Introduction

This short chapter is inspired by a certain scientific and biographical background of Alessandro Roncaglia: his theoretical stand—close to the English and French classical economists (called the “Classics” from now onward), Piero Sraffa and post-Keynesianism—developed from both sides of the Atlantic Sea, in addition to his personal and intellectual nearness to Paolo Sylos Labini. In particular, the subject at issue is related to his claim that the theory of value and distribution and the method of the Classics need a separate analysis of an economy with exhaustible natural resources—typically the oil sector (Roncaglia, 1983 and 1985), which is characterized by specific institutional and oligopolistic features. We shall argue that Sraffa's (1960, ch. 11) equations with land can be reformulated to determine the prices of production of commodities and the rent/ royalty paid for the use of oil, still preserving the level of abstraction and the method of given quantities adopted in the basic model. Instead, in the absence of additional assumptions that are alien to the classical theory of the prices of production, the same equations cannot determine the price of oil held in the ground as an asset. The present argument resumes a thesis advanced elsewhere by the author (Parrinello, 2004) and revisits the metaphor of the snapshot of an economy that Roncaglia (1975 and 2009) adopts for the interpretation of the Sraffian method of given quantities.

A Sketch of the “Oil Question”

Economists of different theoretical persuasions believe that the problem of the running down of oil deposits is often misplaced and misleading in most debates of economic policy and political economy as well. Such a problem of increasing scarcity—the “oil question”— can be traced back to the old “coal question” of William Jevons (1865) and to the more recent “limits to growth” (Meadows et al., 1972), which address a similar question related to the general problem of an energy shortage. Different sources and kinds of criticisms and defenses can be mentioned about this subject.