Abstract

The necessity to express the relative price of a commodity in terms of an-

other commodity makes it impossible to distinguish, within a variation of
its relative price, that part of the change that can be ascribed to the char-
acteristics of the commodity itself from that part that is to be ascribed to
the characteristics of the commodity of reference, i.e. the numeraire. Ricar-
do (1817) pointed out this problem and the necessity to nd an invariable
measure of value, but he was not able to solve this problem. Sraa (1960)
suggested to use a composite commodity (that is, a bundle of commodi-
ties) to accomplish this function. Within his framework of production of
commodities by means of commodities he built the Standard commodity,
which is a composite commodity which he claims to be a standard of value
invariant with respect to changes in the distribution of income. But in Sraf-
fas book there is no explicit proof of this claim. This gave rise to a lot of
misunderstandings about the standard commodity and its r ole as invariable
measure of value. In several contributions Sraas solution to the Ricardos
problem was questioned. In this work I shall try rst to clarify what it
means, for a numeraire, to be an invariable measure of value. Then I shall
show that Sraas standard commodity does satisfy this condition. On this
basis I will re-examine the function of the standard commodity within the
analysis of income distribution. A survey of the literature on the problem
is presented at the end of the paper.
KEYWORDS: standard commodity, invariable measure of value, price the-
ory, Sraa price system, value theory, distribution theory.
J.E.L. CLASSIFICATION: B12, D33, D46, E11 .
On Sraas Standard Commodity as Invariable
Measure of Value
Enrico Bellino
1
Universit` a Cattolica del Sacro Cuore (Milano)
C.O.R.E. (Louvain-la-Neuve)
English not accurately checked
1
I would like to thank professor Luigi Pasinetti for his stimulus to go deep into
some issues concerning the standard commodity and for his detailed comments on
previous versions of this work. I would like to thank also Christian Bidard, Flavia
Cortelezzi, Pierangelo Garegnani, Marco Piccioni, Fabio Ravagnani, Angelo Reati,
Neri Salvadori, Ernesto Savaglio, Ian Steedman, Paolo Varri and the participants to
a seminar in Catholic University for useful discussions on this topic. Usual caveats
apply.
2 [Introduction
1 Introduction
The problem to isolate within a variation of the relative price of a commodity
that part of it that can be ascribed to the price of commodity itself from
that part that is to be ascribed to the commodity used as numeraire was
emphasized at least two centuries ago by Ricardo. It is useful to start by
quoting those passages where Ricardo states the main points of the problem.
Two commodities vary in relative value, and we wish to know in
which the variation has really taken place. If we compare the present
value of one, with shoes, stockings, hats, iron, sugar, and all other com-
modities, we nd that it will exchange for precisely the same quantity
of all these things as before. If we compare the other with the same
commodities, we nd it has varied with respect to them all: we may
then with great probability infer that the variation has been in this
commodity, and not in the commodities with which we have compared
it. If on examining still more particularly into all the circumstances
connected with the production of these various commodities, we nd
that precisely the same quantity of labour and capital are necessary
to the production of the shoes, stockings, hats, iron, sugar, &c.; but
that the same quantity as before is not necessary to produce the single
commodity whose relative value is altered, probability is changed into
certainty, and we are sure that the variation is in the single commod-
ity: we then discover also the cause of its variation. Ricardo (1817,
pp. 1718)
When commodities varied in relative value, it would be desirable
to have the means of ascertaining which of them fell and which rose in
real value, and this could be eected only by comparing them one after
another with some invariable standard measure of value, which should
itself be subject to none of the uctuations to which other commodi-
ties are exposed. Of such a measure it is impossible to be possessed,
because there is no commodity which is not itself exposed to the same
variations as the things, the value of which is to be ascertained; that
is, there is none which is not subject to require more or less labour for
its production. Ricardo (1817, pp. 4344)
But along with technological change (the change in the quantity of labour
necessary to produce a commodity) Ricardo considers another source of
variation of relative prices: the change in income distribution.
Introduction] 3
But if this cause of variation in the value of a medium could be
removedif it were possible that in the production of our money for
instance, the same quantity of labour should at all time be required,
still it would not be a perfect standard or invariable measure of value,
because, as I have already endeavoured to explain, it would be sub-
ject to relative variations from a rise or fall of wages, on account of
the dierent proportions of xed capital which might be necessary to
produce it, and to produce those other commodities whose alteration
of value we wished to ascertain. Ricardo (1817, p. 44)
Thus Ricardo was looking for a standard of value that were invariant to
technical change as well as with respect to changes in the distribution of
income.
1
And he concludes:
If, then, I may suppose myself to be possessed of a standard so
nearly approaching to an invariable one, the advantage is, that I shall
be enabled to speak of the variations of other things, without embar-
rassing myself on every occasion with the consideration of the possible
alteration in the value of the medium in which price and value are
estimated. Ricardo (1817, p. 46)
Nobody has been able to solve Ricardos problem in its entirety. Sraf-
fa (1960) oered a partial solution to this problem by building, within his
framework of production of commodities by means of commodities, a nu-
meraire, called Standard commodity, that he claims to be an invariable
measure of value with respect to exogenous changes in the distribution of
income.
2
But the notion of standard commodity and its r ole within the
Sraas framework has always been one of the most discussed and often
misunderstood in Sraan and in anti-Sraan literature. Actually Sraa
explains very clearly the Ricardos problem. He writes:
The necessity of having to express the price of one commodity in
terms of another which is arbitrarily chosen as standard, complicates
1
An attempt of reconstruction of the Ricardos search for an invariable measure of
value has been done by Kurz and Salvadori (1993). In that paper they also refer to
an invariance property with respect to interspacial comparisons that the standard that
Ricardo was looking for should have had to exhibit (see Kurz and Salvadori (1993, pp. 96
98)).
2
The solution of the other side of the problem that is, a unit of value invariant with
respect to technical change has been performed by Pasinetti (see (1981, 1993)); he called
such a unit dynamic standard commodity.
4 [Introduction
the study of the price-movements which accompany a change in dis-
tribution. It is impossible to tell of any particular price-uctuation
whether it arises from the peculiarities of the commodity which is be-
ing measured or from those of the measuring standard. The relevant
peculiarities, as we have just seen, can only consist in the inequality
in the proportions of labour to means of production in the successive
layers into which a commodity and the aggregate of its means of pro-
duction can be analyzed; for it is such an inequality that makes it
necessary for the commodity to change in value relative to its means
of production as the wage changes. Sraa (1960, p. 18)
But, at the same time, Sraa is not equally clear in showing why his stan-
dard commodity solves the requirement of invariance with respect to change
in income distribution. He gives some intuitive hints in 21 before building
the standard commodity; later he concentrates on the building of the stan-
dard commodity ( 2328 and 3335), on the properties of the standard
system (chap. V) and on the fact that if in a single production model this
commodity is used as numeraire then the relationship between the wage rate
and the prot rate becomes independent on prices ( 2932). But after the
building of the standard commodity there is no explicit discussion about
if and why the standard commodity is a measure of value invariant with
respect to changes in income distribution. And all those scholars that dealt
with and discussed the Sraas standard commodity oered very few hints
to understand this point.
3
Only Baldone (1980, pp. 274277) and Kurz
and Salvadori (1993, pp. 121-122, n. 16) sketch two proofs of the invariance
of the standard commodity with respect to changes in the distribution of
income.
In this work I present a proof of this result in a way that seems more
suitable to understand the whole topic from the economic point of view and
that is easier to be connected with the economic intuitions suggested by
Sraa in his 21.
The paper is organized as follows: in section 2 the essentials of the
Sraas single product price framework will be recalled; in section 3 the
capability of the standard commodity to be an invariable measure of value
with respect to changes in income distribution will be dealt and in section
4 some observations concerning the analysis of distribution will be drawn in
3
A quick survey of the literature on the standard commodity can be found, later, in
Section 6.
Basic framework] 5
light of the properties of invariance of the standard commodity. In section 5
we will see some generalizations and extensions of the obtained results and in
section 6 we will present a synthetic survey of the existing literature on the
standard commodity, emphasizing the most common objections, criticisms
and misunderstanding about this notion.
2 Review of the basic framework
The reference framework is the single product Sraas price system with
circulating capital:
p
T
= (1 +)p
T
A+wa
T
0
(1a)
p
T
b = 1, (1b)
where p is the (n, 1) vector of prices, A is the (n, n) non-negative input-
output matrix, and w are two scalars indicating the rate of prot and
the wage rate, respectively, a
0
is the (n, 1) non-negative vector of labour
input coecients and b is an (n, 1) non-negative vector representing the
commodity bundle used as numeraire. Symbol
T
denotes the transpose of
a vector. System (1a) is constituted by n equations in n + 2 unknowns,
i.e. the n prices, the prot rate and the wage rate. System (1) determines
relative prices once one of the two distributive variables is xed from outside.
Following Sraa, we x the prot rate exogenously with respect to the price
system. By solving equation (1a) with respect to p we obtain:
p
T
= wa
T
0
[I (1 +)A]
1
; (2)
thanks to Perron-Frobenius theorems on non-negative matrices the inverse
matrix in (2) exists and is non-negative for 0 < , where := 1/
M
1
and
M
is the dominant eigenvalue of A. In order to assure > 0 we assume

