1 / 7

Adam Smith And The Labor Theory Of Value

Adam Smith And The Labor Theory Of Value. Vassil Litchev Dowling College October 30, 2006. Agenda. Introduction to Adam Smith A look into the “Inquiry into the Nature and Causes of the Wealth of Nations” and Smith’s view on economics What is the Labor Theory of Value (LTV)?

chas
Download Presentation

Adam Smith And The Labor Theory Of Value

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript

  1. Adam Smith And The Labor Theory Of Value Vassil LitchevDowling College October 30, 2006

  2. Agenda • Introduction to Adam Smith • A look into the “Inquiry into the Nature and Causes of the Wealth of Nations” and Smith’s view on economics • What is the Labor Theory of Value (LTV)? • How does Smith relate to the LTV

  3. Adam SmithJune 5, 1723 - July 16, 1790 • Scottish political economist and moral philosopher • “Wealth of Nations” • Abolishment of mercantilism • Basis for classical economics • Thomas Malthus’ overpopulation • David Ricardo’s “iron law of wages” • The theory behind the free market • The “invisible hand” and “natural price” • “laissez-faire” policy

  4. Labor Theory of Value • The "value" of an exchangeable good or service is equal to the amount of labor required to produce it, including the labor required to produce the raw materials and machinery used in the process. • What is value? • value "in use" is the usefulness of a commodity or its utility; • value "in exchange" is the amount of value borne by another commodity M (typically money) paid for some commodity C (in other words, its price in the money case) • value without any qualifying adjective refers to the amount of labor embodied in some commodity C

  5. Adam Smith and the LTV • The labor process both preserves value and adds new value in the commodities it creates • The value of a commodity increases in proportion to the duration and intensity of labor performed on average for its production • The relationship between value and price • Does supply and demand play any role?

  6. In Conclusion • Adam Smith helped to create the modern academic discipline of economics, laid the foundation for classical economics and provided one of the best-known intellectual rationales for free trade and capitalism • His views on the Labor Theory of Value are still studied in detail in some economic schools.

  7. Q & A

More Related