A New Paradigm for the Determination of Money Prices

Abstract

Classical economists thought that goods had a value-dimension and were accordingly measured in units of value, e.g. in units of labour-value. Physicists measure space, time, energy and mass. In Classical economics the fundamental problem of the definition of economic value is already raised: are goods measured in some objective dimension, like energy or mass? Within the Classical school it was possible to make direct statements about quantities of value, in a given system of numeration, because each indivisible commodity was regarded as embodying units of cost defined in terms of its production by labour. When David Ricardo refers to a correspondence between two classes of objects, namely com?modities and numbers, he never posits an equivalence of the following type: