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Sraffa on the degeneration of the notion of cost
[The ultimate standard of value]

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  • Saverio M Fratini

Abstract

The paper reconstructs the history of what Sraffa called the ‘degeneration of cost’, as emerges from his manuscripts of the late 1920s. In particular, Sraffa regards the Physiocrats as having the correct idea of cost as being the commodities that allow workers to subsist. The classical economists measured this bundle of commodities in terms of labour, which they also ambiguously viewed as ‘toil and trouble’. Then, the idea of labour as ‘toil and trouble’ was indicated by Marshall as an anticipation of the conception of cost as a sacrifice. Conferring also upon abstinence from consumption the nature of sacrifice, the neoclassical-marginalist theory understood wages and interest as compensation for the disutility of working and saving. Then, cost was ultimately seen as what induces workers and capitalists to produce. This completed the degeneration of cost from the objective-physical conception of the Physiocrats to the subjective-psychological view of the marginalist school.

Suggested Citation

  • Saverio M Fratini, 2018. "Sraffa on the degeneration of the notion of cost [The ultimate standard of value]," Cambridge Journal of Economics, Cambridge Political Economy Society, vol. 42(3), pages 817-836.
    • Handle: RePEc:oup:cambje:v:42:y:2018:i:3:p:817-836.
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    File URL: http://hdl.handle.net/10.1093/cje/bex063
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    References listed on IDEAS

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    1. Frank A. Fetter, 1923. "Value and the Larger Economics," Journal of Political Economy, University of Chicago Press, vol. 31(5), pages 587-587.
    2. Heinz Kurz, 1998. "Against the current: Sraffa's unpublished manuscripts and the history of economic thought," The European Journal of the History of Economic Thought, Taylor & Francis Journals, vol. 5(3), pages 437-451.
    3. Kurz, Heinz D., 2006. "The agents of production are the commodities themselves: On the classical theory of production, distribution and value," Structural Change and Economic Dynamics, Elsevier, vol. 17(1), pages 1-26, January.
    4. Rodolfo Signorino, 2005. "Piero Sraffa's lectures on the advanced theory of value 1928-31 and the rediscovery of the classical approach," Review of Political Economy, Taylor & Francis Journals, vol. 17(3), pages 359-380.
    5. Heinz Kurz & Neri Salvadori, 2005. "Representing the production and circulation of commodities in material terms: On Sraffa's objectivism," Review of Political Economy, Taylor & Francis Journals, vol. 17(3), pages 413-441.
    6. Whitaker, Albert Conser, 1904. "History and Criticism of the Labor Theory of Value in English Political Economy," History of Economic Thought Books, McMaster University Archive for the History of Economic Thought, number whitaker1904.
    7. Frank A. Fetter, 1923. "Value and the Larger Economics: Value Giving Way to Welfare," Journal of Political Economy, University of Chicago Press, vol. 31(6), pages 790-790.
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    Cited by:

    1. Saverio M. Fratini, 2018. "Theories of Value and Ultimate Standards in Sraffa’s Notes of Summer 1927," Bulletin of Political Economy, Bulletin of Political Economy, vol. 12(1-2), pages 35-53, June.
    2. Fratini, Saverio M., 2019. "Theories of value and ultimate standards in Sraffa's notes of summer 1927," MPRA Paper 91728, University Library of Munich, Germany.
    3. Alessandro Le Donne, 2022. "Quale Marx? A partire da una rilettura di Marx e gli economisti classici di Pierangelo Garegnani (Which Marx? A discussion from a re-reading of Marx and the classical economists by Pierangelo Garegnan," Moneta e Credito, Economia civile, vol. 75(299), pages 327-338.
    4. Trezzini, Attilio, 2019. "Sraffa on Marshall's Theory of Value in the Cambridge Lectures: Achievements in an Unfinished Criticism," Centro Sraffa Working Papers CSWP34, Centro di Ricerche e Documentazione "Piero Sraffa".
    5. Cesaratto, Sergio, 2017. "Garegnani, Ackley and the years of high theory at Svimez," Centro Sraffa Working Papers CSWP26, Centro di Ricerche e Documentazione "Piero Sraffa".

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    More about this item

    Keywords

    Cost; Economic methodology; Sraffa; Sraffa’s manuscripts;
    All these keywords.

    JEL classification:

    • B12 - Schools of Economic Thought and Methodology - - History of Economic Thought through 1925 - - - Classical (includes Adam Smith)
    • B13 - Schools of Economic Thought and Methodology - - History of Economic Thought through 1925 - - - Neoclassical through 1925 (Austrian, Marshallian, Walrasian, Wicksellian)
    • B41 - Schools of Economic Thought and Methodology - - Economic Methodology - - - Economic Methodology
    • B51 - Schools of Economic Thought and Methodology - - Current Heterodox Approaches - - - Socialist; Marxian; Sraffian
    • D24 - Microeconomics - - Production and Organizations - - - Production; Cost; Capital; Capital, Total Factor, and Multifactor Productivity; Capacity

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