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discovery of a measure of value: 1 Ricardo's law has introduced a simchallenge any man to show that the plicity into the science which had in great interests of Political Economy vain been sought for before, is this: have at all suffered for want of such all former economists, in laying down a measure, which at best would end the component parts of price, had in answering a few questions of un- fancied it impossible to get rid of profitable curiosity : whilst, on the what is termed the raw material as other hand, without a knowledge of one of its elements. This impossithe ground on which value depends, or bility was generally taken for grantwithout some approximation to it, Po- ed : but a celebrated economist of litical Economy could not exist at all- our times, the late Mr. Horner, had except as a heap of baseless opinions. (in one of his papers published in the

Phad. Now then, having cleared Edinburgh Review) expressly set away the imaginary uses of Mr. Ri- himself to prove it. It is not true," cardo's discovery, let us hear some- said Mr. Horner, “ that the thing thing of its real uses.

purchased in every bargain is merely X. The most important of these I so much labor: the value of the raw expressed in the last words I uttered: material can neither be rejected as That, without which a science cannot nothing, nor estimated as a constant exist, is commensurate in use with quantity.” Now this refractory elethe science itself: being the funda- ment is at once and in the simplest mental law, it will testify its own way possible exterminated by Mr. importance in the changes which it Ricardo's law of value. For upon will impress on all the derivative the old system, if I had resolved the laws. For the main use of Mr. Ri- value of my hat into wages and procardo's principle, I refer you there- fits, I should immediately have been fore to all Political Economy. Mean- admonished that I had forgotten one time I will notice here the immediate of the elements : “ wages, profits, services which it has rendered by and raw material, you mean"-it liberating the student from those would have been said. "Raw material ! perplexities which generally embar. Well, but on what principle is this rassed him on his first introduction raw material itself to be valued? or on to the science: I mention two cases what other principle can it be valued by way of specimen.

than that on which the hat was va1. When it was asked by the stu- lued before? Like any other prodent-what determined the value of duct of labor, its value is determined all commodities: it was answered by the quantity of labor employed in that this value was chiefly determined obtaining it: and the amount of this by wages. When again it was asked product, or its value in something —what determined wages ? it was else (i. e. in the product of some other recollected that wages must obvious- equal labor) is divided between ly be adjusted to the value of the wages and profits as in any case of a commodities upon which they were manufactured commodity. The raw spent ; and the answer was in effect material of the hat is beaver: if in that wages were determined by the order to take the quantity of beavers value of commodities. And thus the which are necessary to furnish matemind was entangled in this inextrica- rials for a thousand hats, four men ble circle-that the price of com- have been employed for 25 days modities was determined by wages, then it appears that the raw material and wages determined by the price of a thousand hats has cost 100 days' of commodities. From this miserable labor which will be of the same value Alallados (as the logicians call it) in exchange as the produet of 100 we are now liberated : for the first days' labor in any other direction : step, as we are now aware, is false: as, for example, if 100 days' labor the value of commodities is not de- would produce two thousand pair of termined by wages: for wages ex- ockings of a certain quality,—then press the value of labor; and it has it follows that the raw material of my been demonstrated that the value of hat is worth two pair of such stocklabor does not determine the value of ings. And thus it turns out that an its products.

element of value, which Mr. Horner 2. A second case, in which Mr. and thousands of others have sup

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posed to be of a distinct nature and to in the previous stage of producing the
resist all further analysis, gives way raw material.
before Mr. Ricardo's law, and is exa X. Doubtless. There are however
terminated: an admirable simplifica- more complex cases which cannot be
tion, which is equal in merit and use resolved so easily without a know-
to any of the rules which have been ledge of the laws of rent. And this
devised from time to time for the re- would be anticipating that subject
solution of algebraic equations. out of its proper place: on which ac-

