Sraffa’s Production of Commodities by Means of Commodities with Flexible Coefficients Production Functions

Sraffa wrote explicitly in his Preface that his investigation was concerned exclusively with such properties of an economic system that do not depend on changes in the scale of production or in the proportions of “factors”. In spite of this warning, Sraffa’s critique of economic theory has itself been criticized for being based on the assumptions of a linear activity production function (of the Leontief type) and constant returns to scale. In this paper, it is shown that also in the case in which the methods of production, both at the industry level and at the firm level, are consistent with flexible coefficients of substitution production function (of the Cobb–Douglas type), Sraffa’s critique is not based on the assumption of constant returns to scale. The critique holds independently on any assumption about returns and on the functional form of the production function.