The New Palgrave Dictionary of Economics

2018 Edition
| Editors: Macmillan Publishers Ltd

Invariable Standard of Value

  • J. E. Woods
Reference work entry
DOI: https://doi.org/10.1057/978-1-349-95189-5_718

Abstract

I. In Sections I–III, Chapter I of the Principles, Ricardo rejected Smith’s labour-commanded theory of value in favour of an embodied-labour theory – for a justification of this, see Sraffa’s Introduction to Ricardo (1951) or Garegnani (1984). However, in Sections IV and V, he was forced to modify his theory to take account of the effects of movements in income distribution. Thus, Ricardo had isolated two cases where the value of commodities would change – first, when there was an alteration in the amount of labour required, directly and indirectly, in production; and second, when there was a rise or fall in the value of labour, which operated through unequal capital–labour ratios in the different industries. On empirical grounds, Ricardo argued that the first would dominate the second:

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Biblography

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Copyright information

© Macmillan Publishers Ltd. 2018

Authors and Affiliations

  • J. E. Woods
    • 1
  1. 1.