An Inquiry into the Nature and Causes of the Wealth of Nations

by Adam Smith

and which it can impose upon o...

It was not by gold or by silver, but by labour, that all the wealth of the world was originally purchased;

The exchangeable value of every thing must always be precisely equal to the extent of this power which it conveys to its owner.

The time spent in two different sorts of work will not always alone determine this proportion. The different degrees of hardship endured, and of ingenuity exercised, must likewise be taken into account.

But it is not easy to find any accurate measure either of hardship or ingenuity.

Hence it comes to pass, that the exchangeable value of every commodity is more frequently estimated by the quantity of money, than by the quantity either of labour or of any other commodity which can be had in exchange for it.

so a commodity which is itself continually varying in its own value, can never be an accurate measure of the value of other commodities.

Labour alone, therefore, never varying in its own value, is alone the ultimate and real standard by which the value of all commodities can at all times and places be estimated and compared. It is their real price; money is their nominal price only.

In this popular sense, therefore, labour, like commodities, may be said to have a real and a nominal price.

Its value would in this case be liable to variations of two different kinds: first, to those which arise from the different quantities of gold and silver which are contained at different times in coin of the same denomination; and, secondly, to those which arise from the different values of equal quantities of gold and silver at different times.

diminution,

supposition,

college leases

But since the reign of Philip and Mary, the denomination of the English coin has undergone little or no alteration,

degradation

diminution

the real price of labour,

is very different upon different occasions; more liberal in a society advancing to opulence, than in one that is standing still, and in one that is standing still, than in one that is going backwards.

Every other co...

w...

purchase a greater or smaller quantity of labour, in proportion to the q...

Though the real value of a corn rent, it is to be observed, however, varies much less from century to century than that of a money rent, it varies much more from year to year.

The money price of labour,

does not fluctuate from year to year with the money price of corn, but seems to be everywhere accommodated, not to the temporary or occasional, but to the average...

The a...

price of...

is regu...

by the value of s...

richness or barrenness of...

supply the market with that metal, or by the quantity of labour which must be employed, and consequently ...

for example, from five-and-twenty to fifty shillings the quarter. But when corn is at the latter price, not only the nominal, but the real value of a corn rent, will be double of what it is when at the former, or will command double the quantity either of labour, or of the greater part of other commodities;

Labour,

is the only universal,

commodities,

We cannot estimate,

the real value of different ...

by the quantities of silver which were g...

By the quantities of labo...

estimate it, both from century to century, and fr...

leases,

distinguish between real and nominal price;

nominal price

money is the exact measure of the real exchangeable value of all commodities.

Though at distant places there is no regular proportion between the real and the money price of commodities,

If a London merchant, however, can buy at Canton, for half an ounce of silver, a commodity which he can afterwards sell at London for an ounce, he gains a hundred per cent.

it is the nominal or money price of goods,

which

determines the prudence or imprudence of all purc...

may

be of use to compare the different real values