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Show 530 SU~fl\fARY . PA Gl~ Cattle were u ed for this purpose an1ong pa toral nations, on account of the facility of keeping them, and of the frequent , change of which they mu t hav been the subject 55 J t is neces:sary that the c01nmodity adopted for the medium of exchange and mea ure of value should be in frequent u e, and its value well! nown 56 Notwithstanding the peculiar aptitude of the precious metals for a mediu1n of exchange and tneasure of value, they had not been u ed for that purpo c in l\1e_,.ico when first di ~ covered ib. In the old \Vorld, where the arts of s1nclting and refining ores seem to have been know·n at a very re1note period, the appropriate qualities of the preciou m tal pointed them out in the em·lie t times a the commodity bet fitted for a me-dium of exchange and measur of alue 57 ' Vben they had been adopted as a general mea ure of value, they would almo t always be the article nan1ed, and the quantity of the precious 1netal for which commoditjcs would exchange, might properly be called their nominal value . ib. This nominal value has b en 01netin1es d si gnated by the tenn price, which thus represent. a n1ore confined sense of the tenn value . .58 The introduction of a measure of nominal and relative value, ·was a step of the highest i1nportance in the progress of society ib. It is the nominal value of goods, or their prices only, which the merchant ha occasion to con .. ider . . . ib. But the precious metals completely fail as a n1easure of the exchangeable value of objects in different countries, or at different periods . 59 Nominal wages and incomes alone, without ftuther infonnation, will not enable us to judge whether they are good or bad . . . . . . . ib. We want some estimate of a nature which may b~ called real value in exchange, implying the quantity of the necessaries and conveniences of life which n01ninal wages and incomes will enable us to command . . . 60 ~Ul\l..t.\ RY. 531 A correct measure of l'eal value in exchange, a thus de cribed PAGE though very desirable, is not attainable. All that can b: hoped for is, an approximation to it . . . . . . . . 60 We ar: .not justified, on thi account, in giving a different definitiOn of real value in exchange, so as to confound the important di tinction between co t and value 61 There is no otl1er meaning of value, jn additim~ to. v~lue. in. use, but what relate to exchange . . . . . . . ·. . ib. T~e distinction between real and nominal value in exchange, Is absolutely necessary in comparing the wealth of two nations. tog~t~er, or in estimating the value of the precious metals 111 different places and times . . . . . . . . ib, There are then three sorts of value ; -1. value in usc, or the utility of an object. 2. Non1inal value in exchange, or value in money. 3. Real value in exchange, or value in neces-saries, conveniences and labour 62 These distinctions are in the n1ain thos~ of. Acia~ S1~iti1 ~nd. J belong to his system . 'b 1 . --- SEcT. 11.-0f Demand and Suppl.!J as they affect E.t:changeable Value. \The terms, demand and supply, though in constant use, are not applied with precision. It is necessary, therefore, on account of their universal influence, to clear the ground on this part of the subject before we proceed farther Demand may be defined to be, the will combined with the power to purchase; and supply, the production of commodities combined with the intention to sell them. , There is no instance of a change of price, but what may be traced to some causes which affect the demand or supply . . . . It must be remembered, that prices are determined, not by the demand alone, or the supply alone, but by their relation to each other . In one sense of the terms, detnand may be said to be always equal to supply, but it is not in this sense in which they determine prices . 'l,he more of the will and power to purcha~e exists, ·with regard to any particular co,mmodity, the greater or more intense is the demand for it • ;t 63 64 65 ib. 66 |