The independent. [volume] (Lincoln, Neb.) 1902-1907, 1903-02-12

l
cause of value, namely labor or scare
ity. Adam Smith had said 'The
value of any commodity to the per-
son who possesses 1t, and who means
| not to use it or consume it himself,
| but TO exchange 1t for other eommod-
| tiles, is equal to the quantity of labor
| which it enables him to purchase or
command"
Labor" says Smith, sis the real
measure of the exchangeable value Of
all commodities"
Then we read from Smith as fol-
lows: THE real price of everything
:. is the toll and trouble of aequir-
ing it. What everything is really
worth to the man who has acquired
it, and who wants to dispose of it or
exchange it for something else, is the
toll and the trouble which it can
save to himself, and which it can inn
pose upon other people. What is
bought with money or with goods Is
purchased by labor, as much as what
we acquire by the toll of our own
body. That money or those goods in
deed save us this toll. . Labor was
the first price, the original purchase
money that was paid for all things.
1t was not by gold or by silver, but
by labor, that all the wealth of the
world was originally purchased; and
its value to those who possess it, and
who want to exchange it for new pro-
ductions, is precisely equal to the
quantity of labor which it can enable
them to purchase"
| am quoting from the 5th chapter
Of the Wealth of Nations by Adam
Smith, which chapter is entitled "Of
the real and nominal price of COM
modities, or of their price in labor,
and their price in money" He
takes the ground that labor is the
real measure of value" You notice
he does not say standard of value"
a phrase we use so much in modern
times He is looking for something
that will serve as measure of value;
and this something he concludes, must
be commodity that is the product Of
labor. He argues that although la
Dor is the real measure of value"
yet labor cannot be used in everyday
life as a measure. On this point he
says: Every commodity is more
frequently exchanged for, and there
by compared with, other commodities
than with labor. 1t is more natural
therefore to estimate it's changeable
value by the quantity of some other
commodity than by that of the labor
which it can purchase. The greater
part of people, too, understand better
what is meant by quantity of par
ticular commodity, than by guam
tity of labor. The one is a plain and
palpable object; the other an abstract
notion which, though it can be made
sufficiently ineligible, is not alto
gethcr so natural and obvious"
Exchanges of labor for labor takes
place in the infancy of society. Af-
terwards the people begin to exchange
commodities for commodities. This is
barter in it's advanced stage After
wards the community finds that there
is some one commodity which is uni
Versally useful and which everybody
wants. Then those who have more
! Of any one commodity than they can
use themselves, begin to exchange it
for that one commodity which every
body wants. This one single COM
modify is called money, and those
who have a superfuity of one or more
! commodities, begin to exchange them
for the commodity called money This
commodity becomes acceptable, first,
because taxes can be paid with it;
secondly, because damages adjudged
to be paid by the courts, can be paid
thereby; third, fines and all penalties
can be paid thereby; fourth, rents
are discharged thereby. What the
landlord and. government will accept
for rent and taxes the merchant,
manufacturer and labor will accept
for their goods and labor.
Smith insists that although labor is
the real price" of commodities, yet
money is the nominal price" of COM
modities. His idea is, that money
(gold or silver gets its value from
the quantity Of labor necessary to
mine and bring these commodities to
market. In this respect both Ri
cardO and Smith agree. This, however,
is a disputed point. Undoubtedly the
value of gold and silver ought to de-
pend upon the quantity of labor nee
essary to mine and bring them to
market But nations are NOT doino