M
< 1, that is, that technique A is viable.
By substituting vector p given by (2) in equation (1b) we obtain the
expression of the relationship between the prot rate and the wage rate,
6 [Basic framework
this latter being expressed in terms of numeraire b:
4
w
(b)
() :=
1
a
T
0
[I (1 +)A]
1
b
. (3)
Again, thanks to Perron-Frobenius theorems, the elements of the inverse at
the denominator are non-decreasing functions of for 0 < ; hence the
wage rate is a non-increasing function of the rate of prot. (If matrix A is
indecomposable the wage rate comes to be a strictly decreasing function of
the rate of prot.)
Re-substituting this expression into equation (2) we obtain the expres-
sion of the vector of prices as a function of the prot rate only:
p
T
(b)
() =
1
a
T
0
[I (1 +)A]
1
b
a
T
0
[I (1 +)A]
1
. (4)
As [I (1 + )A]
1
is non-negative the solutions with respect to the
wage rate (3) and the price vector (4) are non-negative for any within the
interval [0, ).
5
Turning to the quantity-side the standard system is an economic sys-
tem in which the various commodities are represented among its aggregate
means of production in the same proportions as they are among its prod-
ucts. (Sraa 1960, p. 19; emphasis in the original). Let q the (n, 1) vector
of the total quantities to be produced of the various commodities; in the
standard system q must satisfy the following conditions:
q = (1 +R)Aq (5a)
a
T
0
q = 1, (5b)
where R is the uniform physical rate of surplus and the total quantity of
labour employed has been normalized to unity. Let us indicate by q

the non-
negative vector that satises system (5); mathematically it is the right-hand
4
In what follows we will use te convention to indicate by index
(b)
the (composite)
commodity, b, in terms of which the wage rate, w
(b)
, and the vector of relative prices,
p
(b)
= [p
(b)i
], i = 1, . . . , n, are expressed. In the case in which the commodity used as
numeraire is a single commodity, j, we will write w
(j)
and p
(j)
= [p
(j)i
], i = 1, . . . , n.
Obviously we have p
T
(b)
b = 1 or p
(j)j
= 1. (We will indicate explicitly the numeraire in
terms of which the wage rate and prices are expressed every time there is the need to
recall the attention on this point.)
5
For the details of this analytical formulation of the Sraas price system see Pasinetti
(1977, chap. 5) or Kurz and Salvadori (1994, chap. 4).
Theory of value] 7
eigenvector of matrix A correspondent to its dominant eigenvalue (A) =
1/(1 +R) = 1/(1 + ). Vector q

is called gross standard product. The net

standard product is dened by:
y

:= (I A)q

=
R
1 +R
q

;
thus y

is proportional to q

, hence
Ay

=
1
1 +R
y

(6)
holds; moreover as q

satises equation (5b) we obtain:

a
T
0
y

=
R
1 +R
. (7)
The standard net product can be considered a composite commodity; it is
what Sraa calls the standard commodity.
3 The standard commodity within the theory of
value
The key to an understanding of the sense in which the standard commodity
is an invariable measure of value is an analysis of the reason why relative
prices change when distribution is varied.
6
Consider singularly the price equations of the various commodities and
6
As recalled in the Introduction, the property of invariance of a commodity can be
intended at least in two ways: with respect to technical changes and with respect to change
in income distribution. For brevity here and in what follows the property of invariance is
to be intended, unless dierently specied, with respect to changes in income distribution.
8 [Theory of value
express prices in term of whatever (composite) numeraire, b:
7
p
(b)1
= (1 +)p
T
(b)
a
1
+w
(b)
a
01
.
.
.
p
(b)i
= (1 +)p
T
(b)
a
i
+w
(b)
a
0i
.
.
.
p
(b)n
= (1 +)p
T
(b)
a
n
+w
(b)
a
0n
_