Phæd. It is well you made this ex- count I will not here allege them. planation : for it has saved Mr. Ri. Here then I have given two specicardo from an objection which I had mens of the uses which arise from a stored up against him. Amongst my better law of value; again reminding goods and chattels I am seised or you however that the main use must possessed of two pairs of silk stockings lie in the effect which it will impress of which one cost double the price of on all the other laws of Political the other. Now. I happen to know Economy, And reverting for one that the labor of manufacturing the moment, before we part, to the diffisuperior pair was not double in quan- culty of Philebus about the difference tity to the labor bestowed on the between this principle as a principium other, or as 6 to 3, but only as 6 to cognoscendi or measure and a princi4; the raw material of the superior pium essendi or ground, let me depair having been in price to that of sire you to consider these two essenthe inferior pair as 6 to 2. Upon tial marks of distinction-1. That all your present explanation it appears respectable economists have doubted that the labor previously employed or denied the existence of a true in obtaining the raw material had measure of value: but no man can been in the two cases as 6 to 2. Con- doubt the existence of a ground of sequently the total labor spent on the value. 2. That a measure is postesuperior pair was 12 x; on the infe- rior to the value: for, before a value rior 6 x-i. e. as 2 to 1; and the di- can be measured or estimated, it must minished proportion of labor in the exist : but a ground of value must final stage of manufacturing was be antecedent to the value, like any compensated by the higher proportion other cause to its effect.

DIALOGUE THE SIXTH.

On the Objections to the New Law of Value. X. The two most eminent econo- Illustrated. In this latter work, mists, who have opposed the Ri- amongst other arguments, he has cardian doctrines, are Mr. Malthus relied upon one in particular which and Colonel Torrens. In the spring he has chosen to exhibit in the form of 1820 Mr. Malthus published his of a table. As it is of the last im. Principles of Political Economy, portance to Political Economy that much of which was an attack upon this question should be settled, I Mr. Ricardo; and the entire Second will shrink from nothing that wears Chapter of 83 pages (On the Nature the semblance of an argument; and and Measures of Value) was I will now examine this table: and continued attempt to overthrow Mr. will show that the whole of the ina Ricardo's theory of Value Three ferences contained in the seventh, years afterwards he published a se- eighth, and ninth columns are founded cond attack on the same theory in a on a gross blunder in the fifth and distinct essay of 81 pages, entitled sixth: every number in wbich columns The Measure of Value Stated and is falsely assigned.

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Qrs. Qrs. Alpha . 150 120

8

2 10 8.33 12.5 Beta...

150 13 130 15.38 8.66 1.34 10 7.7 11.53 Gamma. 150 10 100 6.6

15 Delta ..

140 12 120 16.66 8.6 1.4 10 7.1411.6 Epsilon

140 11 110 127.2 7.85 2.15 10 9.09 12.7 130 12

120

8.3 9.23 0.77 10 8.33 10.8 Eta

130 10

100 30 7.7 2.3 10 10 13 Theta

120 11 110 9 9.17 0.83 10 9.09 10.9 Iota.

120

100 20 8.33 1.67 10 10 12 Kappa . .

110 10 100 10 9.09 .91 10 10 11 Lambda

110 9 90 22.2 8.181.82 10 11.1 12.2 My.

100 9 90 11.1 9 110 11.1 11 1 Ny..

100 8 80 25 8 2 10 12.5 12.5 Xi

90 8 80 12.5 8.88 1.12 10 12.5 11.25 This is an oversight, and not an error of the press : for 7.14 would be the value of the 100 quarters on the supposition that the entire product of the ten men, viz. 140 quarters, went to wages: but the wages in this case (Delta) being 120 quarters, the true value on the principle of this Table is manifestly 8.33.

SECTION I. Phæd. Now X., you know that I 140s and other ill-looking people of abhor arithmetical calculations ; be- the same description. sides which I have no faith in any X. Well, these numbers express propositions of a political economist, the products of the same labor on which he cannot make out readily land of different qualities. The without all this elaborate machinery quantity of labor is assumed to be of tables and figures. Under these always the same, viz. the labor of circumstances I put it to you as a ten men for a year (or one man for man of feeling, whether you ought ten years, or twenty men for half a to inflict upon me this alarming pile year, &c.) The producing labor, I of computations; which, by your say, is always the same ; but the gloomy countenance, I see that you product is constantly varying. Thus are meditating.

