Sraffa and the “laws of returns”: an analysis of the 1925-1926 articles

ABSTRACT

This article analyzes two texts by Sraffa published in 1925 and 1926 with criticisms of the dominant marginalist approach, which presupposes free competition and diminishing returns. Sraffa concluded that such a model only applies in the case of constant returns. These two articles served as a basis for Sraffa, almost 30 years later, to formulate a devastating critic of the marginalist or subjective theory of value by proposing a model of prices and income distribution that does not depend on the hypothesis of changes in the scale of production or in the proportion of factors.

KEYWORDS:
Sraffa; costs; prices; imperfect competition