Every man, therefore, would early endeavour to keep by him, besides the produce of his own industry, a certain quantity of some commodity such as other people will be likely to take in exchange for the produce of their particular industries. Cattle, for example, have been widely used for this purpose in primitive societies, and Homer speaks of a suit of armour costing a hundred oxen. The value of commodities thus comes to be expressed in terms of coinage. What is bought with money or with goods is purchased by labour as much as what we require by the toil of our own body. Labour alone, 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 in all places, be estimated and compared.
Several elements enter into the price of commodities.
In a nation of hunters, if it costs twice the labour to kill a beaver which it costs to kill a deer, one beaver will be worth two deer. So far the whole produce of labour belongs to the labourer. But as soon as stock has accumulated in the hands of particular persons, some of them will employ it in setting to work industrious workmen, whom they will supply with materials and subsistence, in order to make a profit by the sale of their work. There is also in every society or neighbourhood an ordinary or average rate of rent, which is regulated, too, by the general circumstances of the society or neighbourhood in which the land is situated, and partly by the natural or improved fertility of the land. What we may call the natural price of any commodity depends upon these natural rates of wages, profit and rent at the place where it is produced.