Living Reference Work Entry

The New Palgrave Dictionary of Economics

pp 1-3

Date: Latest Version

Absolute and Exchangeable Value

  • John EatwellAffiliated with


The notion of absolute (as distinct from exchangeable or relative) value arises in classical economics from the image of a given magnitude of output being distributed between the social classes. Ricardo posited that the value of the social surplus could be expressed in terms of labour regardless of how the surplus was distributed. But since changes in distribution affect exchangeable value, the value of the surplus will typically vary as distribution varies, even though its physical magnitude remains unchanged. In 1823 Ricardo concluded that ‘there is no such thing in nature as a perfect measure of value’.


Absolute and exchangeable value Cairnes, F. E. Cairnes, J. E. Class Classical economics Invariable standard of value Labour theory of value Marx, K.H. Rate of profit Ricardo, D. Sraffa, P. Surplus

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