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It has been said that one finds in Adam Smith nearly all theexplanations of value which have ever been attempted. What iscertain is that, in his explanation, Adam Smith has put togethertwo views that contradict each other. To put it shortly: he givestwo theories, one philosophical, the other empirical. In thefirst he tries to make clear what should be thought of as thecharacteristic attribute of value; what it is we ascribe to somethings and deny to others that, to all appearance, are entirelythe same; what it is of which we ascribe a great deal to certainthings and very little to other things which, measured by outsidestandards, seem infinitely superior. In this view value is anattribute per se, coinciding with no other that we know, and,least of all, with the usefulness of things. In carrying out thisattempt Adam Smith first of all abstracts from the complicatedcircumstances of ordinary economic life, and confines himself tothe simple, primitive, natural state. In this state he finds thatit is labour in which value originates. Goods are worth to uswhat they cost in labour, and what, therefore, their possessionsaves us in labour. The idea of value thus arrived at Adam Smithgoes on to apply to the empirical instances of the phenomenon ofvalue. Thereafter when he comes across value he sees nothingmysterious in it; he has a means of distinguishing it from theother attributes of things; he knows how to get to the heart ofit; indeed, through its relation to the labour from which itreceives its content, he can even measure it.
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