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The theory of value (price) developed by William Petty introduced a fundamental distinction, between market price and natural price. Market prices are pushing around by many brief influences that are difficult to conceive. Natural prices capture systematic and continual forces operating at a point in time. Market prices are always nurtured in the direction of natural prices. Smith and Petty theory of what determined natural prices differ. Petty tried to develop a balance between land and labor which he might call a land-and-labor theory of value. Smith confined a labor theory of value; which , natural prices were the totals of natural rates of wages, profits, and interest...
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