ticle can be considered as wealth if you have more of it than you need, unless you could exchange it for some other article of equal value that you are in need of.

CHAP. 5.

ON VALUE. INGREDIENTS OF VALUE. EXCHANGEABLE VALUE. MEASURE OF VALUE.

Value consists in the utility artificially conferred on any material object, by which it is rendered capable of contributing to human necessity, comfort or enjoyment. All productive labour, therefore, is not productive strictly speaking, of a material object, but of the value combined with and conferred on the raw material: nor is utility the same as value, unless it be artificially conferred. Air, water, fire, have utility, but no value. You cannot sell or exchange the air that surrounds you, though life cannot proceed without it. The ingredients that give ori gin to value, are capital, labour, skill, and perhaps in some few cases, rent; a subject to be separately treated.

No raw material, in the state that nature presents it to us, has any present value. It has merely the capability of receiv ing value at the hands of human labour exerted to create value or utility, and to combine it with the raw material.

To do this, there must be work shops, tools and imple ments; and the workman must be supported till his work be finished. All this requires capital previously accumulated, and which provides the necessary tools and food.

But the labour must be conducted and the the tools and implements used with foresight and skill, so as to produce the effect intended.

The raw material is in almost all cases the produce of the soil; and as raw material bears a price proportioned to its capability of receiving value, the land that produces it will bring a rent sufficient in amount, in some cases, to enter as an ingredient into the price of the finished article. As in mines, stone and marble quarries, porcellain earth, land producing precious stones as the agates of Andernach, Buhr stone, &c. I say in almost all cases, because a fisherman on the banks of the New foundland pays no rent, though the tenant of a shad or a sal

mon fishery does. When I come to speak of rent as applied to agriculture, I shall shew that it never enters into the price of farming produce, and why. But the ingredients of value, are not exactly synonimous with price. Whatever enters into the cost of the article, must of necessity form one part of the ingredients of its value; but the price demanded for the finished article may be calculated on a part only of the ingredients of value; for rent may be too trifling to be appreciated. But as the raw material cannot in many cases be had, unless it be purchased, the price given for it may form one of the ingredients of its value, when finished by the skill of the workman. The raw diamond is often of far higher price than the labour of the lapidary bestowed upon it. The raw material, therefore, which is the substratum and support of the value given to the finished article, must enter as one of the ingredients of value, if it cannot be procured without being purchased in the first instance, either for a given price paid down, or in the form of rent for the land that produces it.

The greater the quantity of capital, skill, and labour necessary to produce the article in a marketable state, the greater is the prime cost of it: and if none of these items have been misapplied, the greater is the value produced.

All these ingredients are, in fact, reduceable to mere labour of the most simple kind. For the "capital" consists in the labour necessarily expended in building the work shops, and forming the tools and implements. Labour is in like manner necessary to acquire the "skill" employed; and provisions are the mere result of "labour" expended on the produce of land, in the form of human food. All is reducible by ultimate analysis and in fact, to labour exerted without skill. Generally, labour is expended on a raw material in conjunction with capital and skill.. Such labour is of course more costly—of higher value As the labour of a watchmaker, compared with the labour of a spade man. But all seems reducible to simple labour, as the ultimate Even rent may be considered as so many days labour: it was often so considered in feudal times; it is often now, and always may be receivable in that form; and a monied rent may be converted into it. In cases of labour-saving machines, they are resolvable into labour, capital and skill; and as these are resol vable into mere labor, so is machinery.

term.

When a valuable article is thus produced for the purpose: of exchange, the average profit of capital is added to the prime Cost: so that the cost of the raw material, the wages expended in skill and labour, and the usual profit on the capital so managed and employed, adding the legal interest, forms the natural price of the article; or that price which it must produce, or else the capital after some few trials, will no longer be employed on a commodity that does not bring in the usual profit, as well as the cost expended.

This natural price, resolveable into the labour worked up and combined with the article, has been, among other things, considered as the measure of value. But expence may be laid out on an article which is not saleable at all, and therefore has no valne.

The actual measure of value of any given product, is the exchangeable value. This, by the operation of currency-circulating medium-or the standard of the country to which all value is by common consent referred, is the amount of money it will fetch in the market. For that money, is the exponent of the other articles that may be had in exchange, and is therefore the exponent of the exchangeable value of the article in ques tion, at any given time and place.

