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Theories of Value from Adam Smith to

Piero Sraffa
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Fred Moseley
a
Mount Holyoke College

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Review of Political Economy, 24:3, 519-527

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 Review of Political Economy,
Volume 24, Number 3, 519 –542, July 2012

Book Reviews
Theories of Value from Adam Smith to Piero Sraffa

Ajit Sinha
London, Routledge, 2010, 364 pp., £ 65.00 hardcover
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ISBN 978-0-415-56320-8

This excellent book will be of interest to a wide range of scholars, especially his-
torians of economic thought, and also heterodox economists in general. The book
consists of five chapters, one each on Smith, Ricardo, Marx, and Sraffa, and a short
concluding chapter. Each chapter consists of two parts: the first part presents
Sinha’s interpretation of each author, and the second part discusses the most sig-
nificant interpretative literature on each author, beginning with their contempor-
aries and moving up to the present day. This second part of each chapter is a
valuable contribution in itself, especially for scholars who may not be familiar
with all the different interpretations.
The book begins with the well-known passage from Sraffa’s Preface to
Production of Commodities by Means of Commodities:
The investigation is concerned exclusively with such properties of an economic
system as do not depend on changes in the scale of production or in the pro-
portion of ‘factors’.
This standpoint, which is that of the old classical economists from Adam Smith
to Ricardo, has been submerged and forgotten since the advent of the ‘marginal’
method. (Sraffa, 1960, p. v)
Sinha states that this book was inspired by his efforts to figure out just what Sraffa
meant by the ‘classical standpoint’, and why he excluded Marx from this group.
The two main characteristics of the ‘classical standpoint’ emphasized in Sinha’s
book are: it is based on a given physical system of inputs and outputs, and distri-
bution is taken as given, prior to and independent of the determination of prices.
Sinha acknowledges that much of classical economics is about capital accumu-
lation and dynamics, but he maintains that, in their theories of value, they
assumed a given physical system similar to Sraffa’s theory. I will discuss each
of the four chapters in turn.

Smith
A Sraffian interpretation of Ricardo’s theory in terms of given physical quantities
is now common, after Sraffa’s famous Introduction to Ricardo’s Works and his
emphasis on Ricardo’s early corn model; but Sinha argues that Smith also
assumed a kind of embryo corn model in his theory of value and distribution,
with the difference being that Smith assumed that the corn surplus determines
ISSN 0953-8259 print/ISSN 1465-3982 online/12/030519– 24 # 2012 Taylor & Francis
http://dx.doi.org/10.1080/09538259.2012.701933
 520 Book Reviews

rent rather than profit. Therefore, Smith’s theory qualifies for Sraffa’s ‘classical
standpoint’, according to Sinha. It may be that Smith intended in a few passages
to determine rent by the corn surplus, but I am not persuaded that a corn model was
Smith’s general model in his theory of value and distribution.
The usual interpretation of Smith’s theory of value and distribution is that he
was logically inconsistent; his main theory was a cost of production theory, but in
a few passages he also seemed to assume a labor theory, or in other passages even
a supply-and-demand theory. Wages and profit are assumed to be causes of price,
but rent is assumed to be an effect of price, which is logically contradictory. Sinha
acknowledges the ‘contradictory juxtapositions’ in Smith’s theory (p. 3), but he
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argues that these apparent contradictions should be understood in terms of

