 2002) hasilluminatingly nvestigated he impact of Gramsciannotionsof hegemony, caesarism nd praxis n Sraffa'shink-ing, and how these ideas may have, through Sraffa, nflu-enced Wittgenstein. These possible connections are morecomplicated than the interactionsconsideredin this essay,which are concerned with the most elementary issues ofmeaning and communicationwhich lie at the foundationofmainstreamphilosophy.


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Sen:Sraffa,Wittgenstein,and Gramsci 1245knownas ordinaryanguagephilosophy. nan essay on the study of philosophyGramscidiscusses some preliminary ointsof reference, which includethe bold claimthat it s essential o destroy hewidespreadprejudice that philosophy s a strange anddifficultthing just because it is the specificintellectual activityof a particular ategoryof specialistsor of professionaland system-atic philosophers. Rather,argued Gramsci,it must first be shown that all men are'philosophers,'y defining he limitsandchar-acteristicsof the 'spontaneousphilosophy'which s proper o everybody.What kind of an object, then, is thisspontaneousphilosophy ?The first itemthat Gramsci ists under this heading s lan-guage itself, which is a totality of deter-mined notionsand concepts and not just ofwords grammaticallydevoid of content.The role of conventionsand rules, includingwhat Wittgenstein came to call language-games, andthe relevanceof what has beencalled the anthropological way whichSraffa hampioned o Wittgenstein,all seemto figure quite prominentlyin the PrisonNotebooks Gramsci1975, p. 324):

In acquiring one's conception of the world onealways belongs to a particular grouping which isthat of all the social elements which share thesame mode of thinking and acting. We are allconformists of some conformism or other,always man-in-the-mass or collective man.The role of linguisticconventionwas dis-cussedby Gramsciwith various llustrations.Here is one example(Gramsci1975, p. 447):One can also recall the example contained in alittle book by Bertrand Russell [The Problems ofPhilosophy]. Russell says approximately this:

Wecannot, without the existence of man on theearth, think of the existence of London orEdinburgh, but we can think of the existence oftwo points in space, one to the North and one tothe South, where London and Edinburgh noware. ... East and West are arbitrary and con-ventional, that is, historical constructions, sinceoutside of real history every point on the earth isEast and West at the same time. This can be

seen more clearly from the fact that these termshave crystallized not from the point of view of ahypothetical melancholic man in general butfrom the point of view of the European culturedclasses who, as a result of their world-wide hege-mony, have caused them to be accepted every-where. Japan is the Far East not only for Europebut also perhaps for the American fromCalifornia and even for the Japanese himself,who, through English political culture, may thencall Egypt the Near East.How exactly Sraffa's ideas linked with

Gramsci's, and how they influenced eachother, are subjects for further research.10Butit is plausible to argue that, in one way oranother, Sraffa was quite familiar with thethemes that engaged Gramsci in the twentiesand earlythirties. It is not very hard to under-stand why the program of Wittgenstein'sTractatus would have seemed deeply mis-guided to Sraffa,coming from the intellectualcircle to which he belonged. Nor is it difficultto see why the fruitfulness of the anthropo-logical way -novel and momentous as it wasto Wittgenstein-would have appeared toSraffa to be not altogether unobvious.

5. Capital Valuation and SocialCommunicationWhat bearing do these philosophical ideas(including the so-called anthropological10 I should, however, point briefly at two issues onwhich the correspondence-or dissonance-betweenGramsci'sand Sraffa's deas deserve much further investi-gation. The first concerns what Saul Kripke (1982) callsthe Wittgensteinian paradox, iting Wittgenstein's claimthat no course of action could be determined by a rule,because every course of action can be made to accord withthe rule. Since the later Wittgenstein s so focused onrelating meaning and communication to following rules,Kripke identifies this paradox s perhaps the centralproblem of [Wittgenstein's]Philosophical Investigations(p. 7). The second issue concerns how far one shouldstretch the anthropologicalway of seeing philosophicalissues, in particular whether custom has to be invokedonly to understand how language is used, or also to go asfar as David Hume did when he argued, in a passage quot-ed approvingly by Keynes and Sraffa (1938), that theguide of life was not reason butcustom (p. xxx).Furtherdiscussion of these two issues can be found in my longerpaper,cited earlier, Piero Sraffa:A Student'sPerspective,to be published by the Accademia Nazionaledei Lincei.


