g between self-interest and selfishness, and contended that the two were not synonymous. It was Smith's view that, while selfishness would undermine economic progress, self-interest, by contrast, would improve the economic welfare of society (Ekelund and Hebert 87).
Smith felt that the catalyst which would promote self-interest, and, thereby, check selfishness was competition. Smith interpreted competition as an absence of monopoly. He contended that competition would cause "sellers to lower their prices à to attract more customers," which would translate into "lower consumer prices and improved economic welfare" (Ekelund and Hebert 87). By contrast, Smith (251) concluded that "Monopoly à is a great enemy to good management à."
The Physiocrats, who preceded Smith in the evolution of economic theory, contended that agricultural labor was "the creator of wealth" (Marx 240). Smith rejected the limitations of the Physiocrats' concept of wealth and its creation. Smith conceived of value as being determined by either the creation of one type of good for another, or the exchange of money for goods (Ekelund and Hebert 90).
Value determination, according to Smith, must be considered in two contextsùutility and exchange, although Smith was not referring to marginal utility. In this context, he stated that:
The word VALUE, it is to be observed, has two different meanings, and sometimes expresses the utility of some particular object, and sometimes the power of purchasing other goods which the possession of that object conveys. The one may be called 'value in use'; the other "value in exchange". The things which have the greatest value in use have frequently little or no value in exchange; and, on the contrary, those which have the greatest value in exchange have frequently little or no value in use. Nothing is more useful than water: but it will purchase scarce anything; scarce anything can be had in exchange for it. A di...