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A Reflection on the Samuelson-Garegnani Debate

Ajit Sinha

Abstract

This paper argues that Samuelson’s criticisms of Sraffa mainly concentrated on Sraffa’s claim that the propositions of his book (Sraffa 1960) did not depend on the assumption of constant returns to scale. Garegnani’s defence of Sraffa against Samuelson’s criticisms remained ineffective because Garegnani’s own interpretation of Sraffa’s prices as classical ‘centre of gravitation’ or ‘long term’ prices requires constant returns to scale assumption. The paper goes on to critique Garegnani’s interpretation of Sraffa and the classical economics to show that Garegnani’s interpretation of Sraffa and the classical economics is highly problematic and that Samuelson’s criticism of Sraffa does not hit the target because Sraffa’s prices are not necessarily ‘equilibrium’ prices and therefore there is no need of returns to scale assumption in his theory.

Published on 28 Sep 2015 in Economic Thought Vol 4, No 2, 2015