On Sraffa, post-Keynesian theories of pricing and capitalist competition: Some observations

The paper explores the implications of the 1920s 'cost controversy' for heterodox economic theory (here limited to post-Keynesian and Sraffian analysis). It argues that neither neoclassical nor heterodox theories have found viable solutions to the basic dilemma posed by the 'cost controversy', namely how to reconcile a general theory of price with that of growth and accumulation. The a priori commitment of neoclassical theory to a symmetric theory of exchange and production means that the impasses met by Walrasian general equilibrium theory and by the New Endogenous Growth Theory cannot be resolved, while also preserving explanatory power. For the case of post-Keynesian and Sraffian theory, it is suggested that, while a claim to "a general theory of everything" is also unsustainable, a reconsideration of the methodological roots of Sraffa's own analysis and of core aspects of classical theories of competition, might open an avenue to providing an empirically relevant heterodox theory of contemporary corporate capitalism.