Smith’s ‘epistemological foundation’. Sinha’s interpretation of Smith’s ‘epis-
temological foundation’ is not entirely clear, and he devotes only a half a para-
graph to explaining it (pp. 47 2 48). Sinha argues that Smith was not trying to
provide a theory of value and distribution, with cause and effect. Instead, value
and distribution function as ‘signs’ for each other and ‘“determine” each other
simultaneously’, which seems to suggest a Foucault-inspired interpretation of
Smith.
I would classify this interpretation of Smith’s theory as a ‘rational reconstruc-
tion’ rather than a ‘historical reconstruction’ of what Smith actually meant. No
explicit passages from Smith are presented to support this interpretation of simul-
taneous determination of value and distribution. It is highly unlikely that Smith
thought in terms of simultaneous determination and ‘signs’ and ‘representations’;
more likely he was confused about the relation between prices and the components
of distribution (no one had tried to do this before on such a grand scale), and he
said contradictory things at different points in his book.
Another somewhat novel aspect of Sinha’s interpretation has to do with
Smith’s explanation of the falling rate of profit. The usual interpretation is that
Smith argued that, as capital accumulates in individual industries and in the indus-
try as a whole, increased competition among capitalists results in an excess supply
of commodities, which causes prices to fall, which in turn causes the rate of profit
to decline; a kind of supply and demand theory of value seems to be implicitly
assumed. However, Sinha argues that, according to Smith, the reason that
capital accumulation causes the rate of profit to fall is not because prices fall
(due to excess supply), but rather because accumulation causes wages to rise,
and the rate of profit varies inversely with wages. This interpretation is based
on the corn model interpretation discussed above; if the wage share of corn
increases, then the profit share will fall (there is an additional argument as to
why the rent share does not fall).
I agree that some of Smith’s passages could be interpreted as an inverse
relation between wages and profit, and Sinha’s emphasis on these passages is a
contribution; but none of these passages are in terms of a corn model. Most of
the passages are explicitly about manufacturing. For example, an important
passage from Chapter 6 of The Wealth of Nations is quoted at length and is inter-
preted by Sinha as a corn model (pp. 15–19). But this passage includes manufac-
turing, and it says that the value produced by workers (not the corn produced) is
divided into two parts (wages and profits). This passage has often been cited as an
 Book Reviews 521

example of Smith assuming a labor theory of value. It is clearly not a corn model.
Ricardo certainly did not interpret Smith’s theory to assume a corn model and an
inverse relation between wages and profit; instead Ricardo criticized Smith repeat-
edly and somewhat harshly for assuming that an increase of wages leads to an
increase of prices instead of a reduction of profit. Sinha acknowledges this, but
argues that Ricardo was wrong in his interpretation of Smith.

Ricardo
Sinha’s interpretation of Ricardo is also somewhat unconventional, and in particu-
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lar is different from Sraffa’s widely accepted interpretation in important respects.

Sinha argues that, because of the complications and difficulties of unequal turn-
over periods across industries, Ricardo gave up on trying to provide a theory of
the absolute levels of prices and the rate of profit, and concentrated instead on a
theory of the causes of changes in these variables. In particular, Ricardo wanted
to prove that declining productivity in agriculture would cause the rate of profit
to fall. For this purpose, the labor theory of value served Ricardo well, because
of its inverse relation between money wages and profit. However, Ricardo was
not completely successful because he could not eliminate the effects of higher
wages on relative prices. Sinha also argues that this focus on the causes of
changes was the reason for Ricardo’s search for an ‘invariable measure of
value’; such an invariable measure would enable Ricardo to eliminate the
effects of unequal turnover times on prices and focus his analysis on the effect
of declining productivity in agriculture on the rate of profit.
Sinha also argues that his interpretation is different from Sraffa’s interpret-
ation in both of these respects. Sraffa interpreted Ricardo’s theory as a theory
of the absolute level of prices and the rate of profit, and Ricardo’s search for an
invariable measure of value was to serve this purpose. However, Sinha argues
that Ricardo’s theory did fit Sraffa’s description of the ‘classical standpoint’,
because his theory of value takes as given the physical system of inputs and
outputs, including a given distribution of the physical net output.
In the literature review section of this chapter, Sinha defends Ricardo against
Marx’s criticism that Ricardo failed to provide a theory of the rate of profit. Sinha
argues that a theory of the rate of profit was Marx’s question, not Ricardo’s ques-
tion, and it is not valid to criticize Ricardo for failing to answer Marx’s question.
However, in my view, if a basic theory of the rate of profit was not Ricardo’s ques-
tion, it should have been. Surely it is preferable to have a basic theory of the rate of
profit than not to have one. Furthermore, a basic theory of the rate of profit is
especially important in this case, because a general rate of profit (equal across
industries) appears to contradict the labor theory of value; therefore it is incum-
bent on any proponent of the labor theory of value to explain how equal rates
of profit are consistent with the labor theory of value and how the general rate
of profit is determined by the labor theory of value. Ricardo could not provide
this explanation, but Marx did. (Of course, Marx’s ‘solution’ is controversial
and widely criticized, but I have argued in my work that Marx’s theory of the
rate of profit is logically consistent and does not have the alleged logical flaws;
I will say more on this point in the next section.) Ricardo’s inability to answer
 522 Book Reviews

this fundamental question was one of the main reasons the labor theory of value
was rejected in the decades that followed.
An important omission in Sinha’s review of the literature on Ricardo is Mar-
shall’s influential mis-interpretation (followed by Samuelson and Blaug and many
others) that Ricardo’s theory was not a labor theory of value at all, but instead was
a simplified cost of production theory—a labor cost of production theory—and as
such is a special case of Marshall’s own theory (the special case of long-run equi-
librium prices with constant returns to scale). If this were true, then there would be
no inverse relation between wages and the rate of profit in Ricardo’s theory, and
hence no theory of the falling rate of profit due to declining productivity in agri-
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culture.

