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1The appellations “classical” and “neoclassical” are hardly registered trademarks, and their usages encompass a great diversity of meanings. For the advocates of Classical political economy—it seems fair, after all, to afford them a certain priority—David Ricardo is its figurehead, followed by a handful of other authors: precursors such as Petty, Cantillon or Quesnay; contemporaries such as Torrens and Malthus; and successors such as Bortkiewicz and Dmitriev in the 19th century. This approach is characterized by a theory of prices and the profit rate based on the difficulty of production of commodities rather than on the demand for them, and it thus contrasts with all those that give the central role to supply and demand, notably the theory of general equilibrium.

2The latter, developed principally by Walras, has in modern times found its most elaborated form in the work of Gerard Debreu and Kenneth Arrow, and has thus been renewed; in a similar manner, Classical economics has found its most rigorous expression in the writings of Piero Sraffa. The publication in 1960 of his Production of Commodities by Means of Commodities was the starting point for a revival of the Classical approach. More than fifty years later, it is worth asking ourselves what this “Second Classical school” has taught us: What have we learnt on (and from) Classical economics since Sraffa?

3The answers proposed in this issue of Cahiers d’économie politique / Papers in Political Economy[1] can be divided along three main lines. Firstly, what we have learnt on Classical economics since Sraffa is its logical structure and its general method, as well as the tendencies driving it. The contributions from Enrico Bellino, from Heinz Kurz & Neri Salvadori, as well as from Luigi Pasinetti & Nadia Garbellini deal in particular with these aspects. Secondly, we have also learnt that Classical economics has the capacity to broaden its traditional field of investigation. This is particularly true for renewable resources (addressed by Guido Erreygers), competition (developed by Graham White) and reproduction in disequilibrium (analysed by Carlo Benetti, Christian Bidard, Edith Klimovsky & Antoine Rebeyrol). Finally, some questions remain matters of unresolved debate: this is the case as regards defining the respective roles of physical and social factors in the theory of prices (discussed by Richard Arena) and analysing international relations. Concerning the latter, one might ask whether it is the role of Classical theory to address this issue in the manner of neoclassical theory, or whether a better approach is not instead to bring to the fore their fundamental role in the division of labour (a problem examined by Christophe Depoortère & Joël Thomas Ravix).


4Anyone who takes an interest in modern Classical economic thought will encounter two major authors, Pierangelo Garegnani and Luigi Pasinetti. Though the first continues a line that is directly and almost exclusively descended from Sraffa, the second has adopted an approach which is a priori broader, considering that it encompasses effective demand and long-term structural change. Enrico Bellino shows that these two approaches are in fact complementary, and that they both stem from a common methodological conviction, which is that theoretical investigations operate in two successive modes. The two authors distinguish between a deductive stage, in which the necessary relationships between prices of production and distribution of income are made explicit—what Garegnani calls the “core”—and a more “institutional” stage, where historical circumstances are taken into account in an inductive manner. This could apply just as well to wage bargaining, social conflicts or lifestyles. Luigi Pasinetti has also developed a general model that emphasizes the necessary connections that hold between fundamental variables, while giving weight to the historical evolutions of technique or agents’ preferences. This convergence is made explicit by Bellino in the form of a list of the methodological positions shared by the two major tendencies of the Second Classical approach.

5Heinz Kurz & Neri Salvadori choose to highlight the capacity that Sraffa has given us to truly understand Classical economic thought. The latter had remained little known because of the neoclassical interpretations of Ricardo—due to Marshall and Samuelson, to name only the most prominent authors. This manner of reading the Classicals has remained dominant in the academic world, despite its inadequacy for Ricardo’s texts, and despite the reinterpretation proposed by Sraffa in the introduction to his edition of Ricardo’s Works and Correspondence, as well as Sraffa’s 1960 book. In addition, the authors draw from the “Sraffa papers,” which shed light on the ninety-odd pages of Production of Commodities by Means of Commodities. The notion of surplus, incompatible with marginalist foundations, holds a strategic position. Classical theory is a “science of things”; the accent is placed on physical objectivity, thanks to the notion of real cost, which Sraffa borrowed from Petty. Let us note that, from this point of view, the “Labour theory of value,” long a marker of Classical thought, is instead, for Sraffa, a sign of degeneration.

6Luigi Pasinetti & Nadia Garbellini use Sraffa’s standard system to explore the relationship between Marx’s economics and Classical economic theory. The authors’ discussions are framed around the so-called question of transformation. However, their text goes further than the traditional considerations on this subject; they call for an opening which extends not only beyond Marx, but also beyond Sraffa, by calling into question the causal relationship between wages and profit. Drawing from the work of Luigi Pasinetti in the 1960s, the authors remind us that it is not so much the wage level that is of strategic importance, as the profit rate (something that, in his own way, Sraffa does in fact imply). A normative level of net investment (on which the profit rate depends, the wage being a residue) may then be determined as one that permits a desired growth rate. The notion of sub-systems developed by Sraffa is thus an essential analytical tool. As well as the familiar preoccupations of the Classicals, the model so designed can also incorporate Keynes’s concerns regarding full employment.


7These first contributions provide a general orientation as regards the Classical tradition as it has been reappraised since Sraffa; they permit us to see the theory’s potential to address a diverse range of issues, at a striking level of generality. Other contributions express a desire to explore relatively new domains; they represent the second line of enquiry of this issue of Cahiers d’économie politique.

