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ABOUT A MEAN LEVEL.

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cost of their production. These are matters into which, now that we have obtained a tolerably clear notion of the nature of the primary elements of production, labour, land, and capital, we must enter into further detail.

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CHAPTER VIII.

VALUE.

Value necessarily relative-No real Value-General Value -Means Purchasing Power'-Elements of ValueMonopoly-Costs of Production. Rent, the result of Monopoly-Does not enter into Price-Distinction between good and bad Monopolies-Demand and Supply— Their variations and reciprocal action-Cost of Pro duction-Consists in Labour, Capital, Time, Monopoly, and Taxation.-Competition of Producers, by which Supply and Demand are kept nearly Level-Different Investments of Capital and Labour-Partial Glut― General Glut impossible, except through a Scarcity of Money.

MUCH Confusion has attended the use of this word in political economy, which a simple analysis of its meaning might have obviated. In common language everything which is desirable, as health, wit, beauty, goodness, is said to have value. But political economy meddles only with things which are the subject of exchanges; and in the discussions of the science, value therefore must mean always commercial value, or value in exchange. In this sense, in order to have value, it is not enough that an object be desirable. Many things are highly desirable for their useful or agreeable qualities, (as air, light, and water, for example,) but yet under ordinary circumstances, have no value-because their supply being unlimited and no trouble re

VALUE NECESSARILY RELATIVE.

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quired from any one to obtain as much of them as he can want, no one will give anything in exchange for them. The moment their supply falls short of the quantity required,—in other words, of the demand, or that it becomes necessary to take some trouble to obtain the quantity required, they acquire an exchangeable value. On board shipin the deserts of Africa-and in other places where the stock of water falls short of the quantity required, it obtains a value, which rises with its scarcity. In cities, water is habitually sold at a considerable price; and this price is generally proportioned to the trouble necessary for supplying the quantity required.

When, then, we speak of the value of anything, we must always have reference to some object of comparison or exchange. In ordinary phrase, money is the understood object of reference. But money being merely, as has been said, some one commodity selected for particular qualities to be used as a general measure of value and medium of exchange, is itself liable to vary in value; it is therefore clear that value is not in strictness to be determined by quantity of money. When employed alone, in scientific arguments, without reference to money or any other single specific object, commercial value must be understood to mean exchangeable worth in the general market, or what Adam Smith called purchasing power.' An object, in fact, whether gold, silver, cotton, or any other article, is said to have risen or fallen in value, when it will command in exchange a larger or a smaller quantity of other things in the gross than

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before. The expression is purely relative. Nor can there be such a thing as positive, absolute, or real value.*

When a desirable commodity is to be obtained

* Smith and his followers have insisted much on everything having a real value, which they define to consist of the quantity of labour required to produce it; and they accordingly call labour the natural standard or measure of value. But it is indispensable for a standard measure to be something both definite in its nature, and as nearly as possible invariable itself in value. Gold, silver, iron, or wheat, for instance, may be employed as standard measures of value with more or less of accuracy, because at least we know precisely the distinguishing qualities of these objects; they can be easily identified in all times and places; and equal quantities of them will always at the same time and place be of equal value.

But what can be more vague and indefinite in its meaning, or more variable in its value, than labour? In some coun tries labour is habitually far more severe and unremitting than in another; so that a day's labour in each by no means expresses an equal quantity of exertion. Again, an hour's labour of one man may in the same place be worth a year's labour of another. It is impossible that anything so variable in meaning and value can be fitly employed as a fixed general measure of the value of other things.

It has, however, been urged by these writers that the exchangeable value of anything will always depend on the quantity of labour necessary to procure or produce it, and on this ground it is proposed as the best measure of the value which it composes. One would have supposed that the commonest facts might have sufficed to prevent the promul gation of so false a position. What causes the workmanship of one artist to sell for ten times as much as that of another? Certainly not the greater proportion of labour bestowed on it. Why will a statue by Chantrey, a portrait by Lawrence, a novel by Scott, bring twenty times the money which the productions of inferior labourers will command? Why again is Tokay wine more valuable than piquette ?—or old

LABOUR NO MEASURE OF VALUE.

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in any quantity that can be required by a proportionate outlay of labour, like water from a wine than new?-Why an acre of land at Battersea than one on Dartmoor,—a diamond than a bit of glass,-an antique brass coin than a modern gold one? Not surely because of the greater quantity of labour worked up in them. It is true that these same writers sometimes attempt to qualify their rule by admitting exceptions in the case of those commodities whose supply is limited by monopoly, or the exclusive facilities for their production possessed by some individuals. But is there any commodity which is not more or less affected by monopoly? Is there any in the production of which superior advantages are not enjoyed by some parties over others, enabling them to raise its price in the market? All land, to begin with, the primary source of every commodity, is, in nearly all civilized societies, monopolized. And the superior advantages of position or quality belonging to one tract of land over others, enable its owner to place a far higher value on its produce than will just cover the labour of production. All mines of coal and metal, quarries, woods, water-power, &c., are in the same predica ment. And if we reflect that there is no commodity which is not, in part or altogether, made up of materials produced under these monopolies, we shall be led, perhaps, to conclude that the proposition of the economists in question is the very reverse of the truth; and that there is scarcely any commodity the value of which is solely determined by the quan tity of labour required to produce it.

The fact is, that all these attempts to identify value with labour, or to distinguish real from relative value, are founded in a gross misconception of the nature of value, which, as we have said above, like length, weight, bulk, or any other quality susceptible of measurement, has essentially a relative only, not a positive meaning. What is real length, or real weight, or real bulk? Just as unintelligible as real value. Value is comparative estimation as an object of exchange; and when used without reference expressed or implied to any particular commodity as its measure, means general value, or value in exchange against goods in general;—as Adam Smith phrased it purchasing power in the general market.'

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