I will, to the best of my power, state my objections to your arguments
respecting the measure of value. You have yourself stated, as an
objection to my view on this subject, that a commodity produced with
labour and capital united, cannot be a measure of value for any other
commodities than such as are produced precisely under the same
circumstances, and in this I have agreed that you are substantially
correct. If all commodities were produced in one day and by labour only
without the assistance of capital, they would vary in proportion as the
quantity of labour employed on their production increased or diminished.
If the same quantity of labour was constantly employed on the production
of money, money would be an accurate measure of absolute value, and, if
shrimps or nuts or any other thing rose or fell in such money, it would
only be because more or less labour was employed in procuring them.
Under such circumstances every commodity which was the produce of a
day's labour would naturally command a day's labour, and therefore the
value of a commodity would be in proportion to the quantity of labour
which it would command. But, though such a money would measure
accurately the value of every commodity produced under circumstances
exactly similar, it would not be an accurate measure of the value of
other commodities produced with a large quantity of capital, employed
for a length of time. In the case just supposed a quantity of shrimps
would be as accurate a measure of value as a quantity of money produced
by the same quantity of labour; but, when capital is employed and cloth
is the product of labour and capital, you justly say that cloth is not
a correct measure of the value of shrimps and of silver, picked up by
labour alone, on the sea shore; and yet with singular inconsistency, as
I cannot help thinking, you contend that the shrimps and the silver,
picked up by labour alone on the sea shore, are accurate measures of the
value of cloth. If you are right, then must cloth be also an accurate
measure of value, because the thing measured must be as good a measure
as the thing with which you measure. When I say that L4 and a quarter of
wheat are of the same value, I can measure other values by the quarter
of wheat as well as by the L4. You say: 'It is conceded that, when
labour alone is concerned in the production of commodities, and there is
no question of time, both the absolute and exchangeable values of such
commodities may be accurately measured by the quantity of labour
employed upon them.' Nothing can, I think, be more correct, and it is
perfectly accordant with what I have been saying. Your mistake appears
to me to be this: you show us that under certain conditions a certain
commodity would be a measure of absolute value, and then you apply it to
cases where the conditions are not complied with, and suppose it to be a
measure of absolute value in those cases also. You appear to me, too, to
deceive yourself when you think you prove your proposition, because your
proof only amounts to this, that your measure is a good measure of
exchangeable value but not of absolute value. You say: 'If the
accumulated and immediate labour worked up in a commodity be of any
assumed value, L100 for instance, and the profits of the value of L20,
including the compound profits upon the labour worked up in the
materials, the whole will be of the value of L120. Of this value 1/6
only belongs to profits, the rest or 5/6 may be considered as the
product of pure labour.' This is quite true, whether we value the
commodity by the quantity of labour actually employed upon it, by the
quantity which it will command when brought to market, or by the
quantity of money, or any other commodity, for which it is exchanged;
5/6, in all cases, will belong to the workmen and 1/6 to the master.
'Consequently the value of 5/6 of the produce is determined by the
quantity of labour employed on the whole; and the value of the whole
produce by the quantity of labour employed upon it with the addition of
1/6 of that quantity.' This is really saying no more than that, when
profits are one sixth of the value of the whole commodity (in which no
rent enters), the other 5/6 go to reward the labourers, and that the
portion so going to the labourers may itself be resolved into labour and
profits in the same proportion of 5 and 1. Five men produce six pieces
of cloth, of which 5 are paid to them, the men; if profits fall one
half, the men will receive 5-1/2 pieces, and then you say the cloth is
of less value; but in what medium? In labour, you answer. You appear to
me to advance a proposition that cloth is of less value when it will
exchange for less labour, and to prove it by showing the fact, merely,
that it actually does exchange for less labour.
You say: 'But, when labour is concerned, it follows from what has been
conceded that the value of the produce is determined by the quantity of
labour employed upon it.' By value here you mean absolute value; and
then you immediately apply this measure of absolute value, which is only
conceded in a particular case, to a general proposition, and say
'consequently;' consequently on what? On this particular case;
'consequently the value of 5/6 of the produce is determined by the
quantity of labour employed on the whole,' that is to say 'consequently
the quantity of labour which 5/6 of the produce will command is
determined by the quantity of labour employed on the whole;' the same is
true, in the same sense, of 5/6, 5/7, 5/8, 5/9 or of any other
proportions in which the whole may be divided. My only object has been
to show, and, if I am not mistaken, I have succeeded in showing, that a
measure of value, which is only allowed to be accurate in a particular
case where no capital is employed, is arbitrarily applied by you to
cases where capital and time necessarily enter into the consideration.
I fear I have been guilty of many repetitions. I shall not regret it,
however, if I have made myself understood.
[The last sheet is wanting. The fragment on page 105 does not match this
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NOTE.--On 12th June, 1822, in one of Ricardo's most important
speeches on Resumption (afterwards published as a pamphlet), he
speaks of those who propose to make Corn, on a ten years' average,
the standard of value instead of money. To prove gold more variable
than corn, they and their authorities, Locke and Adam Smith are (he
says) obliged to begin by supposing gold invariable. 'Unless the
medium in which the price of corn is estimated could be asserted
to be invariable in its value, how could corn be said not to have
varied in relative value? If they must admit the medium to be
variable--and who could deny it?--then what became of the argument?'
Nothing is more difficult than to ascertain the variations in the
value of money: 'To do so with any accuracy we should have an
invariable measure of value; but such a measure we never had nor
ever can have.' (Cf. Pol. Econ. and Tax. ch. i. Sec. 7, Works, p. 28.)
But we can speak with accuracy of depreciation; we can see to it
that the standard is always the same standard, and that our currency
conforms to it, even if the standard itself may vary in value. (See
Note to Letter XXXI.)