The determination of the absolute value of a good is a primary need of each individual, and is historically at the basis of economic theory.
David Ricardo, in the Essay on the Low Price of Corn on the Profits of Stock of 1815 (Ricardo, 1951b, p.9), writes, “Wherever competition can have its full effect, and the production of commodity be not limited by nature, as is the case with some wines, the difficulty or facility of their production will ultimately regulate their exchangeable value”. “The ‘difficulty’ or ‘facility’ of production is judged on the basis of the amount of labour required,” summarizes Fernando Vianello on page XVI of his Italian Introduction to Ricardo’s On the Principles of Political Economy and Taxation (1976). “If commodities are exchanged in proportion to the labour embodied, a commodity always produced by the same quantity of labour meets the requirements of a perfect measure of value” (Vianello, 1976, p. XVIII). Therefore in Ricardo, “The ‘absolute value’ of a commodity always produced by the same quantity of labour is invariable – even though its ‘exchange value’ or ‘relative value’ may change – in the sense that the commodity itself is not subject to that sole cause of variation of the value that acts on other commodities: the variation in the quantity of labour required for their production.” (Vianello, 1976, p. XVIII).
Ricardo’s labour theory of value made it possible – both in the early 19th century and today – to give clear solutions to the role of money (Vianello, 1976, p. XVIII) and rent (Vianello, 1976, p. XXII).
In Italy the lesson of classical economists, combined with the lesson of Schumpeter, was reworked by Sylos Labini both to provide an innovative answer to the theoretical problems of economic analysis (Sylos Labini, 1956) and to offer a direct study tool for the country’s industrial transformations from the 1960s up to today (Sylos Labini, 1972).