==================== HES POSTING =================== I was inclined to agree with Mr. Perelman, however, when I looked, Smith does pair utility with value in use, at the end of book I, Ch. 4, leading into the water and diamonds story. It seems clear to me that this is an intentionally limited definition of utility. Money, for example, has very limited "value in use" if one excludes exchange as a use. As Smith no doubt understood, it does not follow that money has limited utility, except if one limits the meaning of utility. The discussion of "value in use" VS "value in exchange" is particularly interesting to me since until recently, I worked in real estate appraisal, where the two concepts are distinct, although related and sometimes confused. Value in use is directly related to, although not necessarily equivalent to, production cost. In an ideal situation, this applies also to value in exchange. Numerous examples of the contrary situation exist however. In real estate, for example, a highly specialized building may fully justify its cost only to one party. To me, the interesting case with regard to Smith is with the "Labor theory of value" in relation to the above types of value. From my reading of Smith, labor is the ultimate measure of value, rather than source. The beginning of Bk. I Chapter V, is my most prominent source, but the theme exists elsewhere. Mike Robison Michigan State University http://www.msu.edu/user/robiso12/index.htm ============ FOOTER TO HES POSTING ============ For information, send the message "info HES" to [log in to unmask]