Marx
The chapter on Marx (the longest chapter in the book) is a fairly standard Sraffian
interpretation of Marx’s theory; it emphasizes Marx’s failure to solve the
reduction problem of equalizing skilled and unskilled labor, his failure to solve
the transformation problem of values into prices of production, and his failure
to prove the law of the tendency of the rate of profit to fall. Sinha devotes more
of his attention to Sections 1 and 2 of Chapter 1 of Volume 1 of Capital, and to
the transformation problem. The chapter’s shortest section is on Marx’s basic
theory of surplus-value in Parts 2 and 3 of Volume 1, which I consider to be
the most important parts of Marx’s theory. Part II of this chapter presents a
long overview of interpretations of Marx’s theory, including Böhm-Bawerk, Bort-
kiewicz, Morishima, Steedman, Shaikh and the New Interpretation, told of course
from a Sraffian perspective. My disagreements with Sinha and the Sraffian
interpretation of Marx’s theory are too vast and fundamental to be discussed in
this review. I intend to write a separate detailed response to this chapter. I have
discussed the transformation problem at length in my previous work (see
Moseley 1993, 2000, 2001, 2002). Here I will concentrate on a few fundamental
points.
Sinha interprets Volume 1 of Capital to be about labor-values only, without
reference to money, except as a convenient illustration of labor-time (which is of
course a common interpretation of Volume 1). Constant capital, variable capital,
and surplus-value are all defined in units of labor-values. I would argue that this
common interpretation of Volume 1 is mistaken. Money is derived in Section 3
of the very first chapter of Capital, as the necessary form of appearance of abstract
labor. Sinha does not discuss this all-important section at all. From Section 3 on,
Marx’s theory is about quantities of money, as they are determined by quantities of
socially necessary labor-time; Marx’s theory is not about quantities of labor-time
which may be conveniently illustrated as money. The phenomena explained by the
theory in Volume 1 are not quantities of labor-time, but are instead quantities of
money, which are explained and determined by quantities of labor-time.
The rest of Volume 1 is primarily about ‘the transformation of money into
capital’. Marx introduced this main subject of Volume 1 in Chapter 4 as the
‘the general formula for capital’, M– C– M′ , where M′ ¼ M + DM. The general
formula for capital is clearly in terms of money, not in quantities of labor-time.
 Book Reviews 523

And the general formula expresses what Volume 1 is mainly about: how the initial
quantity of M becomes M + DM in the economy as a whole. This question could
not even be asked, let alone answered, if all the variables in Volume 1 referred
only to quantities of labor-time; it can be answered only if the key variables of
the theory refer to quantities of money. Surplus-value is also defined in Chapter
4 in terms of money, as DM, the increment of money that emerges at the end of
the circuit of money capital. Constant capital and variable capital are also
defined in terms of money in Chapter 8, as the two components of the initial
money capital M advanced at the beginning of the circuit of capital to purchase
means of production and labor-power (i.e., M ¼ C + V). The usual interpretation
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of Volume 1 (including Sinha’s) in terms of labor-values alone loses sight of the

