Hume and the Labor Theory of Value

The received view does not associate David Hume with the genesis of the labor theory of value, but as is argued here, Hume issued a number of key propositions that belong to the labor theory of value such that he rightly belongs to the classical school of political economy. Hume articulated both the analytic claim, that labor is the primary determinant of exchange-value and hence the price, and the explanatory claim, that a price could be reduced down to the labor embodied in its production. His attention, however, was directed more to the quality than the quantity of labor and in that respect there was no direct correlation between the temporal units of labor and the price. Insofar as wages and profits are inversely related, or so he argued, the falling rate of profit over the past century meant that wages had become the primary factor in determing a price. Furthermore, Hume treated capital goods as stored labor, and put much weight on the role of the new work ethic and the growth of artisanal production which had contributed, in part, to the unprecedented wealth of Western Europe. Hume also recommended that the state adopt policies to improve the mobility and supply of labor, and promote a healthier and happier population.