DEFINITIONS IN POLITICAL ECONOMY.
WEALTH.
1. The material objects necessary, useful or agreeable to man, which
have required some portion of human exertion to appropriate or produce.
UTILITY.
2. The quality of being serviceable or beneficial to mankind. The
utility of an object has generally been considered as proportioned to
the necessity and real importance of these services and benefits.
All wealth is necessarily useful; but all that is useful is not
necessarily wealth.
VALUE.
3. Has two meanings—value in use, and value in exchange.
VALUE IN USE.
4. Is synonymous with Utility. It rarely occurs in political economy,
and is never implied by the word value when used alone.
VALUE, OR VALUE IN EXCHANGE.
5. The relation of one object to some other, or others in exchange,
resulting from the estimation in which each is held. When no second
object is specified, the value of a commodity naturally refers to the
causes which determine this estimation, and the object which measures
it.
Value is distinguished from wealth in that it is not confined to
material objects, and is much more dependent upon scarcity and
difficulty of production.
PRODUCTION.
6. The creation of objects which constitute wealth.
PRODUCT, PRODUCE.
7. The portion of wealth created by production.
SOURCES OF WEALTH.
8. Land, labour, and capital. The two original sources, are land and
labour; but the aid which labour receives from capital is applied so
very early, and is so very necessary in the production of wealth, that
it may be considered as a third source.
LAND.
9. The soil, mines, waters, and fisheries of the habitable globe. It is
the main source of raw materials and food.
LABOUR.
10. The exertions of human beings employed with a view to remuneration.
If the term be applied to other exertions, they must be particularly
specified.
PRODUCTIVE LABOUR.
11. The labour which is so directly productive of wealth as to be
capable of estimation in the quantity or value of the products obtained.
UNPRODUCTIVE LABOUR.
12. All labour which is not directly productive of wealth. The terms
productive and unproductive are always used by political economists in a
restricted and technical sense exclusively applicable to the direct
production or non-production of wealth.
INDUSTRY.
13. The exertion of the human faculties and powers to accomplish some
desirable end. No very marked line is drawn in common language, or by
political economists, between industry and labour; but the term industry
generally implies more superintendence and less bodily exertion than
labour.
STOCK.
14. Accumulated wealth, either reserved by the consumer for his
consumption, or kept, or employed with a view to profit.
CAPITAL.
15. That portion of the stock of a country which is kept or employed
with a view to profit in the production and distribution of wealth.
FIXED CAPITAL.
16. That portion of stock employed with a view to profit which yields
such profit while it remains in the possession of the owner.
CIRCULATING CAPITAL.
17. That portion of stock employed with a view to profit which does not
yield such profit till it is parted with.
REVENUE.
18. That portion of stock or wealth which the possessor may annually
consume without injury to his permanent resources. It consists of the
rents of land, the wages of labour, and the profits of stock.
ACCUMULATION OF CAPITAL.
19. The employment of a portion of revenue as capital. Capital may
therefore increase without an increase of stock or wealth.
SAVING.
20. In modern times, implies the accumulation of capital, as few people
now lock up their money in a box.
RENT OF LAND.
21. That portion of the produce of land which remains to the owner after
all the outgoings belonging to its cultivation are paid, including the
ordinary profits of the capital employed.
MONEY-RENT OF LAND.
22. The average rent of land as before defined, estimated in money.
GROSS SURPLUS OF THE LAND.
23. That portion of the produce of land which is not actually consumed
by the cultivators.
WAGES OF LABOUR.
24. The remuneration paid to the labourer for his exertions.
NOMINAL WAGES.
25. The wages which the labourer receives in the current money of the
country.
REAL WAGES.
26. The necessaries, conveniences, and luxuries of life which the wages
of the labourer enable him to command.
THE RATE OF WAGES.
27. The ordinary wages paid to the labourer by the day, week, month, or
year, according to the custom of the place where he is employed. They
are generally estimated in money.
THE PRICE OF LABOUR.
28. Has generally been understood to mean the average money-price of
common day-labour, and is not therefore different from the rate of
wages, except that it more specifically refers to money.
THE AMOUNT OF WAGES.
29. The whole earnings of the labourer in a given time, which may be
much more or much less than the average rate of wages, or the price of
common day-labour.
THE PRICE OF EFFECTIVE LABOUR.
30. The price in money of a given quantity of human exertion of a given
strength and character, which may be essentially different from the
common price of day-labour, or the whole money-earnings of the labourer
in a given time.
ACCUMULATED LABOUR.
31. The labour worked up in the raw materials and tools applied to the
production of other commodities.
PROFITS OF STOCK.
32. When stock is employed as capital in the production and distribution
of wealth, its profits consist of the difference between the value of
the capital advanced, and the value of the commodity when sold or used.
THE RATE OF PROFITS.
33. The per centage proportion which the value of the profits upon any
capital bears to the value of such capital.
THE INTEREST OF MONEY.
34. The net profits of a capital in money separated from the risk and
trouble of employing it.
THE PROFITS OF INDUSTRY, SKILL, AND ENTERPRISE.
35. That portion of the gross profits of capital, independent of
monopoly, which remains after deducting the net profits, or the interest
of money.
MONOPOLY PROFITS.