monetary nature of Marx’s theory of surplus-value.
The general formula for capital, augmented to include production (M – C . . .
P . . . C′ 2 M + DM), is the logical framework for the rest of Marx’s theory; it is
the symbolic expression of the process that is the subject of Marx’s theory—
money becoming more money. This logical framework of Marx’s theory is funda-
mentally different from an input –output matrix, which is in physical terms rather
than money terms, and which is the logical framework of Sraffa’s theory. An
important implication of this logical framework is that, since the starting point
is M, this starting point is the initial given in Marx’s theory of how this initial
M becomes M + DM. This initial M exists prior to and independent of M′ and
DM, and is taken as given as this previously existing magnitude, as an empirical
fact, in the determination of M′ and DM.
And the crucial point for the ‘transformation problem’ is that, in Marx’s
theory of prices of production in Volume 3, the same quantities of constant
capital and variable capital are taken as given, as in the Volume 1 theory of the
total surplus-value—the actual quantities of money capital advanced to purchase
means of production and labor-power in the real capitalist economy. The only
difference is that in Volume 3, the quantities of constant capital and variable
capital advanced in individual industries are also taken as given, in addition to
the total constant capital and variable capital in the economy as a whole that
are taken as given in Volume 1 (the Mis in each industry, in addition to the
total M for the economy as a whole). The question that Marx’s theory of prices
of production is intended to answer is this: how is the original Mi (that is advanced
and consumed in each industry) recovered, and the total surplus-value distributed
in proportion to the Mi advanced in each industry? For this question, the appropri-
ate initial givens are the actual initial Mis in each industry, which have to be recov-
ered before any distribution of surplus-value can take place.
That is why Marx did not ‘fail to transform the inputs’ of constant capital and
variable capital from values to prices of production—because no such transform-
ation is necessary or appropriate in Marx’s theory. The inputs of constant capital
and variable capital in Marx’s theory of prices of production in Volume 3 are the
same quantities of money capital advanced in the real capitalist economy that are
inputs in Marx’s theory of total surplus-value in Volume 1.
In his discussion of the transformation problem Sinha argues that ‘The
problem is how to count the capital investment’ (p. 184). But that is not a
problem in Marx’s theory. The capital invested in Marx’s theory is obviously
 524 Book Reviews

counted in terms of money, in terms of the actual money capital (M) that initiates
the circulation of money-capital in the real capitalist economy. ‘How to count
capital’ is a problem for Sinha (and many others) because he thinks that the
capital invested could be counted in two ways: either as the labor-values of the
inputs or as the prices of the inputs. But there are no such options in Marx’s
theory. The capital invested in Marx’s theory is counted in terms of the actual
money capital advanced (M – C . . .).
Sinha also argues similarly that ‘k [the cost price] is an unknown’ in Marx’s
theory, and that is the reason why there is a transformation problem (p. 184). The
cost price in Marx’s theory is the same as the initial capital invested M, except that
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k includes only the consumed constant and variable capital, and M includes the
total advanced constant and variable capital. Sinha argues that k is an unknown,
which must be determined simultaneously with the prices of outputs, and both
derived from given physical quantities (means of production and means of subsis-
tence), as in Sraffa’s theory. But I argue that Marx’s theory is not like Sraffa’s
theory. The logical framework of Marx’s theory is not a physical input –output
matrix, but is instead the circuit of money capital, which starts with M (or k),
and this M is taken as given in Marx’s theory of how this initial M becomes M
+ DM, and how this DM is distributed in equal shares across industries (according
to the initial M invested in each industry). The cost price in Marx’s theory is not an
unknown, but is instead taken as given, as a quantity of money capital advanced,
as an empirical fact. Marx’s question is not: how do given quantities of physical
commodities produce other commodities? Rather, Marx’s question is: how do
given quantities of money capital become more money?
Sinha also argues the ‘the root of the [transformation] problem is that capital
depends on the rate of profit’, and since the rate of profit also depends on the
capital invested, the two variables depend on each other and thus must be deter-
mined simultaneously in order to avoid circular reasoning (p. 183). However,
this argument misses the fundamental distinction in Marx’s theory between the
capitalist economy as a whole and individual industries (in Marx’s terms, the dis-
tinction between capital in general and many capitals; see Moseley, 2002, 2009,
for extensive discussions of this distinction). The initial capital (M) does
depend on the rate of profit, because M is equal to the prices of production of
the inputs, and prices of production depend on the rate of profit. However, accord-
ing to Marx’s theory, the dependence of M on the rate of profit is explained at the
level of analysis of individual industries and prices of production (i.e., at the level
of many capitals). Before prices of production can be explained at the individual
level, first the total surplus-value (the total DM) and the general rate of profit must
be determined at the aggregate level. Marx’s aggregate theory of the total DM and
the general rate of profit takes the initial total M as given, and does not depend in
any way on the individual prices of individual commodities. Therefore, Marx’s
logic does not involve circular reasoning, but instead is based on a logical deduc-
tion from the aggregate level to the individual industry level.
Sinha concludes that Sraffa excluded Marx from the ‘classical standpoint’
because Marx tried to explain prices and the rate of profit on the basis of an under-
lying essence (abstract labor), and also because Marx tried to deduce the laws of
distribution from his theory of value, rather than determine distribution indepen-
 Book Reviews 525