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1246 Journalof EconomicLiterature,Vol.XLI (December2003)way) discussed by Sraffa, Gramsci, andWittgenstein have on Sraffa's work in eco-nomic theory? In his early work, particularlythe much-acclaimed essay published inItalian in 1925 and in its English variant inthe Economic Journal in 1926, which initial-ly established Sraffa'sreputation, he demon-strated that the tendency in ongoingeconomic theory, led by Alfred Marshall,to interpret market outcomes as havingresulted from pure competition involves aninternal contradiction when there areeconomies of large scale in the production ofindividual firms. Sraffa's analysis led to con-siderable follow-up work about the natureof economies of scale as well as the workingof not fully competitive market forms,beginning with Joan Robinson (1933) andEdward Chamberlin (1933). These earlyeconomic contributions do not appear toturn critically on the kind of philosophicalissues addressed later by Wittgenstein, or bySraffa or Gramsci.

However, in Sraffa'sbook, Production ofCommodities by Means of Commodities:Prelude to a Critique of Economic Theory(Sraffa 1960), the interpretational issuesare centrally important. Let me try to illus-trate this with two issues discussed in thiselegant book. The first of these two con-cerns the aggregation of capital and theidea of capital as a factor of production.Mainstream economic theory, often calledneoclassical economics, can be formulat-ed at different levels of aggregation. Capitalgoods such as machinery and equipmentare, of course, quite diverse, and anyaggregative account that invokes capitalas a general factor of production mustinvolve some aggregative modellingwhich is comprehensible and discussable insocial communication. Also, there is amuch-discussed claim that it is the produc-tivity of incremental capital (called the

marginal product of capital ) that can beseen as governing the value of the rateof return on capital (such as the rate ofinterest or profit).

Sraffa'scritique disputes these claims. Heshows that capital as a surrogate factor ofproduction cannot be defined, in general,independently of the rate of interest, andthe so-called marginal productivity of capi-tal can hardly be seen as governing theinterest rate. Indeed, techniques of produc-tion cannot even be ranked in terms ofbeing more or less capital intensive, sincetheir capital intensities, which are depend-ent on the interest rate, can repeatedlyreverse their relative ranking as the interestrate is lowered.11This is a powerful technical result. We canask: what difference does it make?Aggregative neoclassical models with capitalas a factor of production are irreparablydamaged. But neoclassical economic theoryneed not be expounded in an aggregativeform. It is possible to see production interms of distinct capital goods and leave it atthat. Also, the kind of practical insight forpolicy that one may tryto get from arguinginaggregative terms (such as the case for usingless capital-intensive techniques when laboris cheap and the cost of capital is high) is nei-ther dependent on how interest rates areactually determined, nor conditional on anyvery specific model of capital valuation.12Yet, at the level of pure theory, the ideathat interest is the reward of the productiv-ity of capital rather than, say, the result ofexploiting labor (or simply the passiveresidual that is left over between the outputvalue and input costs, including wage pay-ments) can play-and has often been madeto play-quite a major part in political and

There have been substantial controversies on theexact significance and reach of these and related results;see, among others, Robinson (1953-54); Robert Solow(1955-56); Garegnani (1960, 1970, 1990); Samuelson(1962, 1966); Pasinetti (1966, 1974); Harcourt (1972);Dobb (1973); ChristopherBliss (1975); Steedman (1977,1988);Edwin Burmeister(1980); VivianWalshand HarveyGram (1980); Bharadwaj 1990); Bharadwajand Schefold(1990); Mauro Baranzini and Geoffrey Harcourt (1993);Cozzi and Marchionatti (2000);, Kurz (1990); and AviCohen and Geoffrey Harcourt (2002).12 Discussed in Sen (1974), reprinted in Sen (1984).


