Can market prices misrepresent the value of commodities? I address this question from a historical perspective, comparing the views of Adam Smith and William Stanley Jevons. Smith held that the value of a unit of labor was, in some sense, objective, and could be used to approximate the true value of a commodity. Since market prices do not always track this value, and since we always face uncertainty when determining whether or not they do, there is reason to be skeptical that market prices accurately represent the value of commodities. In contrast, Jevons defines value as a ratio of utilities that only has meaning in a market context. This definition increases the precision with which Jevons can formulate his economic theory, but it precludes any possibility that market prices could misrepresent the value of a commodity. I encourage the reader to question the wisdom of granting markets this infallibility.
How to Cite:
Sperduto, L., 2013. Markets, Maths and Value: Smith versus Jevons. Rerum Causae, 4(1), pp.31–39.