Sraffa (Piero Sraffa)

Piero Sraffa was an Italian economist whose work challenged traditional views on how prices and profits are determined in an economy. He developed a model showing that prices result from the interplay of production processes, input costs, and the structure of industries, rather than solely from supply and demand. His approach emphasizes the importance of the relationships between different commodities and industries, highlighting that profits depend on these interconnections. Sraffa’s work provided a foundation for alternative economic theories, especially in understanding the long-term distribution of income and the dynamics of capitalism beyond classical and neoclassical perspectives.