Exchange, Need, Demand

Smith's transition from Propensity to Barter to Division of Labor abstracts from an essential factor in the former--Need, as does, therefore, any subsequent derivation of Productivity, and of Wealth. His awareness of the disappearance of that factor is expressed in his vacillation between the advocacy of a Labor-Theory, and of an Exchange-Theory, of Value, i. e. Need is incorporated into the latter as Demand, but not into the former. Accordingly, his concept of Wealth is independent of that of Health, which consists in the total satisfaction of Needs. However, the representation of Need as 'Demand' is inadequate, as the concept of Marginal Utility, which does not distinguish vital need from ersatz wish, reflects. The specific moment of inadequacy is the implicit transition from the concept of Exchange as a means to the fulfillment of a deficiency, to that of Exchange as a means to profit.