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Sen:Sraffa,Wittgenstein,and Gramsci 1247social debates aboutthe natureof the capi-talist system. Thus, the political and socialcontext of Sraffa'sdemolitionalcritique ofcapitalas a factor of production s not hardto see once the subject matter of the cri-tique is fully seized and interpreted n linewith a classical debate stretching over sev-eral centuries. Sraffa's indings have to beseen as a response to a particulardescrip-tive account-with normative relevance-of the capitalist system of production, andthat is where the potential socialrelevanceof these technical results lies.I must confess that I find it altogetherdifficult to be convinced that one's skepti-cism of unrestrainedcapitalism must turnon such matters as the usefulnessof aggre-gate capital as a factor of production andthe productivityattributed o it, rather hanon the mean streets and strained ives thatcapitalism can generate, unless it isrestrained and supplemented by other-often nonmarket-institutions. And yet itis not hard to see the broad social andpolitical vision of Sraffa'sanalysis and itsargumentative relevance for debatesabout takingthe productivityof capital asexplicationof profits.6. Pricesand TwoSensesof Determination

I turn now to a second example. Sraffaconsidersan economyin equilibrium o theextentof havingauniformprofit(orinterest)rate.He showsthatif we take a snapshotofthe economywith a comprehensivedescrip-tion of all production activities, withobserved inputs and outputs, and a giveninterest rate, from this information lone wecan determine(in the sense of figuringout)the pricesof all the commoditiesas well asdistributionof income between wages andinterest (or profit).13 And, if we consider ahigher and higher interest-or profit-rate,

then the wage ratewill be consistently owerand lower. We can, thus, get a downward-sloping wage-profit relationship an almosttranquilportrayal f a stationary classwar ),for that given productionsituation,and thespecificationof either the interest (or profit)rateor the wage ratewill allow us to calcu-late all the commodityprices.The dog that does not bark at all in thisexerciseis the demand side: we go directlyfrom production information to prices.There is no need, in this mathematical xer-cise, to invoke he demandconditions or thedifferent commodities,which are, for thisparticularanalytical xercise, redundant.Ininterpreting his very neat result, the philo-sophical oundationof meaningandcommu-nication comes fully into its own. It isextremely important o understandwhat ismeantby determination n the mathemat-ical context (or,to put it in the anthropolog-ical way, how it would be understood n amathematical ommunity),and we must notconfound the different senses in which theterm could be used. Therehasbeen a strongtemptationon the partof the criticsof main-streameconomictheoryto take Sraffa's cri-tique as showing the redundancy ofdemand conditions n the causal determina-tion of prices, thereby undermining thattheorysince it makesso much of demandsandutilities. Robinson 1961)is not the onlycommentator to display some fascinationtowards aking hatroute(p. 57):

...when we areprovidedwith a set of technicalequationsfor productionand a real wage ratewhich s uniform hroughouthe economy, hereis no room for demand equations n the deter-minationof equilibriumprices.

However, since the entire calculation isdone for a given and observed picture ofproduction (with inputs and outputs allfixed, as in a snapshotof production oper-ations in the economy), the question as towhat would happen if demand conditionschange-which could of course lead to

13 The result holds in this simple form in the case inwhich there is no joint production, the presence of whichwould make the relationship more complex but not in factuntractable. See Bertram Schefold (1989).


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1248 Journalof EconomicLiterature,Vol.XLI (December2003)different amounts of production-is not atall addressed in this exercise.14 The ten-dency to interpret mathematical determi-nation as causal determination can, thus,cause a majormisunderstanding.'5

