8
Now Aq* = A Iq* from (5)
so that we have
R
1 + R
I q*
( 10 )
as an expression for the net product in terms of standard commodity•
Since the unit of standard commodity has been linked to the amount of
direct labour used in the economy, we can also define the net product in
terms of labour as
1 + R
To get a measure in terms of money value we have to introduce a price
vector. We are, in principle, free to choose any price system we want,
the essential properties of the standard commodity being preserved in
whatever terms of money we express it.
For example, we may choose the prices corresponding to the maximum rate
of profit p* (the left hand eigen vector of A). We obtain the net
product in terms of p* prices, which, following Sraffa, we equate to
unity making it thereby the unit of the pricing system:1)
p* 1 (I - A ) q*
(12 )
It will be noted that the non-basics do not explicitly occur in this
product, because A refers only to basics. The non-basics are taken
account of by the equation (1a) which allocates the total labour of the
original system (which contains the non-basics) to the basics only. That