Piero Sraffa and Counterfactuals: A View from Sraffa's Unpublished Papers in the Late 1920s

We reconstruct Sraffa’s position with regard to counterfactual reasoning in the second half of the 1920s as documented by his hitherto unpublished papers. While Sraffa did not use the term “counterfactual”, it is precisely this concept he had in mind, when he examined certain non-purely observational propositions and discussed the responses to ‘What if?’ questions. He did so with respect to different contexts. His attention focused however primarily on the marginal theory of value and distribution. Sraffa’s method of inquiry can be interpreted as an instance of abductive reasoning. The paper confirms Sen’s interpretation that Sraffa met counterfactual reasoning with suspicion, since it might easily lead to highly misleading propositions. But Sraffa’s manuscripts do not support the extreme view (not entertained by Sen) that any counterfactual reasoning ought to be rejected.