_
(8a)
p
T
(b)
b = (1 +)p
T
(b)
Ab +w
(b)
a
T
0
b = 1, (8b)
where a
i
is the i
th
column of matrix A, representing the input coecients
of the various commodity used in industry i and a
0i
is the i
th
element of
vector a
0
, representing the input coecient of labour used in industry i,
i = 1, , n.
Suppose now that a variation of the rate of prot, for example an in-
crease, takes place. How should the other variables, i.e. the wage rate and
relative prices vary? Obviously the whole reasoning is quite complex, as
there is full interdependence among all variables. To throw light on the
argument, Sraa carries out a causal argument. We shall follow Sraa in
this attempt. Suppose for the moment that we keep all prices unchanged.
Then a uniform reduction (whatever it may be) of the wage rate would
not be sucient to restore the balance in all industries: in fact in those
industries which employ a suciently high proportion of labour to means
of production there would arise a surplus, while in those industries which
employ a suciently low proportion of labour to means of production there
would arise a decit. If we want to eliminate the surpluses and the decits
caused by such a change in distribution it is necessary that the prices of the
various commodities, p
(b)i
, i = 1, , n, vary.
8
In general this possibility is
7
The case of a numeraire constituted by a single commodity, i, can be obtained as a
particular case by setting b = e
i
, where e
i
is the i
th
elementary vector.
8
Sraa crucial claim is that this necessity does not arise for that commodity if it exists
which is produced by employing labour and the means of production in that critical
proportion which marks the watershed between decit and surplus industries. Sraa
(1960, p. 13). We will see later ( 6.1) that this does not mean that the price of such a
commodity remains constant; it does vary, but the causes of such a change are to be
ascribed to the necessity to restore the balance in other industries, not in the industry
characterized by the critical proportion.
Theory of value] 9
available for all commodities with the exception of the commodity used as
numeraire, as its price, by denition, is equal to 1. Yet the overall decrease of
the wage rate will not be sucient in general to eliminate the surplus or the
decit originated in the (aggregate) industry that produces the numeraire,
because of the dierences in the proportions between labour and the means
of production that characterize the various industries. On the other hand,
by observing equation (8b), which xes the price of numeraire at 1, we see
that the prices of all commodities, p
(b)
, appear in it as variables. So for the
various levels of equation (8b) imposes a constraint on p
(b)
.
9
Hence when
the rate of prot is varied, the price system, p
(b)
, will have to vary also in
order to restore the balance in the industry that produces the numeraire.
Then when distribution changes, there are not one but two sorts of pres-
sures on the price of each commodity; we shall call them own Industry
eect and Numeraire eect:
(I) own Industry eect: the variation of the price of a commodity arising
from the necessity to restore the balance within the corresponding
industry;
(N) Numeraire eect: the variation of the price of all commodities arising
from the necessity to restore the balance in the industry that produces
the numeraire.
This second sort of push, undergone by all prices, is at the root of the
Ricardos problem, as it makes
impossible to tell of any particular price-uctuation whether it
arises from the peculiarities of the commodity which is being
measured or from those of the measuring standard. Sraa (1960,
p. 18)
By contrast, we could dene invariable measure of value a commodity
that, if used as numeraire, renders eect (N) null, that is, a numeraire that
does not engender pressures on the prices of the various commodities in
order to restore the balance in its own industry.
9
System (8) is, in fact, a fully interdependent system of n + 1 equations in n + 1
unknowns, i.e., the n prices and the wage rate (the rate of prot is to be considered here
as an exogenous parameter).
10 [Theory of value
At this point we have all elements to verify that Sraas standard com-
modity satises such requirement of invariance. Consider again the price
equations of the various commodities and express all prices and the wage
rate in terms of standard commodity, y

:
p
(y

)1
= (1 +)p
T
(y

)
a
1
+w
(y

)
a
01
.
.
.
p
(y

)i
= (1 +)p
T
(y

)
a
i
+w
(y

)
a
0i
.
.
.
p
(y

)n
= (1 +)p
T
(y

)
a
n
+w
(y

)
a
0n
_

_
(9a)
p
T
(y

)
y

= (1 +)p
T
(y

)
Ay

+w
(y

)
a
T
0
y

= 1. (9b)
Let us focus the attention on the last equation of this system, (9b). By
using equations (6) and (7) equation (9b) becomes:
(1 +)
1
1 +R
p
T
(y

)
y

+w
(y

)
R
1 +R
= 1.
But as p
T
(y

)
y

= 1 we have
1 +
1 +R
+w
(y

)
R
1 +R
= 1,
i.e.
w
(y

)
= 1

R
. (9b

)
Hence system (9) reduces to:
p
(y

)1
= (1 +)p
T
(y

)
a
1
+w
(y

)
a
01
.
.
.
p
(y

)i
= (1 +)p
T
(y

)
a
i
+w
(y

)
a
0i
.
.
.
p
(y

)n
= (1 +)p
T
(y

)
a
n
+w
(y

)
a
0n
_

_
(9a)
w
(y

)
= 1

R
. (9b

)
Analysis of distribution] 11
In this case we see that the vector of prices has disappeared from the
last equation of system (9). Equation (9b

