Stigler on Ricardo

CSWP 27 (January 2018)

Author Heinz D. Kurz

Keywords David Ricardo; Ideology; Piero Sraffa; George Stigler; Value and distribution

JEL B12; D24; D46

The paper scrutinises George Stigler’s interpretation of Ricardo's theory. Like many marginalists, he assesses Ricardo’s contribution in terms of marginalist theory. This confirms Piero Sraffa’s observation that by the end of the nineteenth century the analytical structure, content and genuine significance of the classical theory had been “submerged and forgotten”. However, Stigler's textual acuteness makes him see important elements of Ricardo’s analysis that resist the marginalist interpretation.
His irritation can only have been increased by Sraffa’s exposition of Ricardo’s surplus-based theory of profits in volume I of the Ricardo edition. This contradicted marginal productivity theory of profits. Stigler praises Sraffa’s edition beyond all measure, refrains however from discussing his interpretation. Things do not change after Sraffa in 1960 publishes a logically consistent formulation of the classical theory of value and distribution. Sraffa's interpretation challenged Stigler's ideological position, which, however, he did not feel the need, or possibility, to defend.

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