8Land—as a resource that is not produced, and is available in constant qualities and quantities—is included in Sraffa’s theory of prices and the rate of profit; however, he does not address other natural resources, whether exhaustible or renewable. It is, however, possible to do so within a Classical model, as demonstrated by Guido Erreygers, while at the same time touching upon the results achieved by post-Sraffian theory. The issue of these other natural resources is a very real one today, and it is important that it be addressed from several different viewpoints, not only that of standard theory.

9Having recalled the corn-guano model (where guano is exhaustible), Guido Erreygers proposes a model for the exploitation of a renewable resource, tuna, that can be fished or farmed. When faced with growing demand, there is a double long-term perspective, depending on whether the initial price of wild tuna is very low compared to that of farmed tuna (pessimistic scenario), or whether the price is close though lower (optimistic scenario). In the first case, farming can only be competitive once the natural resource has significantly declined, implying the possible extinction of wild tuna; in the second case, a stable equilibrium guarantees a durable cohabitation between the two methods for obtaining tuna. Possible government interventions are also examined.

10When one considers it from the demanding perspective of modern scholarship, what Classical economics has to say about competition is relatively vague; essentially, in terms of the theory of prices, it amounts to the thesis that market prices gravitate around production prices. The recent literature on this topic is rather abundant, but the results have generally been unable to establish gravitation. Sraffa does not mention this thesis in his work; thus it is fortunate that two contributions—strikingly different— address this issue.

11Graham White explores three questions that all readers of Sraffa are likely to ask themselves, more or less explicitly: (i) How are quantities determined, and does this have any relationship with income distribution? (ii) How do profit rate differentials evolve over time, and what are the forces at work? (iii) In the Classical theory of prices, what roles are played by notions such as the firm or industry?

12What is at issue here—amongst other things—is the relationship that it may (or may not) be possible to construe between post-Sraffian and post-Keynesian theories—or, in more technical terms, between the “cross-dual dynamics” of modern gravitation models, and capital accumulation processes tied to expected profits, but also to interindustry capital mobility. Similarly, to give a role to the firm in a post-Sraffian model raises delicate conceptual problems. The multi-industry firm is thus a natural candidate for making these different associations. Graham White proposes an illustrative model that facilitates our engagement with the above questions.

13Carlo Benetti, Christian Bidard, Edith Klimovsky & Antoine Rebeyrol concentrate on the disequilibrium situations that characterize the process of accumulation. In contrast with the research done on gravitation, the authors are not interested in stability itself, so much as in the description of an economy in temporary disequilibrium. The difference is important, considering that gravitation models (and also tâtonnement models) do not determine disequilibrium prices, but only the direction in which they move. In the present contribution, the issue is about taking disequilibrium states into account in order to fully describe them—that is, in order to determine price and quantity levels.

14The model proposed here is inspired more by Torrens and Marx than by Sraffa, but it remains part of the Classical tradition, with the addition that it is a monetary model in which the methods used to settle the balances are made explicit. The possibility of building a model such as this, even limited to two industries, is in itself a considerable achievement. One remarkable attribute of this model is that the condition for the uniformity of the profit rate is another way of expressing the uniformity of the rate of surplus. The dynamic properties of this model are also studied.


15The debate mentioned above, concerning the respective roles of physical and social factors, leads Richard Arena to ask whether it is possible for Sraffa and his successors to stick to a strict physical objectivity. The main difficulty, recognized by Sraffa himself, lies in interpreting the coexistence of technical and social factors when determining the surplus. The issue arises for wages, which Sraffa admits combine a technical factor (subsistence) and a social factor (the wage-earner’s ability to get more than what is implied by a pure and simple replacement). In contrast with the second, the first is not a part of the surplus.

16What Richard Arena correctly grasps is the gap that Sraffa maintains exists between the subsistence wage (corresponding to technical requirements), and all other incomes, regardless of the subtle differences which may exist between them. This is the point at which the second component of Sraffa’s system of equations intervenes, namely the rule according to which the price of the surplus product is distributed. Alongside a material requirement, there is a social requirement—interest or profit as incentive to production. This ought to justify the treatment Sraffa proposes for wages, and should generalize it to dividends and other incomes—the technical requirement for the subsistence wage, the social requirement for the supplementary-wage and other incomes.

17Another interesting example of unresolved debate concerns applying neo-Ricardian (or post-Sraffian) critique of the theory of prices to the traditional issues of the neoclassical theory of international trade (Heckscher-Ohlin-Samuelson theorem). This means taking into account what has been learnt from the “capital controversy” (also labelled the controversy between the two Cambridges), and deriving consequences for the theory of international trade. Christophe Depoortère and Joël Thomas Ravix show that these studies have not produced convincing results, both because they attacked a simplistic version of neoclassical theory (albeit extremely prevalent in textbooks!), but also because the relevant questions have since changed. It is true that the capital controversy did not concern the most general version of standard theory (the competitive general equilibrium theory). What Sraffa nevertheless taught us (not in his 1960 book, but in an article he published in 1930 in the Quarterly Journal of Economics), is that the rift claimed to exist by commentators, between the absolute advantage attributed to Smith, and the comparative advantage attributed to Ricardo, is for a large part imaginary. This stance makes it possible to deal with the division of labour and international trade within a single theory. It seems, however, that little work has been done so far to follow this line of research.


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    This issue presents a selection of the contributions presented at a conference organized on this theme, announced in issue no. 64 of Cahiers d’économie politique, and held at the Université de Paris-Ouest on the 16th & 17th October 2014.
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