Wealth of Nations
In the first book of The Wealth of Nations, Adam Smith discusses the "Variations in the Proportion between the respective Values of Gold and Silver." Throughout history, these two metals have been regarded as mints of significant value. Before mines were found in America, the difference in value between silver and gold was usually seen as proportionate, where one ounce of fine gold was considered equivalent to anywhere from ten to twelve ounces of fine silver. More recently, the values have changed as much as one ounce of fine gold to be equal to as much as fourteen or fifteen ounces of fine silver. Over the years, it is said that both silver and gold have dropped in value, but the drop of silver has come more rapidly, therefore leading to the reason why gold has become proportionately even more valuable than in the past. Smith does claim, however, that "both the gold and silver mines of America exceeded in fertility all those which had ever been known before, the fertility of the silver mines had, it seems, been proportionally still greater than that of the gold ones." As a result of silver being more plentiful in comparison to gold, though it is considered less valuable it is certainly more important in many cases.
The increase of expense must either, first, be compensated altogether by a proportionable increase in the price of the metal; or, secondly, it must be compensated altogether by a proportionable diminution of the tax upon silver; or, thirdly, it must be compensated partly by the one, and partly by the other of those two expedients. This third event is very possible. As gold rose in its price in proportion to silver, notwithstanding a great diminution of the tax upon gold, so silver might rise in its price in proportion to labour and commodities, notwithstanding an equal diminution of the tax upon silver. Smith, Adam. The Wealth of Nations. London; Penguin Books Smith says that it would be "absurd to infer..." that "... because an ounce of gold will commonly purchase from fourteen to fifteen ounces silver, that there are commonly in the market only fourteen or fifteen ounces of silver for one ounce of gold." The amount of silver that can be found in the market is in all probability worth more in proportion to gold. Adam Smith feels that the cheaper of the two metals is f both more value and greatness due to the quantity that is accessible. He explains, "There are so many more purchasers for the cheap than for the dear commodity that not only a greater quantity of it, but a greater value, can commonly be disposed of. The whole quantity, therefore, of the cheap commodity must commonly be greater in proportion to the whole quantity of the dear one than the value of a certain quantity of the dear one is to the value of an equal quantity of the cheap one." Silver can be seen as more valuable in the sense that it is used more often and more common. Silver even outclasses gold in certain cases, for example in the French coin where si
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Approximate Word count = 1177
Approximate Pages = 5 (250 words per page double spaced)
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