This money price will fluctuate, with fluctuation, in the character of the circulating medium-or in the market price of bullion-but principally according to the demand and supply. About forty years ago, ribbands for shoe-ties, began to supersede the use of shoe buckles, which have been gradually driven out of the market, not being able to produce half their prime cost; in fact, not being saleable. The demand has ceased. At this moment, there are not one hundred pair of shoe buckles on the 'continent of North America.

Hence although by analysis, the measure of value can be resolved into mere labour, such as that which is exerted without skill or appreciable capital, as that of a digger of the groundyet, in fact, the practical measure of value at any given time and place, is the then current or market price of the commoditythe quantity of labour it will produce to the seller.

Hence also, although the value in use, may depend mainly on the cost of production-and although the natural price be the prime cost plus the profit on the capital employed-and al

though these must be remunerated in order to a regular supply of the article in the market-yet the demand for the article compared with the supply, regulates at the moment, the exchangable value, and is the great source of fluctuation in the market or the measure of value for the time being. The purchaser never asks the seller, what has this cost you? He asks himself, do I want it? What can I afford to give for it?

Hence again, the propriety of regarding exchangeable value as one of the ingredients of wealth. Suppose value given to an article at the expence of one dollar, and equal value of the same kind given to another article at the expence of ten cents, as in the case of a silver buckle and a shoe string; the want of demand for the buckle, annihilates its exchangeable value, and renders it a commodity useless in the hands of the producer, and therefore wanting that ingredient in which wealth mainly consists. If a man had a million pairs of buckles that cost a million of dollars, they would be of no value, for they would not be saleable or exchangeable till converted into some saleable form, and destroyed as buckles.

An article, product, or commodity, may have cost much in the production-its natural price that it ought to fetch in the market may be considerable—the utility conferred on it by the expenditure of prime cost may be considerable-its value founded on that utility may be considerable-and yet the article may be worthless when referred to the common measure of value, if it have not value in exchange-if it be not in demand. If nobody wants it, it cannot be said to possess any value in fact however costly, or however well adapted to supply wants, if those wants can be better supplied by other means. Who would purchase one of Savary's steam engines now?

Neither does the exchangeable value always depend on the prime cost, or on the natural or necessary price, under circumstances where demand does not operate; contrary to the opinion of Mr. Ricardo. For scarcity enhances the exchangeable value, demand remaining unaltered. So does monopoly. So do bounties upon production.

Machinery on its first introduction, lessens prime cost without altering exchangeable value.

So do abbreviated processes, or technical knowledge suddenly encreased.

In all these cases the prime cost, and of course the necessary and natural price, do not operate on the exchangeable value, although the profit of the owner be enhanced for a time by the circumstances above enumerated.

Two theories of exchangeable value have been proposed of late years. That of Dr. Adam Smith and Dr. Malthus, which considers it as varying with scarcity or abundance of capital, and scarcity or abundance of demand and supply.

That of Mr. Ricardo, which considers the labour accumulated on any commodity, as the measure of its exchangeable value: and considers that as a standard of value, which invariably requires the same quantity of labour to produce it.

According to Smith and Malthus, the fluctuation in value of the commodity, depends on variation in its own value or utility. According to Ricardo, on the varying value of labour. The measure of value, according to Smith and Malthus, is the quantity of labour the commodity will purchase.

According to Ricardo, it is the quantity of labour worked up into it.

It is evident from what I have said, that I do not entirely agree with Ricardo. No purchaser cares a cent what the prime cost of an article is: that is not his look out.

is it worth to me the price asked for it?

His only enquiry can be,

It is true, the natural or necessary price must be obtained,

or the market will not be permanently supplied.

What then?

If the buyers do not want the article at the price demanded, they will leave the market to its own hazard.

Hence it follows, that although the natural or necessary price the amount of labour worked up in an article brought to market, is the permanent regulator of its market value, this value will fluctuate in all cases with the fluctuation of demand and supply. These fluctuate by means of commercial restrictions and prohibitions-by means of monopolies and exclusive privileges-by improvements in the mode of production-by speculation.

Thus, what raised the price of cotton in 1825? Surely not the expence attending the cultivation of it, but the speculations in the cotton market.

It has been deemed desirable to ascertain some fixed stand

ard and measure of value. I therefore recur to the subject.