And thirdly, That the comparative steadiness in the value of the precious metals, for short periods, is of no service to them in the capacity of a measure of value.
The decision of the question, as to the truth of doctrines necessarily leading to such conclusions, may be safely left to the reader. But to return to the main subject of the chapter, namely, the measure of value proposed by me.
In a publication entitled “The Measure of Value stated and illustrated,” I had given reasons, which appeared to me convincing, for adopting labour, in the sense in which it is generally understood and applied by Adam Smith, as the measure of value; and further to illustrate the subject, and bring into one view the results of different suppositions respecting the varying fertility of the soil and the varying quantity of corn paid to the labourer, I added a table in which different suppositions of this kind are made.
In reference to this table the author observes,that “In the same way any article might be proved to be of invariable value, for instance, ten yards of cloth. For whether we gave 5l.or 10l.for the ten yards, the sum given would always be equal in value to the cloth for which it was paid, or, in other words, of invariable value in relation to cloth. But that which is given for a thing of invariable value must itself be invariable, whence the ten yards of cloth must be of invariable value.”[79]
This comparison shows either a most singular want of discrimination, or a purposed disregard of the premises on which the table is founded. These premises are, that the natural and necessary conditions of the supply of the great mass of commodities, or, in other words, their elementary costs of production, are, the accumulated and immediate labour necessary to produce them, with the addition of the ordinary profits upon the whole advances for the time they have been advanced; and that the ordinary values of commodities at different periods, accordingto the most customary application of the term, are determined by the elementary costs of production at those periods, that is, by the labour and profits worked up in them.
If these premises be just, the table correctly illustrates all that it was intended to illustrate. If the premises be false, the whole falls to the ground.
Now, I would ask the author, what sort of resemblance there is between ten yards of cloth and ten days’ labour? Is cloth the universal and the main instrument of production? Is the advance of an adequate quantity of cloth the natural and necessary condition of the supply of all commodities? Has any one ever thought of calling cloth and profits the elementary costs of production? or has it ever been proposed to estimate the values of commodities at different periods by the different quantities of cloth and profits worked up in them?
If these questions cannot be answered in the affirmative, it is obvious that what may be true and important with regard to labour, maybe perfectly false or futile in regard to anyproductof labour.[80]The whole depends upon the mode of estimating the values of commodities.
It would, no doubt, be an absurd tautological truism merely to state, that the varying wages of a given quantity of labour will always command the same quantity of labour; but if it were previously shown that the quantity of labour which a commodity commands represents exactly the quantity of labourworked up in it, with the profits upon the advances, and does therefore really represent and measure those natural and necessary conditions of the supply, those elementary costs of production which determine value; then the truism that the varying wages of a given quantity of labour always command the same quantity of labour, must necessarily involve the important truth, that the elementary costs of producing the varying wages of a given quantity of labour must always be the same.
It is obvious to any person inspecting the table, that the uniform numbers in the seventh column, illustrating the invariable value of the wages of a given number of men, might, with perfect certainty, have been stated without the intermediate steps; but if they had been so stated, no conclusion respecting the constancy of the value of such wages could have been drawn. The intermediate steps, which show that the value of the wages of ten men is there estimated by the causes which had been previously shown to determine the values of all commodities, can alone warrantthe conclusion that the uniform numbers in the seventh column imply uniformity of value in the wages.
Mr. Ricardo had stated repeatedly, that the value of the wages of labour must necessarily rise in the progress of society. He builds, indeed, the whole foundation of his theory of profits on the rise and fall of the value of labour. The table shows that, if we estimate the value of wages by the labour worked up in them, that is, by one element of value, Mr. Ricardo is right, and the value of wages will really rise as poorer land is taken into cultivation; but that, if we estimate the value of wages by the labour andprofitsworked up in them, that is, by the two elementary ingredients of value, the value of wages will remain the same.
The author says that, from the remarks he has made, the reader will perceive that Mr. Malthus’s “Table illustrating the invariable value of labour,” absolutely proves nothing;[81]and he concludes his chapter with observing, that his “cursory review evinces that theformidable array of figures in the table yields not a single new or important truth.”[82]
I was not aware that it was ever expected from a tabular arrangement, that it should afford logical proofs of new propositions; but, if the author means that, taking the whole publication together, it contains nothing new or important, though I may be bound to believe it in relation to his own reading and his own views, I cannot help doubting it a little in regard to the reading and views of many others; and I am quite certain that, with regard to myself, the view I there took of the subject of value, and of the reasons for adopting labour as its measure, was, in many of its parts, quite new to me a year before the publication.