7. Valueand Descriptive mportanceIf Sraffa'sresults do not have anythingmuch to say on causal determination, henwhat gives them interest? That questioncan be answeredby consideringthe natureof social communication to which Sraffa'swork contributes. First, analyticaldetermi-nation-not only causal determination-is

a subject that interests people a good deal.Sraffa'sdemonstration hat a snapshotpic-ture of just the productionconditionsof theeconomycan tell us so much aboutpossibleprices is not only a remarkableanalyticaldiagnosis, t is alsoa findingof considerableintellectual interest to people who want tothink about the correspondence betweenquantities produced and prices charged.Gramsci has argued that everyone is a

philosopherat some level, and perhaps anexactly similarthing can be said about thefact that analytical-and even mathemati-cal-curiosity is widespread, and influ-ences our socialthinking.The idea thatit ispossible to find out what the commodityprices are merely by looking at the givenproduction side (inputs and outputs),along with the interest rate, is a powerfulanalyticalresult.A second reason for being interested inSraffa'sresults is to understand them interms of the idea of value and the politicalcontentof that concept.In classical hought,value asbeen seen not merelyas a way ofgettingat prices (Smith, Ricardo,and Marxall discussedproblems n goingfromvaluesto prices), but also at making a descriptivestatement of some social importance. Tomanyeconomists he idea of value ppearsto be thoroughlywrongheaded.For exam-ple, Robinson invoked positivist method-ology (she could be describedas a left-wingPopperian )o dismissanyrealrelevanceofthe idea of valuein generalandits invokingin Marxian conomics in particular. n herEconomicPhilosophy,Robinson (1964) puther denunciation hus (p. 39):

On hisplanehewholeargumentppearso bemetaphysical;t provides typical xample fthewaymetaphysicaldeasoperate.Logicallytis a mere igmarolef words, ut orMarxt wasa flood of illumination nd for latter-dayMarxists,source f inspiration.16

Value ill not help, Robinsonconclud-ed. It has no operationalcontent. It is justa word.The philosophical issues raised byGramsci and Sraffa, and of course byWittgenstein,have considerablebearingonthis question. Just as positivist method-ology pronounces some statements mean-ingless when they do not fit the narrowsense of meaning n the limited terms of

14 I have discussed the distinctions involved in Sen(1978). See also Salvadori(2000) for a textual analysisofwhat Sraffa does-and does not-claim regarding therole of demand. Given the nature of Sraffa's exercise(with given commodity production), it is also clear whySraffa (1960, preface) claims-rightly-that there is nospecific assumption of constant returns to scale thatneeds to be invoked for his analysis. The internal charac-teristics of the observed snapshot picture may, of course,themselves reflect particular market relations (and evensome underlying equilibriation), especially for theobserved uniform profit rate and universal wage rate tohave come about. But Sraffa s undoubtedly rightthat nofurther assumption (for example, of constant returns toscale) need be added to what is already entailed by theobserved snapshot picture (without any counterfactualchanges being considered).15 Sraffa discusses a corresponding distinction in anunpublished note (D3/12/15:2 in the Sraffa collection,Wren Library, Trinity College, italics added) written in1942 (I am very grateful to Heinz Kurz for drawing myattention to it):This paper [the forthcoming book] deals with anextremelyelementaryproblem; so elementary ndeedthat its solution is generally taken for granted. Theproblem is that of ascertaining he conditionsof equi-librium of a system of prices & the rate of profits,independently of the study of theforces which maybringabout such a state of equilibrium. 16 Robinson(1964), p. 39.


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Sen:Sraffa,Wittgenstein,and Gramsci 1249verification or falsification, the Tractatustoo saw little of content in statements thatdid not represent or mirror a state of affairsin the same logical form. This has theimplication, as Simon Blackburn (1994) putit, of denying factual or cognitive meaningto sentences whose function does not fitinto its conception of representation, suchas those concerned with ethics, or mean-ing, or the self' (p. 401). In contrast, thephilosophical approach pursued by thelater Wittgenstein, partly influenced bySraffa himself, sees meaning in muchbroader terms.17The interpretation of value and itsdescriptive relevance have been well dis-cussed by Maurice Dobb (1937, 1973), theMarxisteconomist, who was a close friend ofSraffaand his long-term collaboratorin edit-ing David Ricardo's collected works. Dobbpointed to the social and political interest ina significant description of economic rela-tions between people. Even such notions as

exploitation which have appeared to some(including Robinson) as metaphysical, canbe seen to be an attempt to reflect, in com-municative language, a common public con-cern about social asymmetries in economicrelations. As Dobb (1973) put it (p. 45):

exploitation s neither something metaphysicalnor simply an ethical udgement (still less justa noise ) as has sometimes been depicted: it is afactual description of a socio-economic relation-ship, as much as is Marc Bloch's apt characteri-sation of Feudalism as a system where feudallords lived on labor of other men.Sraffa's analysis of production relationsand the coherence between costs and prices

