On the Ricardian Invariable Measure of Value: The 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, while those critics argue that interdependence among changes in income distribution, output level, and choice of techniques should be taken into consideration in the arguments on the invariable measure of value and the linearity of income distribution. Given this debate, the paper considers general economies with non-increasing returns to scale, where such interdependence is a universal feature, in which a generalisation of the standard commodity is defined. Moreover, it is shown that the generalised standard commodity can serve as an invariable measure of value even in those general economies. Finally, the paper also characterises the necessary and sufficient condition under which the linear functional relation of income distribution is obtained in those economies.