in the case Alpha the product is 150 X. Surrender yourself to my quarters : in the cases Delta and guidance, Phædrus, and I will lead Epsilon, when cultivation has been you over the hill by so easy a road compelled by increasing population that you shall never know you have to descend upon inferior land, the been climbing. You see that there product of equal labor is no more are nine columns; that, I suppose, than 110 quarters; and in the case does not pass your skill in arithmetic. Iota it has fallen to 120 quarters. Now then to simplify, the matter, Now upon Mr. Ricardo's principle of begin by dismissing from your atten- valuation I demand to know what tion everycolumn but the first and the ought to be the price of these sevelast; fancy all the rest obliterated. ral products which vary so much in

Phæd. Most willingly: it is a quantity ? heavenly fancy.

Phæd. Why, since they are all the X. Now look into the first column, products of the same quantity of and tell me what you see there. labor, they ought all to sell for the

Phæd. I see “ lots” of 150s and same price.

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X. Doubtless ; not however of ne- Phæd. What! does he mean to cessity for the same money price, say then that the laborer always since money may itself have varied, obtains the same wages ? in which case the same money price

X. Yes, the same real wages : all would be really a very different differences being only apparently in price; but for the same price in all the wages, but really in the commothings which have not varied in dity in which the wages are paid. value.-The Xi product therefore Let that commodity be wheat: then, which is only 90 quarters, will fetch if the laborer receives ten quarters of the same real price as the Alpha or wheat in 1800-and nine in 1820, Gamma products which are 150.— that would imply only that wheat But, by the way in saying this, let was about 11 per cent. dearer in the me caution you against making the latter year. Or let money be that false inference—that corn is at the commodity : then, if the laborer resame price in the case Xi as in the ceives this century 2s. and next cencase Alpha or Gamma: for the in- tury 3s. this simply argues that money ference is the very opposite; since, if has fallen in value by 50 per cent. 90 quarters cost as much as 150, Phæd. Why so it may: and the then each individual quarter of the whole difference in wages may have 90 costs a great deal more. Thus arisen in that way, and be only apsuppose that the Alpha product sold parent. But then it may also have at four pounds a quarter ; the price arisen from a change in the real of the whole would be 6001. Six value of wages -- that is, on

the hundred pounds therefore must be Ricardian principle, in the quantity the price of Xi or the 90 quarters: of labor necessary to produce wages. but that is 6l. 138. 4d. a quarter. This And this latter must have been the ought to be a needless caution : yet nature of the change, if Alpha, Iota, I have known economists of great Xi, &c. should be found to purchase name stand much in need of it. more labor: in which case Mr. Ri

Phæd. I am sure I stand in need cardo's doctrine is not affected; for of it, and of all sort of assistance; he will say that Iota in 1700 exfor I am « ill at these numbers." changes for 12 and Kappa in 1800 for But let us go on: what you require 11, not because Kappa has fallen in my assent to—I understand to be that proportion (for Kappa, being the this: that all the different quantities product of the same labor as lota, of corn expressed in the first column cannot fall below the value of lota), will be of the same value, because but because the commodity for which they are all alike the product of ten they are exchanged has risen in that men's labor. To this I do assent: and proportion. what next? Does any body deny it? X. He will: but Mr. Malthus at,

X. Yes, Mr. Malthus: he asserts tempts to bar that answer in this that the value will not be always the case, by alleging that it is impossame : and the purpose of the ninth sible for the commodity in question, column is to assign the true values ; viz. labor, to rise or to fall in that which, by looking into that column, or in any other proportion. If then you may perceive to be constantly the change cannot be in the labor, varying: the value of Alpha, for in- it must be in Alpha, Beta, &c.; stance, is twelve and five-tenths; the in which case Mr. Ricardo will be value of Epsilon is twelve and seven- overthrown: for they are the products tenths; of lota-twelve; and of Xi— of the same quantity of labor,and yet eleven and twenty-five hundredths. have not retained the same value.

