Purchasing power

Purchasing power is the quantity of goods and services that a single unit of money or token can buy. This represents the effort that it can command.

There are other measures of command of work:

• Miltary force: Soldiers can force a village or prisoners to work
• A beautiful or handsome face: Men can be made to do things for a beautiful woman
• Illegal drugs: addicts will steal just to get money to buy drugs

But legally, money is the standard command of work. Previously, barter was valid.

But the wealth or revenue is equal only to the purchasing power of money. It is equal to the money’s worth, not the money

A

Adam Smith Book 2, Chapter 2