Sraffaâ€™s Contributions to the Methodology of Economics
This article highlights some of Sraffaâ€™s main contributions to the methodology of economics. It argues that Sraffa rejected counterfactual reasoning and hence the â€˜marginal methodâ€™ of analysis. Sraffaâ€™s theory is built solely on factual and objective information and hence it removes psychology from economics as well. Sraffaâ€™s theory shows that considerations of demand and the condition of equilibrium of demand and supply are irrelevant to a logical theory of prices. The article goes on to show how Sraffaâ€™s novel approach to economic theory was able to expose the logical errors of â€˜marginal methodâ€™ in the Austrian and Neo-classical theories of distribution. Finally, it also raises some questions for Sraffaâ€™s theory that need to be resolved.JEL: B2, B3, B4, B5