Stigler on Ricardo

Abstract

This paper attempts to scrutinize George Stigler’s interpretation of Ricardo’s theory. Like many other 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 allows him to discover irritating 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 a marginal productivity theory of profits. Stigler while praising 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 the latter, however, did not feel the need, or the possibility, to defend.