The real price of everything, what everything really costs to the man who wants to acquire it, is the toil and trouble of acquiring it...What is bought with money or with goods is purchased by labour, as much as what we acquire by the toil of our own body...Labour was the first price, the original purchase-money that was paid for all things.
But though labour be the real measure of the exchangeable value of all commodities, it is not by that which their value is commonly estimated. It is often difficult to ascertain the proportion between two different quantities of labour. The time spent in two different sorts of work will not always alone determine this proportion. The different degrees of hardship endured, and of ingenuity exercised must likewise be taken into account. There may be more labour in an hours hard work than in two hours easy business; or in an hours application to a trade which it cost ten years labour to learn, than in a month's industry at an ordinary and obvious employment. But it is not easy to find any accurate measure either of hardship or ingenuity. In exchanging indeed the different productions of different sorts of labour for one another, some allowance is commonly made for both.
Every commodity besides, is more frequently exchanged for, and thereby compared with, other commodities than with labour. It is more natural therefore, to estimate its exchangeable value by the quantity of some other commodity than by the labour which it can purchase. The greater part of people too understand better what is meant by a quantity of a particular commodity, than by a quantity of labour. The one is a plain palpable object, the other an abstract notion, which though it can be made sufficiently intelligible, is not altogether so natural and obvious...Hence it comes to pass, that the exchangeable value of every commodity is more frequently estimated by the quantity of money, than by the quantity either of labour or of any other commodity which can be had in exchange of it.Smith stressed that while equal quantities of labour are always the same to the worker (one's time is fixed), potential employees will value our work somewhat differently or randomly. Nevertheless: what's important for the individual, is the real or marketplace component of one's production/consumption transactions. The real component of our time engagement, buys a certain amount of life's necessities and conveniences. Whereas the nominal component of a labour/time transaction is the money involved, which does not designate a certain amount of purchasing opportunity.
Consider the nominal aspect of labour (or time) value in general equilibrium terms. Even more than in Adam Smith's time, labour value is difficult to discern in relation to other resource capacity; particularly as the gap between aggregate output in relation to actual labour output, only continues to grow. Still, nominal labour value needs a constant monetary relationship with total resource capacity, despite the fact these vital components are at variance across the spectrum of resource potential.
As Smith noted, it is what labour can purchase that is important, not the money that is involved. Unfortunately, it appears the labour theory of value could have been partly responsible, for a diminished focus on wealth as accruing from reductions in product costs. Little doubt, rationale re time investment as "necessary nominal value" for labour's contribution to product, carried over to educational requirements for a wide range of professional time based services. Consequently, many time based services have yet to benefit, from the real economy factor which makes mutual wealth gains possible.
One danger of perceiving consumption in mostly aggregate demand terms, is forgetting that consumption gains re real economy factors are crucial to wealth. As Adam Smith stressed, "The labourer is rich or poor, is well or ill rewarded, in proportion to the real, not the nominal price of his labour." In closing, this quote from Smith reminds me of present day arguments for nominal stability via a level target:
Labour, therefore, it appears evidently is the only universal, as well as the only accurate measure of value, or the only standard by which we can compare the values of different commodities at all times and at all places.