) has now become an equation in

the variable w
(y

)
only ( is here considered as an exogenous parameter). If
w
(y

)
decreases according to this rule the variations of the value of capital
plus prot component and of the wage component entirely compensate each
others within the industry of the numeraire, and thus the prices of all other
commodities have not to vary in order to restore the balance in this industry
the standard commodity industry. Hence the standard commodity, if used
as numeraire, makes eect (N) null. It is precisely in this sense that it can
be claimed that the standard commodity is an invariable measure of value.
This property descends from the particular proportions between labour and
the means of production that characterize its (aggregate) industry and that
assure that each variation of the wage component is always exactly oset by
an opposite variation of the value of capital plus prot component. In this
situation the variation of each relative price p
i
arises only from the necessity
to restore the balance in the respective industry i. Hence the standard
commodity, when used as numeraire, permits to observe the variations of
the relative price of each commodity in response to changes in the rate
of prot in isolation (as in a vacuum, Sraa (1960, p. 18), without the
disturbances arising from the peculiarities [...] of the measuring standard
(Sraa 1960, p. 18).
4 The standard commodity within the analysis of
distribution
It is worth to recall here briey the role played by the standard commodity
within the analysis of distribution. Relationship (3) between the prot rate
and the wage rate can be written in an alternative form, more suitable to
understand the underlying argument. Suppose to express all prices and the
wage rate in term of commodity bundle b; substitute equation (1a) into
(1b); by solving with respect to w we obtain:
w
(b)
() =
p
T
(b)
b (1 +)p
T
(b)
()Ab
a
T
0
b
=
1 (1 +)p
T
(b)
()Ab
a
T
0
b
. (10)
As the wage rate and the prot rate are uniform across sectors we see that,
once the numeraire has been chosen, the level of the wage rate in terms
12 [Analysis of distribution
of that numeraire can be calculated, for any given rate of prot, from
the price equation of the industry that produces the numeraire, b, whose
technical coecients are given by vector Ab and by scalar a
T
0
b.
10
Relationships (10) or (11) show the strict interdependence between prices
and distribution. They permit to single out the three phenomena that take
place simultaneously when varies:
(D) change in Distribution: the variation of the wage rate due to the a
change in the distribution of income i.e. due to a dierent way of
dividing of the pie of net income between workers and capitalists ;
(C) change in the value of Capital: the variation of the (relative) value of
capital required to produce the numeraire, p
T
(b)
()Ab or p
T
(i)
()a
i
,
variation due to the change of the whole price system, p
(b)
() or
p
(i)
(), in response to a change in distribution;
(W) Wage-numeraire eect: as the wage rate is expressed in terms of the
numeraire, b or i, part of the variation of w
(b)
or of w
(i)
, in response
to a change in , are caused by the peculiarities of the industry of the
numeraire, i.e. by the necessity to restore the balance in this industry.
Eects (C) and (W) overlap eect (D) which is the main goal of the
analysis of distribution and make it unobservable in isolation. The use
of the standard commodity as numeraire permits to isolate eect (D) from
eects (C) and (W). In fact:
eect (W) is eliminated because as we saw in section 3 the standard
commodity is an invariable measure of value;
10
As a particular case if we want to express all prices and the wage rate in terms of
commodity i we set b = e
i
. The corresponding wage rate-prot rate relationship reduces
to
w
(i)
() =
p
(i)i
(1 + )p
T
(i)
()a
i
a
0i
=
1 (1 + )p
T
(i)
()a
i
a
0i
. (11)
Also in this case we see that the wage rate w
(i)
can be calculated, for any given rate of
prot, from the price equation of the industry that produces the numeraire i. (The tech-
nical coecients involved in this relationship are a
i
and a
0i
but the production processes
of all other basic commodities are however indirectly involved through the vector of prices
at the numerator.)
Analysis of distribution] 13
eect (C) is eliminated as the vector of prices disappears from the
relationship between the wage rate and the prot rate if we use the
standard commodity as numeraire; in fact, if we set b = y

in equation
(1b), that is if we set p
T
(y

)
y

= 1 we obtain
w
(y

)
() =
p
T
(y

)
()y

(1 +)p
T
(y

)
()Ay

a
T
0
y

= (12)
=
1 (1 +)/(1 +R)
R/(1 +R)
, (13)
that is,
w
(y

)
() = 1

R
, (14)
which is the well-known Sraas relationship.
It is easy to see the economic reason why the vector of prices disappears
from the wage-prot relationship. As said before the wage rate, for any
given rate of prot, can be obtained from the price equation of the industry
of the numeraire, that, in this case, is the standard commodity, y

. y

,
by denition, has the property that the various single commodities that
appear in it are represented in the same proportions in the set of capital
goods necessary to produce it, Ay

(from equation (6) we have that y

=
(1+R)Ay

); in other words, the standard commodity and the set of capital

goods necessary to produce it are the same (composite) commodity. Hence
the wage rate, expressed in terms of this commodity, can be calculated
simply by a subtraction between quantities of the same commodity, without
the need to use the price vector to evaluate them.
The economic interest of the result contained in equation (14) is the fact
that the price system p cancels out and disappears from the relationship
between the rate of prot and the wage rate. This nding gives a rigorous
basis to the possibility of treating the problem of distribution of income in-
dependently of the price system.
11 12
It should be noted that prices do not
11
On this see Sraa (1960, Appendix D), Broome (1977), Garegnani (1984) or Lippi
(1998).
12
Analytically this independence of distributive relationships from the price system
can also be seen by comparing our previous systems (8) and (9). System (8) is a fully
interdependent system in p
(b)
and w
(b)
, while system (9) is a causal system, in which,
14 [Analysis of distribution
disappear completely from the problem of distribution: in fact the indepen-
dence of the wage-prot relationship from the price system is obtained if
all prices and the wage rate are expressed in terms of standard commodity.
But this latter does not constitute, in general, the bundle of commodities
consumed by workers, b
w
; when workers spend their wages to buy bundle
b
w
the number of such bundles they can buy turns out to depend on the
price system, that is, the interdependence between prices and distribution
reappears:
w
(b
w
)
=
w
(y

)
p
T
(y

)
b
w
=
1 /R
p
T
(y

)
b
w
.
But by re-writing the above expression in the form
w
(b
w
)
=
_
1

R
_

R
(R )a
T
0
[I (1 +)A]
1
b
w
, (15)
we could see that the use of the standard commodity has permitted to
separate a physical kernel of the distributive relationships (our previous eect
(D)), described by the linear factor of (15), from the complications arising
from the variation of the whole price system (our previous eects (C) and
(W)), described by the non-linear factor of (15).
13
This separation permits
to individuate in analogy to what happens into a one-commodity economy
the physical aspect of the distribution problem for a multi-commodity
economy, notwithstanding prots, wages and outputs must be expressed
in value terms by using the price system. Ricardo caught this point very
clearly, disproving thus the illusion, deriving by the denition of prices as
sum of wages, prots (and rents), that the trade-o between the distributive
variables can be accommodated by suitable variations of prices.
14
(For
further details on this aspect see Garegnani (1984, in particular sections
IIIVII).) These conclusions reect one reconstruction of Ricardos thought.
An alternative line of interpretation is expressed in Porta (1982). I will not
enter into these issues here.
rstly, equation (9b

) determines w
(y

)
, then, given w
(y

)
, equations (9a) determine p
(y

)
.
The notion of causality here used is to be intended in the sense given by Luigi Pasinetti
in Pasinetti (1965)
13
I owe this observation and the analytics to present it to Neri Salvadori.
14
Suitable variations of prices do not break down the trade-o between wages and
prot as any increase of prices would aect at the same time both sides of price equations
(1a), that is either the revenues or the costs of each industry.
Extensions and generalizations] 15
5 Extensions and generalizations
5.1 Plurality of standard commodities
In the second part of the seventies there appear some independent contribu-
tions in which it was proved that, in some cases, the standard commodity is
not the only commodity that makes the relationship between the wage rate
and the prot rate linear.
15
It has been shown (see Miyao (1977), Abraham-
Frois and Berrebi (1978), Bidard (1978)), that under certain circumstances
there exist other composite commodities, that Miyao called generalized s-
tandard commodity, that make the job. Consider the following matrix,
called by Miyao labour prole matrix:
K
(n,n)
=
_

