On the Ricardian Invariable Measure of Value: A General Possibility of the Standard Commodity

The purpose of this paper is to examine the critical arguments made by Burmeister, Samuelson, and others with respect to Sraffa (1960). In his arguments about the standard commodity, Sraffa assumed that a change in income distribution has no effect on the output level and choice of techniques. However, critics argue that the interdependence among changes in income distribution, output level, and choice of techniques should be considered in the arguments on the invariable measure of value and the linearity of income distribution. Given this debate, this paper defines a generalisation of the standard commodity by considering general economies with non-increasing returns to scale, in which such interdependence is a universal feature. Moreover, it is shown that the generalised standard commodity can serve as an invariable measure of value in those general economies. Finally, this paper characterises the necessary and sufficient condition under which the linear functional relation of income distribution is obtained in those economies.