Phæd. But of what? Twelve and Phæd. But, to bar Mr. Ricardo's five-tenths of what?

answer, Mr. Malthus must not allege X. Of any thing which, though this merely, he must prove it. variable, has in fact happened to be X. To be sure: and the first seven stationary in value: or, if you choose, columns of this table are designed to of any thing which is not variable in prove it.-Now then we have done value.

with the ninth column, and also with Phæd. Not variable ! But there is the eighth ; for they are both mere no such thing.

corollaries from all the rest, and linkX. No: Mr. Malthus however says ed together under the rule of three. there is: labor he asserts is of un- Dismiss these altogether; and we alterable value.

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will now come to the argument. May, 1824.

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SECTION II. The table is now reduced to seven that we are to look for the root of the columns, and the logic of it is this: error: which is indeed a very gross one. the four first columns express the Phil. Why, now, for instance, take conditions, under which the three the ease Alpha--and what is the error following ones are deduced as con- you detect in that? sequences : and they are to be read X. Simply this—that in column thus, taking the case Alpha by way of five, instead of 8, the true value is 6.4 ; example : Suppose that (by column and in column six, instead of 2, the one) the land cultivated is of such a true value is 1.6 ; the sum of which quality that ten laborers produce me values is not ten but eight: and that 150 quarters of corn; and that (by is the figure which should have stood column two) each laborer receives for in column seven. his own wages 12 quarters ; in which Phil. How so, X.? In column case (by column three) the whole ten five Mr. Malthus undertakes to assign receive 120 quarters, and thus (by the quantity of labor necessary (uncolumn four) leave me for my profit der the conditions of the particular 30 quarters out of all that they have case) to produce the wages expressed produced, i. e. 25 per cent. : 'Under in column three, which in this case these conditions, I insist (says Mr. Alpha are 120 quarters. Now you Malthus) that the wages of ten men cannot deny that he has assigned it as stated in column three, let them truly: for when ten men produce be produced by little labor or much 150 (by column one) i. e. each man Jabor, shall never exceed or fall be- fifteen, it must require eight to prclow one invariable value expressed duce 120: for 120 is eight times fifin column seven: and accordingly teen. Six men and four tenths of a by looking down that column you man, the number you would substiwill perceive one uniform valuation tute, could produce only 96 quarters. of 10. Upon this statement it is ma- X. Very true, Philebus: eight men nifest that the whole force of the

are necessary to produce the 120 logic turns upon the accuracy with quarters expressed in column three. which column three is valued in co- And now answer me: what part of lumn seven. If that valuation be their own product will these eight correct, then it follows that under all producers deduct for their own wages? changes in the quantity of labor Phil. Why (by column two) each which produces them wages never man's wages in this case are twelve alter in real value ; in other words, quarters: therefore the wages of the the value of labor is invariable. eight men will be 96 quarters.

Phed. But of course you deny X. And what quantity of labor will that the valuation is correct ?

be necessary to produce these 96 quarX. I do, Phædrus : the valuation ters? is wrong, even on Mr. Malthus's or Phil. Each man producing fifteen, any other man's principles, in every it will require six 'men's labor and instance: the value is not truly as- four tenths of another man's labor. signed in a single case of the whole X. Very well : 6.4 of the eight fourteen. For how does Mr. Mal- are employed in producing the wages thus obtain this invariable value of of the whole eight. Now tell me, ten? He resolves the value of the Philebus,—what more than their wages expressed in column three into own wages do the whole eight protwo parts; one of which, under the duce ?

labor," he assigns in column Phil. Why as they produce in all five; the other, under the name 120 quarters, and their own deduction " profits," he assigns in column six : is 96, it is clear that they produce 24 and column seven expresses the sum quarters besides their own wages. of these two parts; which are always X. And to whom do these 24 quarkept equal to ten by always com- ters go? pensating each other's excesses and Phil

. To their employer for his profit. defects. Hopce, Phædrus, you see X. Yes: and it answers the condithat--as column seven simply ex- tion expressed in column four: for a presses the sum of column five and profit of 24 quarters on 96 is exactly six-if those columns are right, co- 25 per cent. But, to go on,-you himn seven cannot be wrong. Con- have acknowledged that the 96 quarsequently it is in column five and six ters for wages would be produced by

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