(within a snapshotpicture of the economy),while different from a labor-baseddescrip-tion in the Marxian mould, is also anattempt to express social relations with afocus on the production ide, rather han onutility and mental conditions. We candebate how profound that perspective is,but it is importantto see that the subjectmatter of Sraffa'sanalysis is enlighteningdescriptionof prices and income distribu-tion, invokingonly the interrelationson theproductionside.Closelyrelated o this perspective, here isa further ssue which involvesaddressingheclassicaldichotomybetween use-value ndexchange-value, s it was formulated bythe founders of modem economics, in par-ticular Adam Smith and David Ricardo.Sraffa and Dobb, who collaborated n theeditingof Ricardo'sollectedworks,hadsig-nificant interest in this question,18and tothatissue, I nowturn.

8. Use, Exchangeand CounterfactualsDavid Ricardo'soundational ook,OnthePrinciples of Political Economy andTaxation, ublished n 1817, beginswith thefollowingopening passage:It has been observed by Adam Smith, that theword Value has two different meanings, andsometimesexpresses he utilityof some particu-lar object, and sometimes he power of purchas-ing other goods which the possession of thatobject conveys.The one maybe calledvalue nuse; the other value in exchange. Thethings,he continues, whichhavethe greatestvalueinuse, have frequently little or no value inexchange; nd on the contrary,hose whichhavethe greatestvalue in exchange,have little or novalue n use. Waterand airareabundantly se-ful; they are indeed indispensable o existence,yet, underordinary ircumstances, othingcanbe obtained n exchange or them. Gold,on thecontrary, houghof little use comparedwith airor water,will exchangefor a great quantityofothergoods.

17 There is a related issue in epistemology as to theextent of precision that would be needed for a putative sci-entific claim to be accepted as appropriate.For this issuetoo, the nature of Sraffa'sanalysishas a direct bearing, inline with Aristotle'sclaim, in the NicomacheanEthics, thatwe have to ook forprecisionin each classof things just sofar as the nature of the subject admits. On this issue, seeSen (1982), essay20 ( Descriptionas Choice ), andCoates(1996), along with the references cited there. I shall not,however, pursue this question furtherhere.18 See particularlyRicardo(1951-73), edited by Sraffawith the collaborationof Dobb, and Dobb (1973).


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1250 Journalof EconomicLiterature,Vol. XLI (December2003)There is a puzzle here that is of someinterest of its own, and can also tell ussomething about how we may think aboutprices and values in general. There are two

alternative ways of perspicuously explain-ing how gold can come to command ahigher price than water, despite being somuch less important for human life. Oneanswer, based on the utility side of the pic-ture, is that given the large amount ofwater that is generally available and theshortage of gold, the so-called marginalutility of water (the incremental benefitthat a consumer gets from an additionalunit of water) is small, compared with themarginal utility of gold. The other answer isthat the cost of production-or of min-ing-of gold is much higher than that ofwater, in the situation in which we examinethe economy.Neither explanationis an attempt at causal-ly explaining why and how the prices andquantities that exist have actually emerged.They are, rather, answers to the Smith-Ricardo question: How can people under-stand why gold though of little usecompared with air or water exchanges foragreat quantity of other goods ? The cost-based explanationand the utility-based expla-nation are, thus, alternative ways ofexplicating what we observe, by invokingideas like costs of production and marginalusefulness, which can serve as means of socialcommunication and public comprehension.While Sraffa himself did not publishmuch that relates directly to this interpre-tational question (except to comment on adistinction involving the use of counter-factual concepts, on which more present-ly), we can get some insight into the issuesinvolved from the writings of MauriceDobb, Sraffa's friend, collaborator andexponent. Indeed, in a classic paper onthe requirements of a theory of value,included in his book, Political Economyand Capitalism, Dobb (1937) had arguedthat a theory of value must not be seen

