An inquiry into the nature and causes of the wealth of

32

The Wealth of Nations

of other men’s labour, or, what is the same thing, of the produce of

other men’s labour, which it enables him to purchase or command.

The exchangeable value of every thing must always be precisely

equal to the extent of this power which it conveys to its owner.

But though labour be the real measure of the exchangeable value

of all commodities, it is not that by which their value is com-

monly estimated. It is often difficult to ascertain the proportion

between two different quantities of labour. The time spent in two

different sorts of work will not always alone determine this pro-

portion. The different degrees of hardship endured, and of inge-

nuity exercised, must likewise be taken into account. There may

be more labour in an hour’s hard work, than in two hours easy

business; or in an hour’s application to a trade which it cost ten

years labour to learn, than in a month’s industry, at an ordinary

and obvious employment. But it is not easy to find any accurate

measure either of hardship or ingenuity. In exchanging, indeed,

the different productions of different sorts of labour for one an-

other, some allowance is commonly made for both. It is adjusted,

however, not by any accurate measure, but by the higgling and

bargaining of the market, according to that sort of rough equality

which, though not exact, is sufficient for carrying on the business

of common life.

Every commodity, besides, Is more frequently exchanged for,

and thereby compared with, other commodities, than with labour.

It is more natural, therefore, to estimate its exchangeable value by

the quantity of some other commodity, than by that of the labour

which it can produce. The greater part of people, too, understand

better what is meant by a quantity of a particular commodity,

than by a quantity of labour. The one is a plain palpable object;

the other an abstract notion, which though it can be made suffi-

ciently intelligible, is not altogether so natural and obvious.

But when barter ceases, and money has become the common

instrument of commerce, every particular commodity is more fre-

quently exchanged for money than for any other commodity. The

butcher seldom carries his beef or his mutton to the baker or the

brewer, in order to exchange them for bread or for beer; but he

carries them to the market, where he exchanges them for money,

and afterwards exchanges that money for bread and for beer. The

quantity of money which he gets for them regulates, too, the quan-

tity of bread and beer which he can afterwards purchase. It is more

natural and obvious to him, therefore, to estimate their value by

the quantity of money, the commodity for which he immediately

exchanges them, than by that of bread and beer, the commodities

for which he can exchange them only by the intervention of an-

other commodity; and rather to say that his butcher’s meat is worth

three-pence or fourpence a-pound, than that it is worth three or

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33

Adam Smith

four pounds of bread, or three or four quarts of small beer. 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.

Gold and silver, however, like every other commodity, vary in

their value; are sometimes cheaper and sometimes dearer, some-

times of easier and sometimes of more difficult purchase. The

quantity of labour which any particular quantity of them can pur-

chase or command, or the quantity of other goods which it will

exchange for, depends always upon the fertility or barrenness of

the mines which happen to be known about the time when such

exchanges are made. The discovery of the abundant mines of

America, reduced, in the sixteenth century, the value of gold and

silver in Europe to about a third of what it had been before. As it

cost less labour to bring those metals from the mine to the mar-

ket, so, when they were brought thither, they could purchase or

command less labour; and this revolution in their value, though

perhaps the greatest, is by no means the only one of which history

gives some account. But as a measure of quantity, such as the natural

foot, fathom, or handful, which is continually varying in its own

quantity, can never be an accurate measure of the quantity of other

things; so a commodity which is itself continually varying in its

own value, can never be an accurate measure of the value of other

commodities. Equal quantities of labour, at all times and places,

may be said to be of equal value to the labourer. In his ordinary

state of health, strength, and spirits; in the ordinary degree of his

skill and dexterity, he must always lay down the same portion of

his ease, his liberty, and his happiness. The price which he pays

must always be the same, whatever may be the quantity of goods

which he receives in return for it. Of these, indeed, it may some-

times purchase a greater and sometimes a smaller quantity; but it

is their value which varies, not that of the labour which purchases

them. At all times and places, that is dear which it is difficult to

come at, or which it costs much labour to acquire; and that cheap

which is to be had easily, or with very little labour. 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.

But though equal quantities of labour are always of equal value

to the labourer, yet to the person who employs him they appear

sometimes to be of greater, and sometimes of smaller value. He

purchases them sometimes with a greater, and sometimes with a

smaller quantity of goods, and to him the price of labour seems to

vary like that of all other things. It appears to him dear in the one

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