Note 32 — Chapter II · ADAM SMITH’S PHILOSOPHICAL OR PRIMITIVE ACCOUNT OF VALUE.

P. 36. The following passage (p. 38) exhibits perfectly Smith’s general theory of the relation of labor, the precious metals, and grain to value as a dynamic problem. “Labour, therefore, it appears evidently, is the only universal as well as the only accurate measure of value, or the only standard by which we can compare the values of different commodities at all times and at all places. We cannot estimate, it is allowed, the real value of different commodities from century to century by the quantities of silver which were given for them. We cannot estimate it from year to year by the quantities of corn. By the quantities of labour we can, with the greatest accuracy, estimate it both from century to century and from year to year. From century to century corn is a better measure than silver, because from century to century equal quantities of corn will command the same quantity of labour more nearly than equal quantities of silver. From year to year, on the contrary, silver is a better measure than corn, because equal quantities of it will more nearly command the same quantity of labour.”