might be a better measure of value than labour alone; but I am now
convinced that I was wrong, and that labour alone is the true measure.
[G] Whenever it is said that the value of labour rises in the progress
of cultivation, a comparison is made between the value of a given
quantity of labour at two different periods; and when it is added that
wages rise in proportion to the quantity of labour required to produce
them, objects are measured solely by the quantity of labour employed
upon them, although the rate of profits may be totally different.
[H] This proposition is essentially the same as that which is very
clearly and ably expressed by Mr. Ricardo in his chapter on Profits,
(p. 128. 3d ed.) in the following terms: “in all countries and at all
times profits depend on the quantity of labour requisite to provide
necessaries for the labourers on that land, or with that capital which
yields no rent;” a proposition which though incomplete in reference
to the ultimate causes of the variations of profits, contains a most
important truth. From this truth the legitimate deduction appears to
me to be, the constant value of labour; but Mr. Ricardo has formed
his system on a deduction exactly opposite to it. He has, however, in
my opinion, amply compensated for the errors into which he may have
fallen, by furnishing us, at the same time, not only with the means of
their refutation, but the means of improving the science of Political
Economy.
[I] Mr. Ricardo, by supposing gold to be produced always by a certain
quantity of labour and _capital_, is compelled to acknowledge that his
standard “would be a perfect measure of value for all things produced
under the same circumstances precisely as itself, but for no others.”
p. 43. This concession appears to me quite fatal. We want to measure
the value of commodities under _all circumstances_, and it is only gold
obtained exclusively by labour, or labour itself, which can do this.
See _Principles of Political Economy considered with a View to their
Practical Application_, pp. 111 and 118.
[J] It is this rise in the money price of labour, occasioned by the
fall of profits, which Mr. Ricardo considers as that necessary rise in
the _value_ of labour on which he makes so much depend in his system;
but if the foregoing reasoning be well founded, it follows that this
rise is not a rise in the _value_ of labour, but a fall in the value of
money.
[K] This applies to the seed, and the food of the working cattle in
agriculture.
[L] The labour worked up in a commodity could not, in many cases, be
ascertained without considerable difficulty; but the labour which it
will command is always open and palpable.
[M] Practically, in all countries such as South America and Ireland,
where there is a slack demand for labour, and the people are but half
employed, the food wages of labour are high, compared with the work
done.
[N] If profits rise in some departments without falling proportionally
in others, the _average_ rate of profits will have increased, although,
from the difficulty of moving capital, the rate of profits in some
employments may not have had time to rise before the stimulus to such
rise comes to an end by a fresh increase of capital.
[O] This is the view taken of it by Colonel Torrens in his _Production
of Wealth_, which I think the just one; because it makes the proper
distinction between cost and value, on which the great stimulus to
production depends. But he has most unnecessarily and incorrectly given
the same interpretation to _natural price_, which always includes
profits.
[P] In order to exclude demand and supply from the costs of production,
when ordinary profits are considered as making a part of them, it
would be necessary to assume that the corn wages of labour are always
the same, an assumption which would be quite unwarranted, not only in
reference to short periods, but to periods of fifty or sixty years, as
the history of corn wages in this country alone amply testifies (see
ch. iv. sect. 4, of my Princ. of Pol. Econ. &c.); and what but the
state of the demand and supply of corn, compared with labour, prevents
profits in the United States from being 100 per cent.? The quantity
of corn divided between the labourer and capitalist would be amply
sufficient to yield such profits, if the corn wages of labour were no
higher than in England.
[Q] Sect. IV. p. 91, et seq.
[R] One of the most valuable sections in Mr. Tooke’s late work _On
High and Low Prices_, is the seventh, in which he proves the frequent
occurrence of this event, and explains, with great clearness and
knowledge of the subject, the mode in which it takes place.
[S] Inquiry into the Rise of Prices in Europe, p. 15.
[T] Perhaps at the time specifically adverted to, this supposition will
not be allowed. But it is always assumed as a general proposition; and
although 1810 and 11 were years of great manufacturing distress, yet
Mr. Tooke himself brings evidence which shows that manufacturing labour
was particularly high in 1805 and 6.
[U] In poor countries a succession of bad seasons sometimes takes place
without any rise in the price of labour, and in that case, though there
may be a high price of corn, there is no fall in the natural value of
money. It will not be purchased with less labour.
[V] These averages are taken from Lord Lauderdale’s _Further
Considerations on the State of the Currency, published in 1813_.
Appendix, p. 33.
[W] For the foregoing valuable table, and the information accompanying
it, I am indebted to Mr. Mure, of Kircudbright, through the kind
intervention of Mr. M’Culloch, of Edinburgh.
Transcriber’s Notes
Simple typographical errors were corrected. Punctuation, hyphenation,
and spelling were made consistent when a predominant preference was
found in the original book; otherwise they were not changed.
This book has no Table of Contents.