only as a mechanical device that has mere-ly instrumentaluse in price theory. Evenastheories of value address the Smith-Ricardo question regarding a coherentunderstanding of the dual structure ofvalue in use and value in exchange, theyattempt to make important social state-ments of their own on the nature of theeconomic world by focusing respectivelyon such matters as the incremental useful-ness of commodities, the satisfactiontheycan generate,the labor that is used in mak-ing them, or the costs that have to beincurred in their production.The inclination of classical politicalecon-omy, includingclassical Marxian co-nomics, to expect from a theory of valuesomething much more than a purelymechanical intermediate product inprice theory is, of course, well-known.Indeed, this inclination s often takento bespecial pleading, for largely political rea-sons, in a contrivedjustification of the rel-evance of labor theory of value. However,this diagnosisdoes the classicalperspectiveless than justice, since the importance ofperspicaciousexplanationand communica-tion is part and parcel of the classicalapproach.Indeed, it is importantto recol-lect, in this context, the significance thathas typicallybeen attached, n the perspec-tives of classical political economy andMarxianeconomics, not just to labor andproduction, but also to the idea of usevalue (and to its successorconcept in theform of satisfaction-or utility -thatcommoditiesmaygenerate). The compari-son between the two rivalvalue theories inthe form of labor theory and utility theorywas taken to be of interest preciselybecause both made socially engagingstate-ments;there is no attempthere to denythenature of social interest in utilitytheoryasa theoryof value.Indeed, in 1929, in a prescientearlycri-tique of what would later develop into the

revealed preference approach (led by


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Sen:Sraffa,Wittgenstein,and Gramsci 1251Samuelson 1938), Dobb (1929) regrettedthe tendency of modern economics to down-play the psychological aspects of utility infavor of just choice behavior (p. 32):

Actually the whole tendency of modern theory isto abandon ... psychological conceptions: tomake utility and disutility coincident withobserved offers on the market; to abandon a

theory of value in pursuit of a theory ofprice. But that is to surrender, not to solve theproblem.'9

Indeed, the problem to which Dobbrefers, and to which utility theory of value,like the labor theory, caters, is to make animportant qualitative statement about thenature of the economic problem (Dobb1937, pp. 21-22). Dobb went on to distin-guish between these two social explanationsby noting that the qualitative statement[utility theory] made was of a quite differentorder, being concerned not with the rela-tions of production, but with the relationof commodities to the psychology of con-sumers (p. 21). In contrast, the picture ofthe economy presented by Sraffa concen-trates precisely on the relations of pro-duction, and in explicating Sraffa'scontributions, Dobb (1973) pursues exactlythis contrast.

There is much evidence that this contrastwas of particular interest to Sraffa himself.But in this comparison, Sraffa saw anotherbig difference which was methodologicallyimportant for him (though I know of littleevidence that it interested Dobb much),given Sraffa'sphilosophical suspicion of theinvoking of counterfactual magnitudes infactual descriptions. Sraffa noted that in

