From 1921 to 1922 he studied at the London School of Economics. In 1922, he was appointed director of the provincial labour department in Milan, then professor in political economy first in Perugia and later in Cagliari, Sardinia. In Turin he met Antonio Gramsci (the most important leader of Italian Communist Party). They became close friends, partly due to their shared political views. Sraffa was also in contact with Filippo Turati, perhaps the most important leader of the Italian Socialist Party, whom he allegedly met and frequently visited in Rapallo, where his family had a holiday villa.
In 1925, he wrote about returns to scale and perfect competition, underlining some doubtful points of Alfred Marshall’s theory of the firm. This was amended for British readers and published in 1926 as The Laws of Returns under Competitive Conditions.
In 1927, Sraffa’s yet undiscussed theory of value—but also his friendship with Antonio Gramsci, a risky and compromising endeavor in the context of the Italian fascist regime, considering Gramsci had previously been imprisoned (Sraffa supplied the material, literally pens and paper, with which Gramsci would write his Prison Notebooks)—brought John Maynard Keynes to prudently invite Sraffa to the University of Cambridge, where the Italian economist was initially assigned a lectureship.