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Show 8·-1 ON THE NATURE AND [ CH. II. the price which is necessal'y to fulfil the conditions of a regtllar supply. . . . When a commodity is sold at tlns Jts. na~mal price, Adam Smith says, it is sold for preC'lsely what it is worth. But here, I think, he has ~s~d the tern1 \vorth in an unusual sense. Comtnodtttes are continually said to be worth more than they have cost; ordinary profits included; and according to the. customary and prc;}per use ~f the te~m 'ti.Wrth, we~ could never say, that a certan1 quanttty of corn, or any other article, \Vas not 'vorth n1ore \vhen it \vas scarce, although- no n1ore labour and capital might have been employed abmtt_t it. T~1e worth of a cornn1odity is its n1arket pnce, not 1ts natural or necessary price; it is its value in exehano ·e not i'ts cost; and this is. one of the instances in' wl1i~h .A. dam Stnith has n0t been sufficiently careful to keep thetn separate.* But if it appear generally that the cost of.p.ro-dnction t>nly t:letern1ines the prices of con1m.o?1ttes,. as the payn1ent of it is the necessary cond1t1on ~f their supply, and that the con1ponent parts of this cost are then1selves detern1ined by the san1e causes which detern1ine the whole, it is obvious that ,;ve cannot get rid of the principle of den1and and supRly by referrin<Y to- the cost of production. Nat ural and b 1. necessary prices appear to be regulated by t 11s principle, as well as tnarket prices ; and the only difference is, that the former are regulated by the ordinary and average relation of the demand to the supply, and the latter, when they differ fron1 the * Book I. chap. vii. SEC. III.] J\IEA·SURES OF VA ~UE. 85 former; depend upon .the extraordinary and acci. dental re.1ations of the den1and to the suppl,y. SECTION IV. OJ .. .the Labour.whiclt a Cornmodity has Cost considered as :a Measure of Exchangeable f7a!ue. Adatn Sn1ith, 'in his chapter on the real and n0- minal price of con1nlodities;* in ,vbich he cons-iders 'labour as an universal and accurate n1easure of value, has introduc.ed .son1c confusion into his inquiry by not adherino· strictly· to the ·San1e n1ode 1 b of applying the labour wl~ich 'he proposes for .a measure. ·so1netimes he speaks of the value of a cotn111o .. clity as being detern1ined by the quantity of labour which its .production has cost, and sornetirnes by the quantity of labour \vhich it ·\v-ill con1mand i-n .exchange. 'These two measures are essentially different ·; and, though certainly neither of them can con1e under the description of a standard, one of then1 is a veTy tnuch n1ore useful and accurate n1easure of v·alue than the other. • When we consider the degree in which labour JS ~fitted to ·be a measure of value in the first sense used by Adan1 Sn1ith, that is, in reference to the · ~uantity o~ labour which a comn1odity ·has cost in Jts production, we shall find it radically defective.- * Book I. chap. v. GS |
