Book I, Chap. 5a: the Real (Toil & Trouble) and Nominal (Money) Price of Commodities

Shortened by: Juan


Translator's note: I've noticed the core of the misunderstanding of Smith's Labour Theory of Value is the ambiguity of the word 'labour', so I replace it with 'toil and trouble' to equate it more to psychology, emotions, and subjectiveness, instead of physical force or objectiveness. Toil and trouble is more related to suffering and non-suffering. A link to the original translation with the word 'labour' will be posted in the bottom.


Toil and Trouble Is The Real Measure of Exchangeable Value


1 A person's wealth depends on the degree by which he can afford to enjoy the necessaries, conveniencies, and amusements of human life.

2 The real price of everything is:

What we buy with money or goods is bought by our work through our toil.

3 Mr. Hobbes says that wealth is power.

4 However, we do not estimate the exchangeable value of commodities in terms of work because it is difficult to do so.

5 Every commodity is frequently and more naturally exchanged for other commodities than with labour.  

Metals As A Measure Of Toil and Trouble

6 When money becomes the common instrument of trade, every commodity is more frequently exchanged with it.
no-spend
7 However, metal money also vary in their value.   8 Although a worker's toil and trouble has always the same value to the himself, its value may vary to his employer.   9 Toil and trouble, like commodities, has a real price and a nominal price.   10 Real price is always the same.
corn
11 The amount of pure metal in the coins of all nations has been almost continually decreasing.   12 The discovery of American mines reduced and will continue to reduce the value of gold and silver in Europe for a long time.   13 The rents reserved in corn have preserved their value much better than those reserved in money, even where the denomination of the coin has not been altered.   14 If the degradation in a metal's value is combined with the reduction of its amount in the same coin, the loss is still greater.
Next: Book 1, Chapter 5b: Corn vs Silver
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