opting for a cost-basedexplanation in linewith Sraffa 1960), we can rely entirely onobserved acts, such as inputs and outputsand a given interest rate,withouthavingtoinvoke any counterfactuals that is, with-out having to presume what would havehappenedhad things been different).20Thisis not the case with the utility-basedexpla-nation, since marginalutility nescapablyinvolves counterfactualreasoning, since itreflects how much extra utility one wouldhave if one had one more unit of thecommodity.The philosophicalstatusof counterfactu-als has been the subject of considerabledebatingin epistemology.I see little meritin trying o exclude counterfactualsn tryingto understand he world.21But I do know-from extensive conversationswith Sraffa-that he did find that the use ofcounterfactuals involved difficulties thatpurely observational ropositionsdid not. Itis not that he never used counterfactualconcepts (life would have been unbearablewithsuch abstinence)but he did think therewas a big methodological divide here.Whether or not one agrees with Sraffa'sjudgement on the unreliabilityof counter-factuals, t is indeed remarkable hat thereissuch a methodological ontrastbetween theutility-basedand cost-based stories (in theSraffian form). The difference betweenthemlies not merelyin the fact that the for-mer focuses on mental conditions in theformof utilitywhile the latterconcentrateson materialconditionsof production acon-trastthat is easily seen and has been muchdiscussed), but also in the less-recognizeddistinction that the former has to invokecounterfactuals,whereas the latter-in theSraffian ormulation-has no such need.19Dobb (1929), p. 32. It is also of interest to note thatin a letter to R. P. Dutt, another Marxist ntellectual, Dobbwrote on May 20, 1925 (as it happens, shortly after his firstmeeting with Piero Sraffa): thetheory of marginalutilityseems to me to be perfectly sound, & as explanationofprices & price changes quite a helpful advance on the clas-sical doctrine, framingit more precisely & forginga more

exact tool of analysis. On this see Pollit (1990).

20 See Sraffa (1960), pp. v-vi.21 Indeed, the reach of economics as a discipline wouldbe incredibly imited had all counterfactualreasoning beendisallowed, as I have tried to discussin Sen (2002);see alsoSen (1982), essay 20 ( Description as Choice ), pp.432-49.


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1252 journal of Economic Literature, Vol. XLI (December2003)9. Concluding Remarks

The critical role of Piero Sraffa in con-tributing to profound directional changes incontemporary philosophy, through helpingto persuade Wittgenstein to move from theTractatus to the theory that later foundexpression in Philosophical Investigations, isplentifully acknowledged by Wittgensteinhimself (as well as by his biographers). Whatmay, however, appear puzzling is the factthat Sraffa remained rather unexcited aboutthe momentous nature of this influence andthe novelty of the ideas underlying it.However, the sharpness of the puzzle is, to agreat extent, lessened by the recognitionthat these issues had been a part of the stan-dard discussions in the intellectual circle inItaly to which Sraffa belonged, which alsoincluded Gramsci.As a result, the weakness of Wittgenstein'sview of meaning and language in Tractatuswould have come as no surprise to Sraffa,nor the need to invoke considerations thatlater came to be known as the anthropolog-ical way of understanding meaning and theuse of language. There appears to be an evi-dent Gramsciconnection in the shift fromthe early Wittgenstein to the laterWittgenstein, though much more researchwould be needed to separate out, if that ispossible at all, the respective contributionsof Sraffa and Gramsci to the ideas thatemerged in their common intellectual circle.Turning to Sraffa's economic contribu-tions, they cannot, in general, be divorcedfrom his philosophical understanding.After his early writings on the theory of thefirm (and his demonstration of the need toconsider competition in imperfect ormonopolistic circumstances), his laterwork did not take the form of finding dif-ferent answers to the standard questions inmainstream economics, but that of alter-ing-and in some ways broadening-thenature of the inquiries in which main-stream economics was engaged. I have

argued in this essay that it is possible tointerpret Sraffa's departures in terms ofthe communicational role of economictheory in matters of general descriptiveinterest (rather than seeing them asattempts at constructing an alternativecausal theory of the determination ofprices and distribution).22Sraffa used analytical reasoning to throwlight on subjects of public discussion in polit-ical and social contexts. In particular, hedemonstrated the unviabilityof the view thatprofits can be seen as reflecting the produc-tivity of capital. More constructively, Sraffa'swork throws light on the importance of valuetheory in perspicacious description. Thecontrast between utility-based and cost-based interpretation of prices belongs to theworld of pertinent description and social dis-cussion, and the rival descriptions are ofgeneral interest; these have been invoked inthe past and remain relevant today. Theinquiry into alternative descriptions differsfrom the subject of causal determination ofprices, in which both demand and supplysides would tend to be simultaneouslyinvolved.There is an obvious similarity here withJohn Hicks's (1940, 1981) classic clarifica-tion that while utility and costs are bothneeded in a theory of price determination,when it comes to the valuation of socialincome, utility and costs provide two alter-native ways of interpreting prices, withrespectively different implications on theunderstanding of social or national income.The measurement of social income in real