dently of prices. I think Sinha is mostly correct on these two points about Marx’s
theory, and I think Marx would have been happy to be excluded from Sraffa’s
‘classical standpoint’ on these grounds. Marx’s theory does indeed derive distri-
bution (the total DM and general rate of profit) from his labor theory of value,
and his theory does indeed explain aggregate values on the basis of quantities
of abstract labor.
These fundamental disagreements obviously require a long discussion, which
I hope we will have.
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Sraffa
Sinha’s interpretation of Sraffa’s theory diverges from the standard view in two
important respects, which are related: whether or not the prices in Sraffa’s
theory are long-run equilibrium prices, and Sraffa’s justification for assuming
equal rates of profit across industries. The standard interpretation (e.g., Garegna-
ni’s) is that the prices in Sraffa’s theory are long-run equilibrium prices in the real
capitalist economy, with supply equal to demand in all industries, and with a grav-
itation mechanism that tends to move the real economy to the long-run equili-
brium. Sinha argues, to the contrary, that Sraffa’s prices are not long-run
equilibrium prices, but are instead mathematical properties of a given set of phys-
ical input and output data (like propositions in geometry), with no assumption
about gravitation to long-run equilibrium prices in the real economy.
Even if, as Sinha contends, Sraffa’s prices are not long-run equilibrium prices
with a gravitation mechanism, Sraffa nonetheless assumed that rates of profit are
equal for all industries. Sinha argues that this equality across industries is a logical
property of a given set of physical input –output data. Sinha’s argument for this
logical necessity (pp. 288 2 291) is somewhat complicated and will not be sum-
marized here. The argument has to do with the conversion of the actual system of
equations into the Sraffian Standard system. In order for the rate of profit to be the
same in both systems, all the individual industry rates of profit must also be equal
in both systems.
Sinha’s argument assumes ‘for simplicity’ that wages ¼ 0, and thus does not
apply to the actual rate of profit in the real capitalist economy. On the following
page (p. 292), he suggests that the same argument applies with positive wages—as
long as the wage share in the actual system is measured in terms of the standard
product. However, this necessary assumption invalidates the argument. If, instead,
the wage share in the actual system is measured in terms of the actual product, as it
should be in the determination of the rate of profit in the actual system, then the
actual rate of profit will not in general be equal to the rate of profit in the standard
system, and thus there is no logical necessity on this basis for the all the industry
rates of profit to be equal.
Sinha argues further that Sraffa himself probably had something like this in
mind to justify his assumption of equal rates of profit across industries, even
though he never explicitly said so. Sinha argues that when Sraffa first formulated
his system of equations in the late 1920s, he worried about how to justify this
assumption, and never found a good answer. Then Sinha speculates
 526 Book Reviews

that it was his discovery of the Standard system and the Standard commodity in
the early 1940s that probably convinced Sraffa that the uniformity of the rate of
profits is a logical necessity of any given system of production that determines
prices internally, irrespective of the equilibrium of supply and demand. (p. 289)
In my view, this speculative interpretation is another case of rational reconstruc-
tion, rather than a historical reconstruction of what Sraffa actually had in mind. I
am also surprised (and disappointed) that Sraffa apparently wrote so little in his
voluminous archives about his reason for making the crucial assumption of
equal rates of profit across industries, or about the classical gravitation mechan-
ism. Perhaps further digging in the archives will discover some discussions of
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these important topics.

