David Ricardo – First Principle

Note to “On Absolute Value and the Value in Exchange of Commodities”

The Note to “On Absolute Value and the Value in Exchange of Commodities” focuses only on the solution of Ricardo’s problem how to derive from the exchange values of commodities where, in which firms, production circumstances have changed in terms of more or less direct and indirect labour required for the production of commodities.

By declaring the net production of an equal quantity of labour in a society to be invariable in value over time, the writer of the note was convinced that Ricardo’s problem could be solved. This concept of absolute value, he believed, must make it possible, using the exchange values of commodities, to determine exactly where and when more or less direct and indirect labour is required for the production of commodities.

The note, dated March 8, 1974, reports on this and presents the two complementary methods of twofold valuation that make this possible, although at the time he had not yet succeeded in actually getting his finger behind both methods.

The note is therefore especially important for those who are interested in the history of the twofold valuation. The final elaboration of both methods is described elsewhere on this website in the paper A Reappraisal of Ricardo’s Principles – On measuring technical change.

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