ABSTRACT
An object or an activity is an ‘economic entity’ only if it has power to attract something in exchange. Thus it is fundamental for economics to understand how an object or an activity acquires exchange-value. The theories of value of heterodox economic traditions are rooted in classical political economy, which takes up this problem only with respect to commodities that are reproducible as they considered only those to be important in understanding an economic system. The classical economists were fundamentally interested in finding out the essential cause that gives rise to the exchange-value of commodities. The problem of exchange-value, however, also immediately raises the question of the scale by which it can be measured. As we shall see, the problem of the ultimate cause of value in the classical tradition gets entangled with the question of the scale of its measure—the cause must explain the change in value but at the same time must not affect the scale by which the change is measured. In this chapter we discuss three major developments in the history of value theory in heterodox economic traditions. First we discuss the problem as set up by Adam Smith, then criticized and developed by Ricardo and Marx and subsequently reconstructed by Sraffa, whose reconstruction removes the notion of equilibrium from the theory of value, which makes it most compatible with all hues of heterodox economics.