_
a
T
0
a
T
0
A
a
T
0
A
2
.
.
.
a
T
0
A
n1
_

_
.
Miyao (1977, Theorem 3, pp. 158159), proved that each composite com-
modity dened by
y = y

+z o,
where y

is the Sraas standard commodity, is a sucient small scalar

and z satises
Kz = o, (16)
is a generalized standard commodity. Let
r(K) = H( n).
If
H < n. (17)
we can nd up to n H linearly independent vectors z
h
, h = 1, , n H,
satisfying system (16). Thus by choosing suciently small we can build
15
On the faultiness of this way to characterize the standard commodity see our Section
6.
16 [Extensions and generalizations
up to n H generalized standard commodities,
y
h
= y

+z
h
o, h = 1, , n H.
There are two extreme cases. i) H = n: in this case system (16) has only
the trivial solution z = 0 and the Sraas standard commodity is the unique
standard commodity. ii) H = 1: in this case we have n 1 generalized
standard commodities; this latter case corresponds to the assumption of
uniform capital intensity among sectors, and in this case each commodity is
a generalized standard commodity.
The possibility of existence of a plurality of standard commodities is
thus linked to the drop of rank of matrix K. This condition has no prac-
tical interest from the economic point of view, as the elements of K are
given by technology. Notwithstanding as this case has (someway inexplica-
bly) attracted the attention of many economists we could ask whether the
generalized standard commodities y
h
, when they exist, are or not invariable
measure of value. The response is positive. In fact if we use a generalized
standard commodity as numeraire we set:
p
T
y
h
= 1 p
T
y

+p
T
z
h
= 1, h = 1, . . . , n H.
Extensions and generalizations] 17
As it is easy to prove that p
T
z
h
= 0 for h = 1, . . . , n H
16
we have that
p
T
y
h
= 1 p
T
y

= 1,
(1 +)p
T
(y
h
)
A+w
(y
h
)
a
T
0
y

= 1
w =
R
R
h = 1, . . . , n H,
that is, the price system disappears also from the equation that sets the price
of this numeraire, y
h
, at 1. As before in this way the price equation of each
generalized standard commodity does not impose any further constraint on
the variations of the price system in response to changes in . Thus each
generalized standard commodity y
h
is an invariable measure of value.
As a by-product we can observe that there is no dierence in expressing
prices and the wage rate in terms of the Sraas standard commodity y

or
16
Miyao denes the generalized standard commodity as that composite commodity that
makes the wage rate-prot rate relationship linear, that is, that composite commodity y
that satises
w
p
T
(I A)y
=
1
a
T
0
y

1
r
R

. (18)
Miyao (1977, theorem 1, p. 154) proves that equation (18) is equivalent to
a
T
0
A
t
y = (1 + R)a
T
0
A
t+1
y, t = 0, 1, 2, . . . , (19)
hence y
h
= y

+ z
h
satises the following recurrence conditions on labour inputs:
a
T
0
A
t
(y

+ z
h
) = (1 + R)a
T
0
A
t+1
(y

+ z
h
), h = 1, . . . , n H, t = 0, 1, 2, . . . .
Thus we have that
a
T
0
A
t
z
h
= (1 + R)a
T
0
A
t+1
z
h
, h = 1, . . . , n H, t = 0, 1, 2, . . . . (20)
Moreover as Kz = o we have
a
T
0
A
t
z
h
= 0, h = 1, . . . , n H, t = 0, 1, . . . , n 1. (21)
Hence thanks to (20) and (21) we have
a
T
0
A
t
z
h
= 0, h = 1, . . . , n H, t = 0, 1, 2, . . . .
Returning to p
T
z
h
we have:
p
T
z
h
= wa
T
0
[I (1 + )A]
1
z
h
=
= w
+

t=0
a
T
0
A
t
z
h
= 0, h = 1, . . . , n H .
18 [Extensions and generalizations
in terms of the generalized standard commodity y
h
: in fact as p
T
y
h
= 1
p
T
y

= 1, the solutions with respect to prices and to the wage rate of the
two systems
_
p
T
= (1 +)p
T
A+a
T
0
p
T
y
h
= 1
and
_
p
T
= (1 +)p
T
A+a
T
0
p
T
y

= 1
coincide not only in relative terms but also in absolute value. From the
economic point of view it could be objected that this equivalence is only
formal as prices p
(y
h
)
are expressed in terms of commodity y
h
while prices
p
(y

)
are expressed in terms of commodity y

. But as p
T
y
h
= p
T
y

(= 1)
each unit of y
h
can command one unit of y

, hence the equivalence is

substantial.
5.2 Joint production
It is possible to extend our previous conclusions to those cases in which the
introduction of joint production does not raise problems for the existence of
an economic meaningful standard commodity.
Consider a square system (i.e. in which there are as many processes as
many commodities). The standard gross product of the system is dened
by:
Bq = (1 +R)Aq (22a)
a
T
0
q = 1, (22b)
where B is an (n, n) non-negative matrix of outputs of the various processes.
Suppose that system (22) has a real non-negative solution with respect to
q and to R. Let q

be this non-negative vector. The standard commodity

is dened, as usual, as the net product of the standard system:
y

:= (BA)q

= RAq

. (23)
Consider now the system of prices expressed in terms of the standard com-
modity:
p
T
B = wa
T
0
+ (1 +)p
T
A (24a)
p
T
y

= = 1. (24b)
Literature] 19
Equation (24b) entails
p
T
(BA)q

= Rp
T
Aq

= 1 (25)
By combining equations (24a) with equation (24b) we get:
1 = p
T
(BA)q

= wa
T
0
q

+p
T
Aq

.
Thanks to (22b) and (25) the price vector p disappear from equation (24b)
that set the price of numeraire equal to 1 and we yield:
w
(y

