Pierangelo Garegnani: economics with a critical orientation
In this paper we will focus on some of the problems in the theory of value and distribution that Sraffa and Garegnani have tackled in their path-breaking works. In particular, the focus will be first on the identification of the cost-minimizing system of production from a set of technical alternatives and its properties in terms of the general rate of profits and the set of relative prices corresponding to a given real wage rate. Next we will discuss briefly in highly abstract terms and in the context of an utterly simple one-good economy the process of the diffusion of new techniques and the gradual elimination of old techniques, which once were cost minimizing, but no longer are. The issue at hand is an aspect of what Schumpeter called “creative destruction.” Finally, we will analyse the non-conventional (that is, non-marginalist) findings in capital theory put forward by Sraffa (1960) and further elaborated by Garegnani (1970, 1990 etc.). When their theoretical possibility had been firmly established, they were questioned on empirical grounds. The problem with this questioning is that it is far from clear, how it could convincingly be shown that some of the phenomena under scrutiny do, or do not, exist in the real world. After all, what is at issue is the behaviour of the economic system as a whole, and the data situation on the basis of which the question could possibly be decided is perhaps not up to the problem at hand. In this respect, we will point out some of the difficulties to investigate the situation in terms of data taken from input-output tables.