Theory of international value

This is a comment added to Susumu Takenaga's paper Ricardo's Theory on Foreign Trade https://www.researchgate.net/publication/352297094_Ricardo's_theory_on_foreign_trade As italic and bold styles are not usable there, it may not be very readable. I reproduce it here as my private report. As the title tells, this explains quickly how various papers of mine is related with each other. This may serve as a short guide for the new theory of international trade that can treat Global Value Chains on the extended line of David Ricardo.

The principal theorem of the new theory of international values for a Ricardo-Sraffa trade economy is presented and then illustrated using a two-country, two-commodity model and a two-country, three-commodity model. It is shown that the classical vision of values as independent of demand is preserved, even when international trade takes place. In other words, values are mainly determined by costs of production or, ultimately, by technology. The values are, however, not determined uniquely, and demand plays a role in selecting a set of values from among those that are admissible under present technology and mark-up rates. Three different production possibility frontiers are introduced: R-efficient locus, physical maximal frontier and capitalistically feasible frontier. It is argued that distinguishing among these three frontiers is necessary in order to comprehend the role of demand in determining international value. Lastly, the similarity of this relation of value and demand to that of rent theory is pointed out.