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Smith that the money which I can of the real value than the money obtain for my hat expresses only its price-would be that it is an equivonominal value, but that the labour cal expression, leaving it doubtful on which I can obtain for it expresses which side of the equation the disits real value, --I reply that the quan- turbance had taken place, or whether tity of labour is no more any expres

on both sides. In which objection, sion of the real value than the quan- as against others, you may be right: tity of money: both are equally fal- but you must not urge this against lacious expressions, because equally Adam Smith : because on his theory equivocal." My hat, it is true, now the expression is not equivocal: the buys me x quantity of labour,-and disturbance can be only on one side of some years ago it bought only 1 the equation, viz. in your hat. For quantity of labour. But this no as to the other side, the labour, that more proves that my hat has ad- is secured from all disturbance by vanced in real value according to his doctrine that labour is always of that proportion, than a double money the same value. When therefore price will prove it. For how will your hat will purchase x quantity of Adam Smith reply to him who urges labour instead of half x, the inferthe double money value as an argu- ence is irresistible—that your hat ment of a double real value? He has doubled its value. There lies no will say–No: non valet consequen- appeal from this : it cannot be evaded tia. Your proof is equivocal; for a by alleging that the labour may have double quantity of money will as fallen : for the labour cannot fall. inevitably arise from the sinking of X. On the Smithian theory it money as from the rising of hats. cannot: and therefore it is that I And supposing money to have sunk make a great distinction between the to one-fourth of its former value, in error of Adam Smith and of other that case a double money value-so later writers. He, though wrong, far from proving hats to have risen in was consistent. That the value of real value— will prove that hats labour is invariable—is a principle so have absolutely fallen in real value utterly untenable, that many times by one half; and they will be seen Adam Smith abandoned it himself to have done so by comparison with implicitly, though not explicitly. all things which have remained sta- The demonstration of its variable tionary: otherwise they would ob- value indeed follows naturally from tain not double merely but four times the laws which govern wages; and the quantity of money price. This therefore I will not here anticipate is what Adam Smith will reply in it. Meantime, having once adopted effect. Now the very same objection that theory of the unalterable value I make to labour as any test of real of labour, Adam Smith was in the value. My hat now obtains x labour: right to make it the expression of formerly it obtained only one half of real value. But this is not done with

Be it so: but the whole real the same consistency by Mr. Malthus change may be in the labour: labour at the very time when he denies the may now be at one half its former possibility of any invariable value. value: in which case my hat obtains Phil. How so? Mr. Malthus asthe same real price ; double the serts that there is one article of inquantity of labour being now re- variable value; what is more, this quired to express the same value. article is labour—the very same as Nay, if labour has fallen to one- that formerly alleged for such by tenth of its former value,-so far Adam Smith : and he has written a from being proved to have risen 100 book to prove it. per cent. in real value by now pur- X. True, Philebus, he has done chasing double quantity of labour, so; and he now holds that labour is my hat is proved to have fallen to invariable, supposing that his opione-fifth of its former value: else, nions have not altered within the last instead of buying me only « labour, 12 months. But he was so far from which is but the double of its former holding this in 1820, at which time it value (1), it would buy me 5 x, or was that he chiefly insisted on the 10 times its former value.

distinction between nominal and real Phil. Your objection then to the value, that he was not content with labour price as any better expression the true arguments against the possibility of an invariable value-buted and cleared up. That we shall made use of one, as I shall soon show not be able to dctermine from the you, which involves what the meta- mere money wages whether the laphysicians call a non-ens—or an idea borers were “starving or living in which includes contradictory and great plenty"—is certain : and that self-destroying conditions. Omitting we shall be able to determine this as however the inconsistency, in the soon as we know the quantity of idea of real value, as conceived by necessaries, &c. which those wages Mr. Malthys, there is this additional commanded, is equally certain; for error engrafted upon the Smithian in fact the one knowledge is identidefinition, that it is extended to cal with the other, and but another “ the necessaries and conveniences of way of expressing it: we must of life" in general, and no longer con- course learn that the laborer lived fined exclusively to labour. I shall in plenty, if we should learn that his therefore, as another case for illus

wages gave him a great deal of trating and applying the result of bread, milk, venison, salt, honey, &c. our dispute,

