We believe that few have read attentively Say's chapter on value, without being made sensible that something is wanting; the discussion does not satisfy the mind. The understanding is in a situation somewhat similar to what that of the body would be, were its gravity destroyed, and it were left to be tossed about, and become the sport and plaything of the elements. "The valuation of an object," says Say, "is nothing more, nor less, than the affirmation that it is in a certain degree of comparative estimation with some other specified object; and any other objects possessed of value may serve as the point of comparison. In every act of valuation the object valued is the fixed datum. But the point of comparison is variable in amount, according to the degree of estimation in the mind of the valuer."* In this extract we have the value of objects estimated in those very objects of which we wish to ascertain the value. The value of a house is the money for which it may be exchanged; and the value of the money is the house; and thus we may run round the whole circle of the objects of exchange, and every thing and nothing will be equally the standard of value. We willingly grant that by Say's account, we obtain accurate knowledge respecting the comparative estimation in which objects are held. Thus, to use his own words, "one house is said to be worth 20,000 francs, and another 10,000 francs; which is simply saying the former is worth two of the latter. The mind has no difficulty in conceiving the relation of 2 integers to 1, or of 20,000 to 10,000; but any attempt to form an abstract notion of one of these integers must be abortive." Is it then indeed so, that there is no ultimate standard to which we may refer all values as to their origin as well as their amount? Is there nothing on which the mind can rest with satisfaction, and by which men might estimate the value of a desirable object, were there but one such in existence that was not common property? We will inquire. "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 everything is really worth to the man who has acquired it, and who wants to dispose of it, and exchange it for something else, is the toil and trouble which it can save to himself, and which it can impose on other people. Labour was the first price, the original purchase money that was paid for all things. If among a nation of hunters, for example, it usually costs twice the labour to kill a beaver which it does to kill a deer, one beaver should natu * Say's Political Economy, vol. 2, p. 1, 2. tIbid, vol. 1, p. 211... VOL. V.-NO. 1. 5 rally exchange for, or be worth two deer. It is natural that what is usually the produce of two days or two hours labour, should be worth double of what is usually the produce of one day's or one hour's labour."* We think that the passage just quoted from the Wealth of Nations, presents to view the basis of value; and this will perhaps be granted so far as regards the state of society alluded to by Dr. Smith. Men will not give for nothing, that sacrifice of ease and present comfort, necessary in the performance of labour. "Labour for labour's sake, is against nature;" and want alone can compel the exertion required in production. This being so,-labour being considered as an effort made by the indolent creature, man, when impelled by imperious necessity, there is no likelihood that an individual will yield to his neighbour any product of his industry for one which has been produced by less toil. In an advanced state of society, such as our own, the simplicity of comparing equal quantities of labour is unknown. The profits of capital form a large part of the exchangeable value of nearly all the articles of consumption. We should not, however, turn our view at once from the state of the savage, to civilization; we ought to mark the intermediate steps-the gradual change from one state to the other, the dividing line between which cannot be traced. The effects, on exchangeable value, of this transition from the possession of very little or no property, to the accumulation of capital, are illustrated by Mr. Ricardo as follows: "Even in that state to which Adam Smith refers, (in the extract given above) some capital, though possibly rade and accumulated by the hunter himself, would be necessary to enable him to kill his game. Without some weapon, neither the beaver nor the deer could be destroyed, and, therefore, the value of these animals would be regulated, not solely by the time and labour necessary to their destruction, but also by the time and labour necessary for providing the hunter's capital, the weapon, by the aid of which their destruction was effected. 66 Suppose the weapons necessary to kill the beaver were constructed with much more labour than those necessary to kill the deer, on account of the greater difficulty of approaching near to the former animal, and the consequent necessity of its being more true to its mark ;- -one beaver would naturally be of more value than two deer, and precisely for this reason, that more labour would on the whole be necessary to its destruction. All the implements necessary to kill the beaver and deer, might belong to one class of men, and the labour employed in their destruc --- * Wealth of Nations, vol. 1, p. 21, 33. tion might be furnished by another class; still their comparative prices would be in proportion to the actual labour bestowed, both on the formation of the capital, and on the destruction of the animals. "If we suppose the occupations of the society extended, that some provided canoes and tackle necessary for fishing, others the seed and rude machinery first used in agriculture, still the same principle would hold true that the exchangeable value of the commodities produced would be in proportion to the labour bestowed on their production; not on their immediate production only, but on all those implements or machines required to give effect to the particular labour to which they were applied. "If we look to a state of society in which greater improvements have been made, and in which arts and commerce flourish, we will still find that commodities vary in value conformably with this principle. In estimating the exchangeable value of stockings, for example, we will find that their value, comparatively with other things, depends upon the total quantity of labour necessary to manufacture them and bring them to market. First, then, is the labour necessary to cultivate the land on which the raw cotton is grown: secondly, the labour of conveying the cotton to the country where the stockings are to be manufactured; which includes a portion of the labour bestowed in building the ship in which it is conveyed, and which is charged in the freight of the goods: thirdly, the labour of the spinner and weaver: fourthly, a portion of the labour of the engineer, smith and carpenter who erected the buildings and machinery, by the help of which they are made: fifthly, the labour of the retail dealer and of many others whom it is unnecessary to particularize. The aggregate sum of these various kinds of labour determines the quantity of other things for which these stockings will exchange, while the same consideration of the various quantities of labour which have been bestowed on those other things, will equally govern the portion of them which will be given for the stockings."