Where is the Labor Theory of Value in Adam Smith? Adam Smith’s Value Theory Revisited.

Abstract

Often commentators follow David Ricardo in looking, especially, at Chapters V and VI of Book I of Adam Smith’s Wealth of Nations as the place to find his theory of value. And most commentators attribute to Adam Smith some versions of a labor theory of value. But in those chapters, Smith is looking for a stable unit of measurement of value and the reservation price of bringing goods to market. We thus suggest that the labor theory of value in Smith is a Ricardian construct, not a Smithian one.

Keywords: Adam Smith, David Ricardo, Labor Theory of Value, Money, Mercantilism

JEL Classification: B12, D33, D46, P42, P44.