And as there could never have been 2. Cite a passage from Mr. Mal- any doubt whether we should learn thus's Political Economy, p. 59. this from what Mr. Malthus terms "If we are told that the wages of the real value, and that we should day-labour in a particular country not learn it from what he terms the are, at the present time, four-pence money value,-Mr. Malthus may be a-day, or that the revenue of a par- assured that there never can have ticular Sovereign, 700 or 800 years been any dispute raised on that ago, was 400,0001. a-year; these point. The true dispute is—whestatements of nominal value convey ther, after having learned that the no sort of information respecting the laborer lived in American plenty, we condition of the lower class of people shall have at all approximated to the in the one case, or the resources of appreciation of his wages as to real the sovereign in the other. Without value: this is the question: and it is further knowledge on the subject, plain that we shall not. What matwe should be quite at a loss to say, ters it that his wages gave him a whether the labourers in the country great deal of corn, until we know mentioned were starving or living in whether corn bore a high or a low great plenty ; whether the king in value ? A great deal of corn at a question might be considered as hav, high value implies wages of a high ing a very inadequate revenue, or value ; but a great deal of corn at whether the sum mentioned was so a low value is very consistent with great as to be incredible. * It is wages at a low value. Money wages, quite obvious that in cases of this it is said, leave us quite in the dark kind, and they are of constant recur- as to real value. Doubtless : nor are rence, the value of wages-incomes we at all the less in the dark for -or commodities estimated in the knowing the corn wages-the milk precious metals will be of little use wages-the grouse wages, &c. Given to us alone. What we want further the value of corn, given the value of is some estimate of a kind which milk, given the value of grouse, we may be denominated real value in shall know whether a great quantity exchange, implying the quantity of of those articles implies a high value the necessaries and conveniences of or is compatible with a low value in life which those wages—incomes—or the wages which commanded them: commodities will enable the possessor but, until that is given, it has been of them to command.”

already shown that the quantity In this passage, over and above alone is an equivocal test – being the radical error about real value, equally capable of co-existing with there is also apparent that confusion high wages or low wages. which has misled so many writers Phil. Why then it passes my combetween value and wealth ; 'a confu- prehension to understand what test sion which Mr. Ricardo first detect- remains of real value, if neither

Hume very reasonably doubts the possibility of William the Conqueror's revenue being 400,0001. a-year, as represented by an ancient historian, and adopted by subse. quent writers.--Note of Mr. Malthus.

money price nor commodity price ex- low from every body's notion of value presses it. When are wages, for ex- that this quantity of B however ample, at a high real value?

small at first must continually inX. Wages are at a high real value crease, if the value of A be supposed when it requires much labor to pro- continually to increase. duce wages; and at a low real value,

X. This may

seem” to follow : when it requires little labor to pro- but it has been shown that it does duce wages: and it is perfectly con- not follow: for if A continually dousistent with the high real value ble its value, yet let B continually that the laborer should be almost triple or quadruple its value, and the starving; and perfectly consistent quantity of B will be so far from inwith the low real value that the creasing that it will finally become laborer should be living in great ease evanescent. In short, once for all, and comfort.

the formula is this: let A continually Phil. Well, this may be true: but increase in value, and it shall puryou must allow that it sounds ex- chase continually more and more in travagant.

quantity—than what? More than it X. Doubtless it sounds extrava. did ? By no means:--but more than gant to him who persists in slipping it would have done, but for that inunder his notion of value another and crease in value. A has doubled its heterogeneous notion, viz. that of value. Does it therefore purchase more wealth. But, let it sound as it may, than it did before of B? No: perall the absurdities (which are neither haps it purchases much less ; suppose few nor slight) are on the other side. only one-fourth part as much of B as These will discover themselves as we it did before: but still the doubling of advance. Meantime I presume that, A's value has had its full effect : for in your use and in every body's use B has increased in value eight-fold ; of the word value, a high value ought and, but for the doubling of A, it to purchase a high value, and that it would instead of one-fourth have will be very absurd if it should not bought only one-eighth of the former But as to purchasing a great quanti- quantity. A therefore, by doubling in ty, that condition is surely not includ- value, has bought not double in ed in any man's idea of value. quantity of what it bought before,