* We are persuaded that the correctness of the passage just given from Ricardo's work, cannot be questioned. It is not, perhaps, adviseable to carry the analysis of all values back to the labour in which they originated. It may be sufficient for us to know that it can be fairly carried thus far; but for the sake of distinction, just as mental philosophers treat of the indivisible mind, as if divided into parts, we may speak of capital-" of the accumulated produce of labour employed in main * Ricardo's Pol. Economy and Taxation, pp. 12–14. taining productive industry"* as distinct from labour; and use the phrases "profits of capital" and "wages of labour." These things being premised, we think it may be shown that the costs of production are the only permanent standard of value. We do not wish to be understood as saying, that there is any invariable standard by means of which we may compare the value of the products of one century with those of another. There appears to be no such terms of comparison. Corn, for example, will not answer the purpose; since the increase of population having forced men to have recourse to soils of inferior quality, the cost of producing corn must have increased; and though the improvements made in agriculture may have partially counteracted this cause of enhancement in exchangeable value, we are wholly unable to compare the extent of operation in these two sources of variation. Neither will the quantity of labour necessary for the production of commodities, prove an accurate measure of value in different ages. The causes which enhanced the price of corn, would diminish the wages of the labourer, if we suppose him to have been in a state, previously to the operation of these causes, where he could obtain more than the necessaries of life. When the latter condition had arrived, his labour, however productive or otherwise, will be equally paid, since he must be supported in being; and the rapidity of the increase of population, will prevent his obtaining more than a subsistence for any length of time, even if his "labour had become doubly efficient, and he could, therefore, produce twice the quantity of a commodity." On this supposition, the article which he produces, would very shortly be reduced in exchangeable value to half its former price, while the labourer will receive but the same wages for his industry, though, as regards the wealth of the community, it may have become twice as productive as before. In the reasonings just given, we have proceeded on the supposition that the value of one of the objects remained stationary, while that of the other varied. If the value of both should vary at the same time, there must be a modification of the argument to suit the particular circumstances. If, for example, we suppose labour to have become twice as productive as previously, while the farmers, to supply the demand for grain, were obliged to till land which would produce only half as much corn as had been before grown on all lands under cultivation; in this state of things, the cost of producing corn would not vary. All that is intended then in the statement that the costs of production are the only permanent standard, is, that for the time being, and we may add that as sudden fluctuations of "natural price" are not frequent, the exchangeable value of commodities will be very nearly the same as the amount of expenditures in their production. It is to be remembered then, that our remarks apply to those products only which may be supplied by the application of more capital and industry to their production, in unlimited quantities according as there may be demand. It cannot be objected to this view of the subject, that the revenues of two individuals, who, in different occupations, employed the same number of labourers, and who had invested the same amount of capital, should be equal, which is not usually the case. This seeming difficulty arises from confounding gross with net revenue; that is, after all the charges peculiar to each employment are deducted. The net revenues of the different departments of industry are very nearly equal; and to see this clearly, we have only to avoid the confusion which arises from not distinguishing between net revenue and the gross proceeds of any employment. We would not say that wages were equal, if the ingenious artist received no more than a common labourer; because the former had to expend capital in the acquisition of his business; and if the mere physical force of man, without any knowledge or skill, could obtain equal returns, none would incur that expense. All tradesmen, therefore, should receive more in return for their labour than the servants of farmers; and we might go through the different occupations, and show that there is an average rate of wages, from which there cannot be any great and continued variation; since so soon as it is observed that the wages of one employment are above those of others, weighing all the agreeable and disagreeable circumstances connected with that employment, the labourers will all equally be desirous of enjoying the higher profits, and thus competition will soon reduce the wages. Similar remarks are applicable to the capital invested. Of course the safety and convenience of its investment, and several other particulars, will influence the rate of nominal profits; but the capitalists of any country will receive net returns on their investments very nearly equal, however differently their capitals may be employed. There will be an average rate of profits of capital as of industry, greater in new countries, and diminished in parts of the world which have been long under cultivation, in consequence of the lessened productiveness of that capital, last applied to the soil, the rate of profits on which regulates that of all other investments. Since then the profits of capital and wages of labour make up the cost of production of any commodity, if the exchangeable value should ever rise |