In the first place; I had nowhere seen it stated, that the ordinary quantity of labour which a commodity will command must represent and measure the quantity of labour worked up in it, with the addition of profits. But, as soon as my attention was strongly drawn to this truth, the labour which a commoditywould ordinarily command appeared to me in a new light. I had before considered labour as the most general and the most important of all the objects given in exchange, and, therefore, by far the best measure of the general power of purchasing of any one object; but after I became aware that, by representing the labour worked up in a commodity, with the profits, it represented the natural and necessary conditions of its supply, or the elementary costs of its production, its importance, as a measure, appeared to me very greatly increased.
Secondly; I had nowhere seen it stated that, however the fertility of the soil might vary, the elementary costs of producing the wages of a given quantity of labour must always necessarily be the same. Colonel Torrens, in adverting to a measure of value, says, “In the first place, exchangeable value is determined by the cost of production; and there is no commodity, the cost of producing which is not liable to perpetual fluctuation. In the second place, even if a commodity could be found which always required thesame expenditure for its production, it would not, therefore, be of invariable exchangeable value, so as to serve as a standard for measuring the value of other things. Exchangeable value is determined, not by the absolute, but by the relative, cost of production.”[83]
I had been convinced, however, that, with a view to superior accuracy and utility, and a more complete conformity to the language and practice of society, in estimating the varying values of commodities for short periods, it was necessary to separate the variations in the power of a commodity to purchase, into two parts; the first, derived from causes operating upon the commodity itself; the second, from causes operating upon other commodities; and, in speaking of the variations in the exchangeable value of a commodity, to refer only to the former. In this case it is obvious that, according to Colonel Torrens, we should possess a measure of value if we could find an object the cost of producing which was always the same.
Now it is shown, in the “Measure of value stated and illustrated,” that the conditions of the supply of labour, or the elementary costs of producing the corn wages of a given number of men, estimated just in the same way as we should estimate the elementary costs of producing cloth, linens, hardware, or any other commodity, must of necessity always remain the same.
I own that these two necessary qualities of the labour, which commodities willordinarilycommand, were practically new to me; and, when forced on my attention, and accompanied by the conviction above described, as to the most correct and useful definition of value, made me view labour as a measure of value, so far approaching towards accuracy, considering the nature of the subject, that it might fairly be called a standard.
The publication was also marked by another peculiarity, which I cannot but consider as of some importance: namely, the constant use of the termlabour and profits, instead of the customary one,labour and capital.
It must be allowed that the expressionlabour and capitalis essentially tautological. In every definition of capital I have met with, the means of commanding labour are included; and there can be no doubt that machinery and raw materials require labour for their production of the same general description, and usually in as large a proportion, as the labour advanced by the last capitalist. Speaking loosely, we may indeed use the expressionlabour and capital, meaning by capital, when so used, all that part of the general description of capital which does not consist of the means of commanding the immediate labour required. But when we are engaged in an inquiry into the elements of value, nothing can be more unphilosophical than to talk of labour and capital. Excluding rent and taxes, the only elements concerned in regulating the value of commodities are labour and profits, including, of course, in such labour, the labour worked up in the raw materials, and that portion of the machinery worn out in the production; and including in the profits, the profits of the producers of the raw materials and machinery.To say that the values of commodities are regulated or determined by thequantityofcapital and labournecessary to produce them is essentially false. To say that the values of commodities are regulated by the quantities of labourand profitsnecessary to produce them is, I believe, essentially true. And if so, it was a point of some importance to substitute the expressionlabour and profitsfor the customary one oflabour and capital.
I have been detained longer than I intended by the Critical Dissertation on the Nature, Measures, and Causes of Value. There is still matter of animadversion remaining; but were I to go on I should tire my readers, if I have not done it already.
The author, when not under the influence of his peculiar definitions, makes some very just observations; and the work is exceedingly well written; which makes it a matter of greater surprise that its main proposition should be so strikingly adverse to the principle of utility, and so peculiarly calculatedto retard the progress of that science which it must have been intended to promote.
I do not think it necessary to the object I have in view, to proceed further with these remarks on the definition and use of terms among political economists. What I have already said, if just, will be sufficient to show that much uncertainty has arisen from our[84]negligence on this important point, and much improvement might be expected from greater attention to it. I shall now, therefore, proceed to define some of the principal terms in political economy, as nearly as I can, according to the rules laid down. But before I begin, I think it may be useful to give a summary of the reasons for adopting the subjoined definition of the measure of value.