)
= 1

R
,
that is,
prices have not to vary in order to restore the balance in the industry
that produces the numeraire; this entails that the composite commod-
ity y

is an invariable measure of value;

prices disappear from the relationship between the wage rate and the
prot rate: this permits to separate the analysis of distribution from
the price system.
6 A quick survey of the literature
The literature that focused upon the standard commodity is enormous. Yet
most part of it has not been very helpful in shedding light on this topic.
In particular it is possible to single out some common misunderstandings
arisen about the standard commodity. As in the previous sections it turns
out to be useful to distinguish whether we are considering aspects involving
the standard commodity within the theory of value or within the analysis
of distribution.
6.1 The standard commodity within the theory of value
The standard commodity within the theory of value is used to isolate
when chosen as numeraire the variations of the price of each commodity i
originating exclusively from the peculiarities of industry i from those arising
from the industry of the numeraire. As said in the Introduction, Sraa does
not provide a satisfactory proof of this property for the standard commodity.
20 [Literature
Almost all those authors that accepted the property of invariance of the
standard commodity limited themselves to re-phrase and in some cases
just to quote what Sraa said in his 21, without any further clari-
cation: see, for example, Napoleoni (1962, sect. 8 and 9), Newman (1962,
sect. IV), Bharadwaj (1963, pp. 14511452), Levine (1974, pp. 875876),
Bacha, Carneiro, and Taylor (1977, pp. 4448), Harcourt and Massaro (1964,
sect. 1).
Only Baldone (1980, pp. 274277), Mainwaring (1984, chap. 7), Kurz
and Salvadori (1993, pp. 121-122, n. 16) and Abraham-Frois and Berrebi
(1989) gave some hints or sketched out a proof of this invariance property,
but they did not clarify the issue satisfactorily.
17
The rest of authors rejected the property of invariance of the standard
commodity considering it as a non-sense (see, for example, Johnson (1962),
Catz and di Ruzza (1978), Flaschel (1986), Woods (1987)).
18
It is worth to see in some details the two main objections raised against
the invariance in value of the standard commodity, as they permit to bring
to light some common misconceptions concerning the requirements that an
invariable measure of value should have to satisfy.
Objection 1 The standard commodity is not an invariable measure of value
since its value obviously expressed in terms of another (composite)
commodity, b, is not constant with respect to .
In fact, if we calculate it we obtain:
p
T
(b)
()y

= w
(b)
()a
T
0
[I (1 +)A]
1
y

;
17
In particular the conclusions reached in Abraham-Frois and Berrebi (1989) are subject
to all criticisms raised by Catz and di Ruzza (1990).
18
It is curious the attitude undertaken by Joan Robinson, that in her book review of
Sraas Production of Commodities considers the standard commodity as an ingenious
and satisfying solution to the problem that ummoxed Ricardo Robinson (1961, p. 10);
subsequently she softens her enthusiasm by saying that Sraa takes great trouble to
provide a foolproof numeraire in which prices can be expressed, but the Keynesian wage
unit serves as well Robinson (1979, p. xx), till to conclude that The denition of the
standard commodity takes up a great part of Sraas argument but personally I have never
found it worth the candle. [...] This is not the unit of value like a unit of length or of
weight that Ricardo was looking for. Robinson (1985, p. 163). An attempt to reconstruct
the Joan Robinsons position on the standard commodity has recently been presented by
Gilibert (1996); see also Porta (1995).
Literature] 21
by developing the inverse in a power series (we can do this for 0 <
) and by using (6) and (7) we have:
p
T
(b)
()y

=
1
a
T
0
[I (1 +)A]
1
b

R
R
.
But, it is not the constancy of the expression p
T
(b)
()y

that qualies
y

as invariable a measure of value; the key element we saw is

the fact that when the standard commodity is chosen as numeraire
the prices of other commodities do not undergo pressures in order to
restore the balance in the industry that produces the numeraire.
19
It is true that, as wages fell [the rate of prot rose, E. B.] such
a commodity [the commodity produced by that industry which
employs the proportion of labour to means of production which
constitutes the borderline between decit industries and surplus
industries E. B.] would be no less susceptible than any other to rise
or fall in price relative to other individual commodities; but we
should know for certain that any such uctuation would originate
exclusively in the peculiarities of production of the commodity
which was being compared with it, and not with its own. (Sraa
1960, p. 18)
Objection 2 The standard commodity is not an invariable measure of value
since the prices of the other commodities, expressed in terms of the
standard commodity, vary when distribution changes.
In fact, in this case, thanks to (9b

), we have:
p
T
(y

)
() =
_
1

R
_
a
T
0
[I (1 +)A]
1
. (26)
19
The misunderstanding of this point seems to be at the basis of some confusion in
Flaschel (1986) criticism: in particular see his comment to his numerical example at p.
590, or later, at p. 593 where he states We already know that 0 = p

q = ... where p

indicates the derivative of vector p with respect to and q indicates, in Flaschels notation,
the output of the industry that satises the Sraas critical proportion. Schefold (1986)
in his reply to Flaschel does not seem himself very clear on this point. On the contrary
Abraham-Frois and Berrebi (1989, p. 127), in order to show the invariance of the standard
commodity, make the same mistake, as they say: Por que la marchandise composite
[y] ait une valeur invariante quand la repartition varie, il faut ed il sut que p
T
y reste
constant quand evolve de 0 `a R, cest-`a-dire que la dierentielle d(p
T
y) soit nulle (my
notation).
22 [Literature
Again, the standard commodity is an invariable measure of value as,
when distribution changes, no pushes for the prices of other commodi-
ties arise from equations (9b), that is, to restore the balance in the
standard commodity industry. But the prices of the other commodi-
ties can vary (or have to vary) to restore the balance in their own
industries. Thanks to the invariance of numeraire y

, equation (26)
just describes the uctuations of prices we are interested in, that is,
those uctuations that arise from the peculiarities of the commodity
which is being measured (Sraa 1960, p. 18).
20
Finally it is to be recalled the view expressed by two eminent mainstream
economists that gave some contributions in linear production theory and its
linkages with Sraan analysis: Edwin Burmeister and Paul A. Samuelson.
According to them the standard commodity is a tool to restore the labour
theory of value (Samuelson) or a generalization of it (Burmeister).
21
But
as they rightly observe that the standard commodity cannot pursue these
20
It is curious to note that this erroneous conception of invariance of the standard
commodity is used on one side by Flaschel and Woods and on another side by Blaug to
maintain opposite conclusions:
Flaschel, in building his equation (5), assumes p = o (see Flaschel (1986, p. 592))
and concludes against the invariance of the standard commodity (Flaschel 1986,
pp. 592595). (Again Schefold (1986), in replying to Flaschel, does not seem to
have caught clearly this error.) Also Woods intends invariance in the same sense; in
fact he considers the Standard Commodity at two distinct rates of prot. When