22 Since Sraffa's (1960) classic book has the subtitlePrelude to a Critique of Economic Theory, there hasbeen some temptation to presume that once the cri-tique -to which that book is a prelude -is completed,Sraffawould have expected it to yield an alternativetheo-ry of prices and distribution. If the argumentspresentedin this essay are correct, this presumption is mistaken.Sraffawas, in this view, trying to broaden the reach andscope of economic inquiries, not just trying to find differ-ent answers to the questions standardly asked in main-stream economic theory.


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Sen: Sraffa,Wittgenstein,and Gramsci 1253terms may mean valuation in terms of utili-ty, or in respect of cost, and that these twomeanings are in principle different (Hicks1981, p. 142).23

In pursuing the descriptive distinctionbetween utility and costs, Sraffa attachedimportance to the demonstration that hisaccount of the cost-based story (as in Sraffa1960) draws exclusively on observedinfor-mation, rather than having to invoke anycounterfactualpresumptions. This differsfrom the utility-based picture, since theconcept of marginal utility is constitutivelycounterfactual. How methodologically sig-nificant this distinction-between descrip-tions with or without counterfactuals-infact is remains an open question (I confessto having remained a skeptic), but it is asubject to which Sraffa himself attachedvery great importance. It also relates toother methodological features of Sraffa'sanalysis, including his strenuous-butentirely correct-insistence that his analysisdoes not need any assumption of constantreturns to scale.24The temptation to see Sraffa's contribu-tion as a causal theory of price determination

(managing,mysteriously,without giving anyrole to demandconditions)must be resisted.Everythinghere turns on the meaning ofdetermination nd the usage of that termon which Sraffadraws.The sense of deter-mination nvoked by Sraffa concerns themathematicaldeterminationof one set offacts from anotherset. Toillustrate he point(with a rather extreme example) a sundialmay allowus to determine what time it isby looking at the shadow of the indicator(gnomon), but it is not the case that theshadow of the indicator causally deter-mines what time it is. The value of a clockdoes not lie in its ability o fix -ratherthantell -the time of day.It would have been very surprising f, inhis economic analysis,PieroSraffawere notinfluencedby hisownphilosophical osition,and had stayed within the rather limitedboundariesof positivistor representationalreasoningcommonly nvokedin contempo-rary mainstreameconomics. In addressingfoundational economic issues of generalsocial and political interest (some of whichhave been discussed over two hundredyears), Sraffa went significantly beyondthose narrowbarriers. t is, I suppose,com-forting to know that there were not manyPiero Sraffas,but one.

23 The extensive reach of the Hicksian contrastbetween the two alternativeperspectives are among thesubjects explored in Sen (1979). In commenting on hisearlier1940paper,Hicks (1981) remarks hat I now thinkthat in my 1940 article I claimed too little for the costmeasure (p. 143). A pioneering exploration of the pro-duction-based, rather than utility-based, evaluation ofnational income can be found in James Mirrlees (1969).Since that evaluation involves investigationof productionpossibilityfor real income comparisons (a quintessentiallycounterfactualexercise), Mirrlees'sanalysisgoes in a verydifferent direction from Sraffa's nvestigationof the inter-nal relations on the cost side, for a given productionsitua-tion. The point of similarity ies only in (1) the fact that acomplete theory of causal determination of prices is notneeded either for evaluationof social income or for usingvalue theory for social description of utility or costs, and(2) the fact that the separationof the cost story fromtheutility storyis involvedin both the exercises.

24 See Sraffa 1960), pp. v-vi. Sraffanotes that when n1928 Lord Keynes read a draft of this paper, he recom-mended that, if constant returns were not to be assumed,an emphatic warningto that effect should be given (p. vi).That emphaticwarning can be found in the preface toSraffa(1960).

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