The Turgot Collection

Value and Money

Turgot distinguishes between money as a commodity (“actual money”) and money of account. The former can be measured. In contemporary European countries, commodity money consists of gold and silver, so the monies of different countries can be directly compared with one another as units of weight. Monies of account must first be given a value in terms of actual money before they can be compared with the money of another country. Turgot then proceeds to a general account of value, starting with the values of an isolated individual. A person will value goods according to the satisfaction they provide him: his opinion of these satisfactions is subject to change over time. In considering the value of a good, the person will take account of its scarcity. Exchanging goods with another person is an important way a person can increase his satisfaction. In an exchange, each person prefers the good he will acquire to the good he gives up. Turgot gives a complicated account of how this difference in valuation is consistent with equality in exchange. He extends his analysis to markets with more than two participants.