CHAPTER II.

ON REAL AND NOMINAL VALUE.

A pisTiNcTION Of value into real and nominal,
 has been made by several of our most
eminent economical writers. According. to
Adam Smith, the real value or price of a commodity
 is the labour which it will command,
while the nominal value is the money for which
it will exchange. As this definition of real
value is evidently inapplicable to labour itself,
he proceeds to say, that the real value or price
of labour “ may be said to consist in the
quantity of the necessaries and conveniences of
life which are given for it; its nominal price in
the quantity of money *.”
Mr. Malthus, in his Principles of Political
Economy, has adopted similar, if not precisely
the same distinctions. * The most proper de.
* Wealth of Nations, Book i, Chap. v.