Sraffa and the Assumption of Constant Returns to Scale: A Critique of Samuelson and Etula

Abstract

In a recent paper Samuelson and Etula claim to have provided three examples of the presence of a constant returns to scale assumption in Sraffa's Production of Commodities. The present paper is a refutation of their interpretation of Sraffa's propositions. It shows that they mistakenly take Sraffa's logical propositions for empirical propositions. This article also provides evidence to refute Samuelson's hypothesis that Sraffa consistently confused the concept of Marshallian “constant cost” with the general equilibrium concept of “constant returns to scale”. The paper also argues that Sraffa's prices are not necessarily “equilibrium” prices, and that it is not true that Sraffa maintained that changes in demand had no impact on prices; his position appears rather to be that the impact of demand on prices is unpredictable.

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