Adam Smith was an 18th century Scottish economist considered the father of modern economics. He developed the theory of value which states that the value of a good is determined by the amount of labor required to produce it. However, this only applies to primitive societies. In modern capitalist societies, the value or price of a good is made up of the costs of production including labor costs, profit, and rent for land usage. Smith's theory of value helped establish the basis for modern economic thought, though it is not fully applicable in complex market economies.