Phil. No, certainly ; because A is but double in quantity of what it of high value, it does not follow that would else have bought. it must purchase a great quantity :

The remainder of this dialogue rethat must be as various as the lated to the distinction between “ nature of the thing with which it is lative" value, as it is termed, and compared. But having once assum- « absolute" value : clearing up the ed any certain thing, as B, it does true use of that distinction. But this seem to follow that—however small being already too long, the amount of a quantity A may purchase of this it will be given hereafter, with a (which I admit, may be very small specimen of the errors which have - though the value of A should be arisen from the abuse of this distincvery great), yet it does seem to fol- tion.



On the immediate uses of the new theory of Value. X. The great law, which governs all about the use of the leading truth? exchangeable value, has now been Nevertheless such a doubt has been stated and argued. Next, it seems, raised by Mr. Malthus, we must ask what are its uses ? Phæd. On what ground or preThis is a question which you or I tence? should not be likely to ask: for with X. Under a strange misconception what colour of propriety could a of Mr. Ricardo's meaning: Mr. Maldoubt be raised about the use of any thus has written a great deal, as you truth in any science ? still less, about may have heard, against Mr. Rithe use of a leading truth? least of cardo's principle of value: his purpose is to prove that it is a false prin- quantity of labour: since any alteraciple: independently of which, be tion in the quantity of the producing contends that—even if it were a true labour must immediately affect the principle-it would be of little use value of the product. Now what is (vid. the foot-note to p. 54 of “ The there which can always be obtained Measure of Value.")

by the same quantity of labour? Phæd. Little use? in relation to Raw materials, for reasons which will what?

appear when we consider Rent, are X. Aye, there lies the inexplicable constantly tending to grow dearer by mistake: of little use as a measure of requiring more labour for their provalue. Now this is a mistake for duction : manufactures, from the which there can be no sort of apo- changes in machinery which are logy: for it supposes Mr. Ricardo to always progressive and never retrohave brought forward his principle grade, are constantly tending to grow of value as a standard or measure of cheaper by requiring less : consevalue; whereas Mr. Ricardo bas re- quently there is nothing which upon peatedly informed his reader that he Mr. Ricardo's theory can long conutterly rejects the possibility of any tinue stationary in value. If theresuch measure: thus at p. 10, edit. 2d, fore he had proposed any measure of after laying down the conditio sine value, he must have forgotten his quâ non under which any commodity own principle of value. could preserve an unvarying value, Phil. But allow me to ask, if that he goes on to say - -" of such a com- principle is not proposed as a meamodity we have no knowledge, and sure of value, in what character is it consequently are unable to fix on any proposed ? standard of value." And again at X. Surely, Philebus, as the ground p. 343 of the same edition, after ex- of value ; whereas a measure of value posing at some length the circum- is no more than a criterion or test of stances which disqualify “ any com- value. The last is simply a prinmodity or all commodities together” cipium cognoscendi, whereas the other from performing the office of a stand. is a principium essendi. ard of value, he again states the in- Phil. But wherein lies the differdispensable condition which must be ence? realized in that commodity which X. Is it possible that you can ask should pretend to such an office; and such a question? a thermometer meaagain he adds immediately-“ of sures the temperature of the air: such a commodity we have no know- that is, it furnishes a criterion for asledge.” But what leaves this mistake certaining its varying degrees of heat; still more without excuse-- is, that in but you cannot even imagine that a the third edition of his book Mr. Ric thermometer furnishes any ground of cardo has added an express section this heąt. I wish to know whether a (the sixth) to his chapter on value, day's labour at the time of the Enghaving for its direct object to expose lish revolution bore the same value as the impossibility of any true measure a hundred years after at the time of of value. Setting aside indeed these the French revolution; and, if not explicit declarations, a few words the same value, whether a higher or will suffice to show that Mr. Ricardo a lower. For this purpose, if I becould not have consistently believed lieve that there is any commodity in any standard or measure of value. which is immutable in value, I shall What does a standard mean?

