Neo-Ricardian Economics

Neo-Ricardian economics, also called Sraffian economics, is a school of thought that grew out of Piero Sraffa's 1960 book Production of Commodities by Means of Commodities, which reconstructed David Ricardo's classical theory of value and distribution using a price-based model largely free of the neoclassical marginal-productivity apparatus. Sraffa's model showed that relative prices and the distribution of income between wages and profits could be determined without reference to an aggregate measure of capital, a result that became the technical core of the Cambridge capital controversy of the 1960s, in which economists based in Cambridge, England, including Joan Robinson and Sraffa himself, challenged economists based in Cambridge, Massachusetts, including Paul Samuelson, over the theoretical coherence of aggregate capital in neoclassical growth theory. Robert Rowthorn coined the term neo-Ricardian in 1974 to describe economists such as Pierangelo Garegnani and Ian Steedman who built on Sraffa's framework, and the school today overlaps substantially with post-Keynesian and neo-Marxian economics in its shared rejection of marginalist distribution theory. Its central legacy is a technical demonstration that income distribution is not fixed by technology and factor scarcity alone but is also shaped by social and institutional bargaining power between classes. This description is adapted from Wikipedia contributors under CC BY-SA 4.0; changes were made. https://creativecommons.org/licenses/by-sa/4.0/