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. Adam 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, …

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