Book 1, Chapter 4 Summary and Analysis

The author differentiates between real and nominal price. Here he explains all the additional factors that play into the value of a given item, described here as a commodity. The amount of labor involved is included in an estimation of the real price of an object or service. He shows how it can be that an item can be more highly valued but still have a lower price. This includes a number of factors, but the money will buy more in one location "lower cost of living" may be one way of describing the relevant difference in this case, could make the surface lower price, far greater.

Wages are a main topic of the second portion of the book. Adam Smith declares that wages do not make as much sense or follow a precision of order that one might...