naturally compare a day's labour with Phæd. A standard is that which that commodity at each period. Some stands still whilst other things move, for instance have imagined that corn and by this means serves to indicate is of invariable value: and, supposor measure the degree in which they ing me to adopt so false a notion, I have advanced or receded.

should merely have to inquire what X. Doubtless : and a standard of quantity of corn a day's labour would value must itself stand still or be exchange for at each period, and I stationary in value. But nothing should then have determined the recould possibly be stationary in value lations of value between labour at upon Mr. Ricardo's theory unless it the two periods. In this case I were always produced by the same should have used corn as the measure of the value of labor : but I could he uniformly confounds the two ideas not rationally mean to say that corn of a ground and a criterion of value was the ground of the value of la- under a much greater variety of exbor: and, if I said that I made use pressions than I have time to enuof corn to determine the value of la- merate. bor, I should employ the word “de- Phil. But, admitting that Mr. Maltermine” in the same sense as when thus bas proceeded on the misconI say that the thermometer deter- ception you state, what is the specific mines the heat-viz. that it ascertains injury which has thence resulted to it, or determines it to my knowledge Mr. Ricardo ? (as a principium cognoscendi). But, X. I am speaking at present of the when Mr. Ricardo says that the uses to be derived from Mr. Ricardo's quantity of labor, employed on A, principle of value. Now, if it had determines the value of A-he must been proposed as a measure of value, of course be understood to mean that we might justly demand that it it cuuses A to be of this value, that it should be “ ready and easy of apis the ground of its value, the prin- plication” to adopt the words of Mr. cipium essendi of its value: just as Malthus (Measure of Value, p. 54): when, being asked what determines a but it is manifestly not so: for the stone to fall downwards rather than quantity of labor employed in proupwards, I answer that it is the ducing A “could not in many cases," earth's attraction

-or the principle (as Mr. Malthus truly objects) “ be of gravitation, meaning that this ascertained without considerable diffiprinciple causes it to fall downwards, culty :” in most cases, indeed, it and if in this case I say that gravita- could not be ascertained at all. A tion “ determines its course down- measure of value however, 'which wards, I no longer use that word in cannot be practically applied, is the sense of ascertain : I do not mean worthless : as a measure of value, that gravitation ascertains it to have therefore, Mr. Ricardo's law of value descended: but that gravitation has is worthless: and if it had been causatively impressed that direction offered as such by its author, the on its course : in other words, I make blame would have settled on Mr. Rigravitation the principium essendi of cardo: as it is, it settles on Mr. Malits descent.

thus, who has grounded an imaginary Phæd. I understand your distinc- triumph on his own gross miscontion : and in which sense do you say ception.

For Mr. Ricardo never that Mr. Malthus has used the term dreamed of offering it as a standard Measure of Value ; in the sense of a or measure of value, or of tolerating ground, or of a criterion ?

any pretended measure of that sort X. In both senses: he talks of it -by whomsoever offered. as “ accounting for” the value of A, Thus much I have said for the in which case it means a ground of sake of showing what is not the use value; and as estimating” the of Mr. Ricardo's principle in the devalue of A, in which case it means a sign of its author ; in order that he criterion of value. I mention these may be no longer exposed to the false expressions as instances: but the criticism of those who are looking truth is that throughout his essay for what is not to be found nor ought entitled The Measure of Value to be found* in his work. On quitStated and Illustrated—and through- ting this part of the subject I shall out his Political Economy (but espe- just observe that Mr. Malthus, in cially in the second chapter entitled common with many others, attaches a The Natureand Measures of Value"), most unreasonable importance to the

* At p. 36 of " The Measure of Value” (in the foot-note) this misconception of Mr. Ricardo appears in a still grosser shape; for not only does Mr. Malthus speak of a « concession (as he calls it) of Mr. Ricardo as being " quite fatal” to the notion of a standard of value-as though it were an object with Mr. Ricardo to establish such a standard ; but this standard moreover is now represented as being gold. And what objection does Mr. Malthus make to gold as a standard ? The identical objection which Mr. Ricardo had hiinself insisted on in that very page of the third edition to which Mr. Malthus refers.

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