Adam Smith, one of the foremost proponents of laissez-faire economics and free trade, has often been credited with the transformation of economics into an academic discipline. The argument, as presented, maintains that prior to the publication of his Inquiry into the Nature and Causes of the Wealth of Nations the study of economics adhered to neither a defined school nor an established methodology (Buchan, 2007). Smith, according to Buchan (2007), did not simply found a school of economic thought but he established economics as a field of academic inquiry. The veracity of the aforementioned is amply evidenced, not only in the fact that Smith is still being studied and debated today but, in the fact that his economic treatise, as expressed in his Inquiry, effectively instigated a substantial amount of reactionary literature and, indeed, served as that which other economists, including Ricardo and Marx, south to refute in their own works (Buchan, 2007). The implication here is, therefore, that Smith incited an economics debate which gave rise to the field as we know it today. Within the context of the stated, Adam Smith's Inquiry into the Nature and Causes of the Wealth of Nation, assumes singular importance. The mentioned work was concerned with a number of problems and issues, central of which was to inquire into the nature and causes of wealth. The purpose of this essay is to consider the essential ideas which Smith claimed or proposed concerning "value" and try to understand their place in his inquiry into the nature and causes of the wealth of nations, alongside the presentation of critical opinions voiced by a number of economists and scholars.
After observing that "The word 'value' has two different meanings, and sometimes expresses the utility of some particular object, and sometimes the power of purchasing other goods which the possession of that object conveys" - which he respectively calls "value in use" and "value in exchange" - and then noting that "things which have the greatest value in use have frequently little or no value in exchange" - and counterwise, "those which have the greatest value in exchange have frequently little or no value in use" (Smith, 28), he goes on to observe:
Every man is rich or poor according to the degree in which he can afford to enjoy the necessaries, conveniences and amusements of human life. But after the division of labour has once thoroughly taken place, it is but a small part of these with which a man's labour can supply him. The far greater part of them he must derive from the labour of other people, and he must be rich or poor according to the quantity of that labour which he can command, or which he can afford to purchase (Smith, 30).
From these, he infers that "the value of any commodity, therefore, to the person who possesses it, and who means not to use or consume it himself, but to exchange it for other commodities, is equal to the quantity of labour which it enables him to purchase or command," in which case, "labour, therefore, is the real measure of the exchangeable value of all commodities" (Smith, 30).
The idea that labour is the "real measure" of value and that the value of a commodity to a person ("who means not to consume it") is equal to the quantity of labour which it can command are of central importance in Smith's Inquiry. This "labour commanded" view - one among several of the "dimensions" of meaning of the term "value" which Smith distinguished and explicated - is quite intimately related to what may be termed the "objective-instrumental" view. As Smith later wrote:
The power which that possession immediately and directly conveys to him, is the power of purchasing; a certain command over all the labour, or over all the produce which is then in the market. His fortune is greater or less, precisely in proportion to the extent of this power; or to the quantity either of other men's labour, or, what is the same thing, of the produce of other men's la