2
>
1
, w
2
< w
1
and prices constant at p(
1
) (to satisfy Sraas hypothesis) ...
(Woods 1987, pp. 79 and .; our notation; emphasis added) and concludes against
the invariance of the standard commodity.
Blaug, on the contrary, starting on the same notion of invariance concludes in favour
of the invariance of the standard commodity: [i]t is also obvious, at least intuitively,
that an exogenous change in wages unconnected in changes in productive techniques
alters the rate of prot but has no eect on relative prices measured in terms of the
standard commodity for the simple reason that the change alters the measuring rod
in the same way as it alters the pattern of prices being measured. The standard
commodity therefore provides an invariable measure of value (Blaug 1987, p. 436;
emphasis added).
21
Samuelson (1990, p. 271) says: Sraa (1960) establishes the concept of a standard (or
reference) basket of commodities. This helps legitimize Ricardos hankering for a labour
theory of value. Burmeister (1984, p. 83) says: Sraas celebrated contribution was to
invent a dierent labor theory of value by constructing a new wage measure such that
the linearity [... of the prot rate-wage rate relationship, E. B.] remains valid even when
Literature] 23
purposes they conclude for the non-usefulness of the notion of standard com-
modity (Samuelson (1987, p. 456), Samuelson (1990, pp. 271-2), Burmeister
(1980, pp. 9192), Burmeister (1984, pp. 8487)). It is not easy to under-
stand the origin of such interpretation, but there is no evidence in Sraas
work to think that the standard commodity was conceived to restore the
labour theory of value.
6.2 The standard commodity within the analysis of distri-
bution
The standard commodity in the theory of value is used to separate the anal-
ysis of distribution from the theory of value. We have seen in our previous
section 3 that when the standard commodity is used as numeraire, prices dis-
appears from the expression of the wage rate-prot rate relationship before
obtaining it.
This point emerges clearly only from few contributions (see, for exam-
ple, Meldolesi (1966), Pasinetti (1977) Broome (1977) Garegnani (1984) and
Mainwaring (1984)). In general the main point that is presented in explain-
ing the r ole of the standard commodity within the analysis of distribution
is the fact that it when used as numeraire makes the wage rate-prot
rate relationship linear.
22
This statement is formally correct but it is de-
void of any economic content. It does not express the spirit of the Sraas
result. The property of linearity of this relationship is simply a consequence
of the assumption concerning the date in which wages are paid: in system
(1) prices are determined by supposing that wages are paid at the end of
the production process. As proved by Pasinetti (1977, pp. 131132) or
later by Bidard (1991, pp. 38-39) if wages are paid at the beginning of the
production period the price equation becomes
p
T
= (1 +)(wa
T
0
+p
T
A), (27)
and the relationship between the prot rate and the wage rate expressed in
terms of the standard commodity is no longer a straight line but it is an
there is not equal organic composition of capital. A similar view was rstly presented by
Napoleoni (1962, pp. 111112)
22
See, for example, Napoleoni (1962, p. 111), Domined` o (1962, in particular p. 723),
Bharadwaj (1963, p. 1452), Burmeister (1968), Miyao (1977), Abraham-Frois and Berrebi
(1978), Flaschel (1986, p. 591), Samuelson (1987, p. 456) and Samuelson (1990, p. 272)
24 [Literature
equilateral hyperbole:
23
w
(y

)
=
R
R(1 +)
. (28)
The point to stress is that, in spite of its non-linearity, the wage-prot
relationship is obtained independently on the price system (prices cancel out
from its expression); thus it continues to make possible the separation of the
analysis of distribution from the complications arising from the price system.
In fact if we re-express the wage rate w
(y

)
in terms of the commodity bundle
consumed by workers,
w
(b
w
)
=
w
(y

)
p
T
(y

)
b
w
=
R
R(1 +)

R(1 +)
(R )a
T
0
[I (1 +)A]
1
b
w
,
we can isolate as before a factor, (R )/[R(1 + )], which is no more
linear but is independent on prices; thus it describes the physical aspect
of the distribution separately from the complications arising from the price
system.
It is also possible to verify, with a reasoning analogous to that carried
out in our previous section 3, that the standard commodity, y

, continues to
constitute an invariable measure of value also with reguard to price system
(27). In fact, if we consider system
p
T
= (1 +)(wa
T
0
+p
T
A)
p
T
y

= (1 +)(wa
T
0
y

+p
T
Ay

) = 1
and we focuse upon its last equation which is the price equation of the
standard commodity we see that, thanks to equations (6) and (7), it
becomes 1 = (1 +)[w
(y

)
R/(1 +R) + 1/(1 +R)], that is,
w
(y

)
=
R
R(1 +)
.
Again the fact that the vector of price has disappeared from the balance
equation of the industry that produces the numeraire means that the wage
23
By substituting into equation p
T
y

