Editing Labor theory of value (section)

=== Distinctions of economically pertinent labor ===
"Value in use" is the usefulness or [[utility]] of a commodity. A classical [[Paradox of value|paradox]] often comes up when considering this type of value.

In a passage of Adam Smith's ''[[The Wealth of Nations|An Inquiry into the Nature and Causes of the Wealth of Nations]]'', he discusses the concepts of value in use and value in exchange, and notices how they tend to differ:{{blockquote|The word VALUE, it is to be observed, has two different meanings, and sometimes expresses the utility of some particular object, and sometimes the power of purchasing other goods which the possession of that object conveys. The one may be called "[[use value|value in use]];" the other, "[[exchange value|value in exchange]]." The things which have the greatest value in use have frequently little or no value in exchange; on the contrary, those which have the greatest value in exchange have frequently little or no value in use. Nothing is more useful than water: but it will purchase scarcely anything; scarcely anything can be had in exchange for it. A diamond, on the contrary, has scarcely any use-value; but a very great quantity of other goods may frequently be had in exchange for it.<ref name="TWON1">{{cite book |author-link=Adam Smith |last=Smith |first=Adam |title=An Inquiry into the Nature and Causes of the Wealth of Nations |chapter=Of the Origin and Use of Money |year=1776}}</ref>}}Value "in [[Trade|exchange]]" is the relative proportion with which this commodity exchanges for another commodity (in other words, its [[price]] in the case of [[money]]). It is relative to labor as explained by Adam Smith: <blockquote>The value of any commodity, [...] to the person who possesses it, and who means not to use or consume it himself, but to exchange it for other commodities, is equal to the quantity of labour which it enables him to purchase or command. Labour, therefore, is the real measure of the exchangeable value of all commodities (''Wealth of Nations'' Book 1, chapter V).</blockquote>

According to the classical economists, value is the labor embodied in a commodity under a given structure of production. Marx called this the "[[Socially necessary labour time|socially necessary labor]]" but it is sometimes also called the "real cost", "absolute value."<ref>Ricardo, David (1823), 'Absolute Value and Exchange Value', in "The Works and Correspondence of David Ricardo", Volume 4, Cambridge University Press, 1951 and Sraffa, Piero and Maurice Dobb (1951), 'Introduction', in "The Works and Correspondence of David Ricardo", Volume 1, Cambridge University Press, 1951.</ref>