Smith’s Explanation of Money Price

Howard Nicholas ()
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Howard Nicholas: Erasmus University Rotterdam

Chapter Chapter 3 in Explorations in Marx’s Theory of Price—Why Marx Is Still Relevant for Understanding the Modern Economy, 2023, pp 47-86 from Palgrave Macmillan

Abstract: Abstract In this chapter I outline and critically evaluate Adam Smith’s explanation of the money price of a commodity from the perspective of Marx’s explanation. The basic argument I develop is that Smith’s conception of the value of the commodity causes him to have logically inconsistent and counterintuitive explanations of the relative money prices of commodities and the aggregate money price level. It causes him to explain the relative money prices of commodities by the relative quantities of corn commanded as incomes in the context of their production, and the aggregate money price level by the quantity of money used to facilitate the exchange of commodities for one another relative to the quantity of these commodities as a composite. This in turn requires Smith to see changes in relative money prices taking place independently of changes in aggregate money prices and, counterintuitively, deny the influence of the productivity of labour on either.

Date: 2023
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Persistent link: https://EconPapers.repec.org/RePEc:pal:palchp:978-1-137-56564-8_3

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DOI: 10.1057/978-1-137-56564-8_3

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