= 1 the price system given by equation (27) we

obtain (1+)(w
(y

)
a
T
0
y

+p
T
Ay

) = 1; thanks to equations (6) and (7) prices disappear

and we obtain relationship (28).
References] 25
component and the value of capital plus prot component compensate each
other for any variation of the distribution. Hence prices need not to vary
in order to restore the balance in the industry of the numeraire. Thus the
standard commodity continues to be an invariable measure of value also
with reference to price system (27).
References
Abraham-Frois, G., and E. Berrebi (1978): Pluralite de marchandises
etalons : existence ed construction, Revue deconomie politique, 88(5),
688712.
(1989): A la recherche de letalon invariable des valeurs, Revue
deconomie politique, 99(1), 123140.
Bacha, E., D. Carneiro, and L. Taylor (1977): Sraa and Classical
Economics: Fundamental Equilibrium Relationships, Metroeconomica,
XXIX(I-II-III), 3953.
Baldone, S. (1980): Misure invariabili del valore e merce tipo, Ricerche
economiche, XXXIV(3-4), 272283.
Bharadwaj, K. R. (1963): Value Through Exogenous Distribution, The
Economic Weekly, 15, 14501453.
Bidard, C. (1978): Sur le syst`eme-etalon de Sraa, Revue deconomie
politique, 88(5), 739745.
(1991): Prix, reproduction, rarete. Dunod, Paris.
Blaug, M. (1987): Classical Economics, in The New Palgrave: a Dictio-
nary of Economics, ed. by J. Eatwell, M. Milgate, and P. Newman, pp.
121131. Macmillan Press, London.
Broome, J. (1977): Sraas Standard Commodity, Australian Economic
Papers, 16(29), 231236, re-printed in Wood J. C. (ed.), Piero Sraa.
Critical Assessments, Vol. III, Routledge, London and New York, pp. 77
82.
26 [References
Burmeister, E. (1968): On a Theorem of Sraa, Economica,
XXXV(137), 8387.
(1980): Critical Observations on the Labour Theory of Value
and Sraas Standard Commodity, in Quantitative Economics and De-
velopment Essays in Memory of Ta-Chung Liu, ed. by L. R. Klein,
M. Nerlove, and S. C. Tsiang, pp. 81103. Academic Press, New York.
(1984): Sraa, Labor Theories of Value, and the Economics of
Real Wage Rate Determination, Journal of Political Economy, 92(3),
508526.
Catz, F., and F. di Ruzza (1978): Questions sur la pertinence du
choix de normes dans les relations salaires-prot et accumulation-
consommation, Revue deconomie politique, 88(5), 770773.
(1990): Letalon: un non-sens qui a la vie dure!, Revue
deconomie politique, 100(2), 305310.
Domined` o, V. (1962): Una teoria economica neo-ricardiana, Giornale
degli economisti e annali di economia, XXI(11-12), 710731.
Flaschel, P. (1986): Sraas Standard Commodity: No Fulllment of
Ricardos Dream of an Invariable Measure of Value, Journal of Insti-
tutional and Theoretical Economics, 142(3, September), 588602.
Garegnani, P. (1984): Value and Distribution in the Classical Economics
and in Marx, Oxford Economic Papers, 36(2), 291325.
Gilibert, G. (1996): Joan Robinson, Piero Sraa and the Standard Com-
modity Mystery, in The Economics of Joan Robinson, ed. by M. C. Mar-
cuzzo, L. L. Pasinetti, and A. Roncaglia, pp. 121131. Routledge, London.
Harcourt, G. C., and V. G. Massaro (1964): Mr. Sraas Production
of Commodities, The Economic Record, 40, 442454.
Johnson, H. G. (1962): Review of Production of Commodities by means
of Commodities, The Canadian Journal of Economics, 28(3), 464466.
Kurz, H. D., and N. Salvadori (1993): The Standard commodity and
Ricardos Search for an Invariable Measure of Value, in The Dynamics
References] 27
of the Wealth of Nations Growth, Distribution and Structural Change
Essays in Honour of Luigi Pasinetti, ed. by M. Baranzini, and R. Scazzieri,
pp. 95123. Macmillan, London.
(1994): Theory of Production A Long-Period Approach. Cam-
bridge University Press, Cambridge.
Levine, A. L. (1974): This Age of Leontief ... and Who? An Interpreta-
tion, The Journal of Economic Literature, XII(3), 872881.
Lippi, M. (1998): Standard Commodity, in The Elgar Companion to
Classical Economics, ed. by H. D. Kurz, and N. Salvadori, pp. 410414.
Edward Elgar, Cheltenam, UK, Northampron, USA.
Mainwaring, L. (1984): Production. Cambridge University Press, Cam-
bridge.
Meldolesi, L. (1966): La derivazione ricardiana di Produzione di merci
a mezzo di merci, Economia internazionale, XIX(4), 612638.
Miyao, T. (1977): A Generalization of Sraas Standard Commodity and
Its Complete Characterization, International Economic Review, 18(1),
151162.
Napoleoni, C. (1962): Sulla teoria della produzione come processo circo-
lare, Giornale degli economisti e annali di economia, XX(1-2), 101117,
English transl. An Essay on the Theory of Production as a Circular Pro-
cess in Pasinetti L. L. (ed.) Italian Economic Papers, 1, pp. 251264, Il
Mulino, Bologna, Oxford University Press, Oxford, 1992.
Newman, P. (1962): Production of Commodities by means of Commodi-
ties, Schweizerische Zeitschrift f urVolkswirtschaft und Statistik, XCVIII,
5875.
Pasinetti, L. L. (1965): Causalit` a e interdipendenza nellanalisi econo-
metrica e nella teoria economica, in Annuario dellUniversit` a Cattolica
del Sacro Cuore, pp. 233250. Vita e Pensiero, Milano.
(1977): Lectures in the Theory of Production. Macmillan, London.
28 [References
(1981): Structural Change and Economic Growth A Theoretical
Essay on the Dynamics of the Wealth of Nations. Cambridge University
Press, Cambridge.
(1993): Structural Economic Dynamics: A Theory of the Economic
Consequences of Human Learning. Cambridge University Press, Cambrid-
ge.
Porta, P. L. (1982): I fondamenti ricardiani del marxismo, Giornale
degli economisti e annali di economia, XLI(1112), 721739.
(1995): Joan Robinson and Piero Sraa, Rivista internazionale
di scienze economiche e commerciali, 42(9), 681689.
Ricardo, D. (1817): On the Principles of Political Economy and Taxation.
John Murray, London, used edition: On the Principles of Political Eco-
nomy and Taxation, Vol. 1 of Sraa Piero (ed.) The Works and the Cor-
respondences of David Ricardo, Cambridge University Press, Cambridge,
1951.
Robinson, J. V. (1961): Prelude to a Critique of Economic Theory, Ox-
ford Economic Papers, XIII, 5358, re-printed in Robinson Joan, Collected
Economic Papers, Blackwell, Oxford, Vol. III, pp. 714 (used edition).
(1979): The Generalisation of the General Theory and other Essays.
Macmillan, London.
(1985): The Theory of Normal Price and Reconstruction of Eco-
nomic Theory, in Issues in Contemporary Macroeconomics and Distri-
bution, ed. by G. R. Feiwel, pp. 157165. Macmillan, London.
Samuelson, P. A. (1987): Sraan Economics, in The New Palgrave: a
Dictionary of Economics, ed. by J. Eatwell, M. Milgate, and P. Newman,
pp. 452461. Macmillan Press, London.
(1990): Revisionist Findings on Sraa, in Essays on Piero Sraa,
ed. by K. R. Bharadwaj, and B. Schefold, pp. 263279. Unwin Hyman,
London.
References] 29
Schefold, B. (1986): The Standard Commodity as a Tool of Economic
Analysis: A Comment, Journal of Institutional and Theoretical Econo-
mics, 142(3), 603622.
Sraffa, P. (1960): Production of Commodities by means of Commodities
Prelude to a Critique of Economic Theory. Cambridge University Press,
Cambridge.
Woods, J. E. (1987): Sraas Critical Proportion and the Standard Com-
modity, Economic Notes, X(2), 6066, re-printed in Wood J. C. (ed.),
Piero Sraa. Critical Assessments, Vol. III, Routledge, London and New
York, pp. 7782 (the references are made on this edition).