36. The profits which arise from the employment of capital where the
competition is not free.
CONDITIONS OF THE SUPPLY OF COMMODITIES.
37. The advance of the quantity of accumulated and immediate labour
necessary to their production, with such a per centage upon the whole of
the advances for the time they have been employed as is equivalent to
ordinary profits. If there be any other necessary conditions of the
supply arising from monopolies of any description, or from taxes, they
must be added.
ELEMENTARY COSTS OF PRODUCTION.
38. An expression exactly equivalent to the conditions of the supply.
MEASURE OF THE CONDITIONS OF THE SUPPLY, OR OF THE ELEMENTARY COSTS OF
PRODUCTION.
39. The quantity of labour for which the commodity will exchange, when
it is in its natural and ordinary state.
THE VALUE, MARKET VALUE, OR ACTUAL VALUE, OF A COMMODITY AT ANY PLACE OR
TIME.
40. The estimation in which it is held at that place and time,
determined in all cases by the state of the supply compared with the
demand, and ordinarily by the elementary costs of production which
regulate that state.
THE NATURAL VALUE OF A COMMODITY AT ANY PLACE AND TIME.
41. The estimation in which it is held when it is in its natural and
ordinary state, determined by the elementary costs of its production, or
the conditions of its supply.
MEASURE OF THE MARKET OR ACTUAL VALUE OF A COMMODITY AT ANY PLACE OR
TIME.
42. The quantity of labour which it will command or exchange for at that
place and time.
MEASURE OF THE NATURAL VALUE OF A COMMODITY AT ANY PLACE AND TIME.
43. The quantity of labour for which it will exchange at that place and
time, when it is in its natural and ordinary state.
THE PRICE, THE MARKET PRICE, OR ACTUAL PRICE OF A COMMODITY AT ANY PLACE
AND TIME.
44. The quantity of money for which it exchanges at that place and time,
the money referring to the precious metals.
THE NATURAL PRICE OF A COMMODITY AT ANY PLACE AND TIME.
45. The price in money which will pay the elementary costs of its
production, or the money conditions of its supply.
SUPPLY OF COMMODITIES.
46. The quantity offered, or ready to be immediately offered, for sale.
DEMAND FOR COMMODITIES.
47. Has two distinct meanings: one, in regard to its extent, or the
quantity of commodities purchased; and the other, in regard to its
intensity, or the sacrifice which the demanders are able and willing to
make in order to satisfy their wants.
DEMAND IN REGARD TO ITS EXTENT.
48. The quantity of the commodity purchased, which generally increases
with the increase of the supply, and diminishes with the diminution of
it. It is often the greatest when commodities are selling below the
costs of production.
DEMAND IN REGARD TO ITS INTENSITY.
49. The sacrifice which the demanders are able and willing to make in
order to satisfy their wants. It is this species of demand alone which,
compared with the supply, determines prices and values.
EFFECTUAL DEMAND, IN REGARD TO ITS EXTENT.
50. The quantity of a commodity wanted by those who are able and willing
to pay the costs of its production.
EFFECTUAL DEMAND, IN REGARD TO ITS INTENSITY.
51. The sacrifice which the demanders must make, in order to effectuate
the continued supply of a commodity.
MEASURE OF THE INTENSITY OF THE EFFECTUAL DEMAND.
52. The quantity of labour for which the commodity will exchange, when
in its natural and ordinary state.
EXCESS OF THE DEMAND ABOVE THE SUPPLY.
53. The demand for a commodity is said to be in excess above the supply,
when, either from the diminution of the supply, or the increase of the
effectual demand, the quantity in the market is not sufficient to supply
all the effectual demanders. In this case the intensity of the demand
increases, and the commodity rises, in proportion to the competition of
the demanders, and the sacrifice they are able and willing to make in
order to satisfy their wants.
EXCESS OF THE SUPPLY ABOVE THE DEMAND, OR PARTIAL GLUT.
54. The supply of a commodity is said to be in excess above the demand,
or there is a partial glut, when, either from the superabundance of
supply, or the diminution of demand, the quantity in the market exceeds
the quantity wanted by those who are able and willing to pay the
elementary costs of production. It then falls below these costs in
proportion to the eagerness of the sellers to sell; and the glut is
trifling, or great, accordingly.
GENERAL GLUT.
55. A glut is said to be general, when, either from superabundance of
supply or diminution of demand, a considerable mass of commodities falls
below the elementary costs of production.
A GIVEN DEMAND.
56. A given demand, in regard to price, is a given quantity of money
intended to be laid out in the purchase of certain commodities in a
market; and a given demand, in regard to value, is the command of a
given quantity of labour intended to be employed in the same way.
VARIATIONS OF PRICES AND VALUES.
57. Prices and values vary as the demand directly and the supply
inversely. When the demand is given, prices and values vary inversely as
the supply; when the supply is given, directly as the demand.
CONSUMPTION.
58. The destruction wholly or in part of any portions of wealth.
PRODUCTIVE CONSUMPTION.
59. The consumption or employment of wealth by the capitalist, with a
view to future production.
UNPRODUCTIVE CONSUMPTION, OR SPENDING.
60. The consumption of wealth, as revenue, with a view to the final
purpose of all production—subsistence and enjoyment; but not with a view
to profit.