Finally, I am left wondering: what is the relation between the prices in
Sraffa’s theory and prices in the real capitalist economy? According to Sinha,
the prices in Sraffa’s theory do not represent long-run ‘center-of-gravity’ prices
in the real economy; at the same time, Sraffian prices are not actual market
prices, because market prices do not have equal rates of profit. So what are Sraffian
prices? They are evidently the exchange ratios that will enable the economy to
reproduce the given physical quantities in the next period. But since these given
physical quantities are not long-run equilibrium physical quantities, they will
probably change in the next period, due to transfer of capitals, etc. Why should
we be interested in these hypothetical short-run prices?
Another question: are these Sraffian prices observable in any way? Sinha
emphasizes Sraffa’s ‘objectivism’, in the sense that the givens in his theory—
the physical quantities of inputs and outputs—are in principle observable. But,
according to Sinha’s interpretation, the prices of the outputs that are explained
by Sraffa’s theory do not appear to be observable, even in principle. What then
is the relation between real world prices and Sraffa’s equations?
I learned a good deal from reading this book, especially about Sraffa’s theory,
and I recommend it highly despite my disagreements with some of its interpret-
ations, especially about Marx’s theory. The quality of scholarship is high through-
out. Sinha states in the Preface that he hopes that his book will be particularly
useful for graduate students and young scholars, and I think it will be.

Fred Moseley
Mount Holyoke College
Email: fmoseley@mtholyoke.edu
# 2012, Fred Moseley

References
Moseley, F. (Ed.) (1993) Marx’s logical method and the transformation problem, Marx’s Method in
‘Capital’: A Reexamination (Atlantic Highlands: Humanities Press).
Moseley, F. (2000) The New Solution to the transformation problem: a sympathetic critique, Review
of Radical Political Economics, 32, pp. 282–316.
Moseley, F. (2001) Marx’s alleged logical error: a comment on Laibman, Science and Society, 65,
pp. 515–527.
 Book Reviews 527

Moseley, F. (2002) Hostile brothers: Marx’s theory of the distribution of surplus-value in Volume 3
of Capital, in: G. Reuten (Ed.) The Culmination of Capital: Essays on Volume Three of Capital
(London: Palgrave).
Moseley, F. (2009) The development of Marx’s theory of the distribution of surplus-value in the
Manuscript of 1861-63, in: R. Bellofiore & R Fineschi (Eds) Re-reading Marx: New Perspec-
tives after the Critical Edition (London: Palgrave Macmillan).
Sraffa, P. (1960) The Production of Commodities by Means of Commodities (London: Cambridge
University Press).

Theories of Value from Adam Smith to Piero Sraffa

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Ajit Sinha
London, Routledge, 2010, 364 pp., £65.00 hardcover
ISBN 978-0-415-56320-8

This book analyses the works of Smith, Ricardo, Marx and Sraffa in search of the
classical standpoint that separates them from the marginalist theory. Each of its
main chapters consists of an initial exposition of the primary texts followed by
an appraisal of the secondary literature. Chapter III, in which Sinha presents an
interesting survey of the most controversial issues in Marxian economics, is par-
ticularly rich in this respect.
In his search for the classical standpoint Sinha challenges many interpret-
ations of the classical theory. For this reason and the impressive number of
cited references (over 342 items), his book might be useful and stimulating to
all those who are interested in the theory of value. I have reservations,
however, about many of Sinha’s claims, especially those that concern Sraffa. In
summing up the content of each chapter, I shall outline these doubts.
Chapter I (‘The Theory of Value in Adam Smith’s Wealth of Nations’) starts
by reconstructing Smith’s use of labour as a measure of value, and his reduction of
prices to wages, profits and rents. Sinha points out that Smith understood that the
price of a commodity can be reduced to dated wages (and rents) together with the
corresponding compound profit term (see Smith, 1776, Bk I, pp. 57, 109 –110).
He also states that the gravitation of market prices towards natural prices calls
for an assumption of constant unit costs of production. Sinha then advances an
interpretation of Smith’s theories of wages, profits and rents, and compares that
interpretation with those of Smith’s contemporaries, Ricardo, the Ricardians,
Marx and some neoclassicals. Here Sinha’s main assertions are that (a) unlike
Ricardo and Marx, Smith ‘considers both wages and a normal profit as necessary
cost[s], treating only rent as surplus’ (p. 34); and (b) ‘Ricardo is not right in charging
Smith of neglecting the inverse wage-profit relation in the context of accumulation’
(p. 51). Pursuing these views, Sinha criticises authors such as Krishna Bharadwaj,
Maurice Dobb and Rory O’Donnell, all of whom have maintained that, according to
Smith, the surplus originates in manufactures. Sinha also criticises Marx for accus-
ing Smith of abandoning in some parts of The Wealth of Nations the ‘correct’ theory
of labour value ‘in favour of the incorrect additive theory of value’ (p. 58).