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Absolute and Exchangeable Value

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Abstract

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’.

Keywords

  • 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

JEL Classifications

  • D0

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  • DOI: 10.1057/978-1-349-95189-5_614
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Bibliography

  • Marx, K. 1883. Capital. Vol. 3. London: Lawrence and Wishart. 1976.

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  • Ricardo, D. 1820. Letter to J.R. McCulloch, 13 June 1820. In Works and correspondence of David Ricardo. Vol. 8, ed. P. Sraffa. Cambridge: Cambridge University Press, 1953.

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  • Ricardo, D. 1823. Paper on ‘Absolute and exchangeable value’ (rough draft, and unfinished clean version). In Works and correspondence of David Ricardo. Vol. 4, ed. P. Sraffa. Cambridge: Cambridge University Press, 1951.

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  • Sraffa, P. 1951. Introduction to works and correspondence of David Ricardo. Vol. 1. Cambridge: Cambridge University Press.

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  • Sraffa, P. 1960. Production of commodities by means of commodities. Cambridge: Cambridge University Press.

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© 2018 Macmillan Publishers Ltd.

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Eatwell, J. (2018). Absolute and Exchangeable Value. In: The New Palgrave Dictionary of Economics. Palgrave Macmillan, London. https://doi.org/10.1057/978-1-349-95189-5_614

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