Some of Samuelson on the Subject of Sraffa

Samuelson in 1966:

”Such an unconventional behavior of the capital/output ratio is seen to be definitely possible. It can perhaps be understood in terms of so-called Wicksell and other effects. But no explanation is needed for that which is definitely possible: it demonstrates itself. Moveover, this phenomenon can be called ‘perverse’ only in the sense that the conventional parables did not prepare us for it….

…Nevertheless we must accept nature as she is. In a general blueprint technology model of Joan Robinson and M.I.T. type, it is quite possible to encounter switch points … in which lower profit rates are associated with lower steady-state capital/output ratios…

…Pasinetti, Morishima, Bruno-Burmeister-Sheshinski, Garegnani merit our gratitude for demonstrating that reswitching is a logical possibility in any technology, indecomposable or decomposable.”

In 1971:

”In this age of Leontief and Sraffa there is no excuse for mystery or partisan polemics in dealing with the purely logical aspects of the problem.”

In 1975:

”…one who believes technology to be more like my 1966 reswitching example than like its orthodox contrast, will have a more sanguine view about how successful militant power by organized labor can be in causing egalitarian shifts in the distribution of income away from property even in the long run.”

In 1976:

”Those who have followed the literature of the past 20 years know that these many properties of the Clarkian paradigm do not all hold generally. In every Cambridge, and wherever informed economic theory is taught, there is no 1976 disagreement on this this.”

In 1987:

”Oscar Lange once wrote, sardonically but seriously, that Ludwig von Mises, the enemy of socialism, deserved a statue in the socialist Hall of Fame for compelling Abba Lerner and Lange (to say nothing of earlier Pareto, Barone and Fred Taylor) to work out how socialists might devise efficient decentralizing-pricing planning algorithms. One can insist, seriously, that a neoclassical Hall of Fame deserves Sraffa’s statue…

…Did any scholar have so great an impact on economic science as Piero Sraffa did in so few writings? One doubts it. And there cannot be many scholars in any field whose greatest works were published in their second half century of life.

Piero Sraffa was much respected and much loved. With each passing year, economists perceive new grounds for admiring his genius.”

In 2001:

”The Nobel Prize of Piero Sraffa and Joan Robinson that Stockholm never awarded might have pleased at least one of them. Its citation would have included: ‘Their investigations uncovered a fatal normative flaw in Bohm-Bawerkian and modern mainstream capital theory’…

…As my exposition will reveal, the fatal flaw in question can exist even when a scalar ‘leets’ is the sole producible input; it can exist even when precise neoclassical marginal products do exist and do serve to pin down unequivocally the distribution of incomes between propertyless workers and affluent capitalists. The statues of Piero and Joan belong in the pantheon of neoclassicism itself…

…this defense does not validate an inverse [interest rate, consumption per person-hour] tradeoff… Adam Smith’s Invisible Hand does ensure Equation (5) above but cares nought for Equation (6). This is why books entitled Economics in One Lesson must evoke from us the advice: ‘Go back for the second lesson’.”

But doubtless tyro economists are taught today all about the contributions of an economist who had an age co-named after him. Apparently these contributions lead to the acceptance that class struggle can affect distribution under neoclassical theory. To the thesis that mainstream capital theory is “fatally flawed”. To an understanding of what capital-reversing and reswitching of techniques are. And to a realization that these phenomenon are compatible with the assumptions of mainstream economics.

• Samuelson, P. A. (1966). “A Summing Up”, Quarterly Journal of Economics, V. 80, N. 4 (Nov): 568-583
• Samuelson, P. A. (1971). “Understanding the Marxian Notion of Exploitation: A Summary of the So-Called Transformation Problem Between Marxian Values and Competitive Prices”, Journal of Economic Literature, V. 9, N. 2 (Jun.): 399-431”
• Samuelson, P. A. (1975). “Steady-State and Transient Relations: A Reply on Reswitching”, Quarterly Journal of Economics, V. 89, N. 1 (Feb.): 40-47
• Samuelson, P. A. (1976). “Interest Rate Determinations and Oversimplifying Parables: A Summing Up” in Essays in Modern Capital Theory (edited by M. Brown, K. Sato, and P. Zambreka), Amsterdam: North-Holland
• Samuelson, P. A. (1987). “Sraffian Economics” in The New Palgrave: A Dictionary of Economics (edited by J. Eatwell, M. Milgate, and P. Newman),London: Macmillan
• Samuelson, P. A. (2001). “A Modern Post-Mortem on Bohm’s Capital Theory: Its Vital Normative Flaw Shared By Pre-Sraffian Mainstream Capital Theory”, Journal of the History of Economic Thought, V. 23, N. 3: 301-317