McCulloch and I did not settle the question of value before we
parted,--it is too difficult a one to settle in a conversation; I heard
everything he had to urge in favour of his view, and promised, during my
holiday, to bestow a good deal of consideration on it. He means exactly
what you say;--he does not contend that commodities exchange for each
other according to the quantity of labour actually worked up in them,
but he constitutes a commodity the general measure, by which he
estimates the value of all others. A pipe of wine kept for three years
has no more labour worked up in it than a pipe of wine kept for a day,
but he says the additional value on account of time must be estimated by
the accumulations which a like amount of capital actively employed in
the support of labour would make in the same time. An oak-tree which has
been growing for 200 years has very little labour actually worked up in
it, but its value is to be estimated by the accumulated capital which
the original labour employed would give in the same time. He and you in
fact differ as to your original measure. I think he could not give any
other good reason for choosing a medium which requires labour and
capital to produce it, rather than one which requires labour only,
excepting that commodities in general require the combination of the
two, and that a measure, to have any claim to be even an approximation
to an accurate one, should itself be produced under circumstances
somewhat similar to the commodities which it is to measure. If all
things required precisely the same quantities of capital and labour, and
for the same length of time, to produce them, any one of them would be
an accurate measure of the rest; but this is not the case; the
conditions admit of infinite variety, and therefore whichever we choose
it can only be an approximation to truth, and we are bound to give good
reasons for preferring it.
I should, indeed, be wanting in candour if I refused to admit that my
money measure would not measure the quantity of labour worked up in
commodities. I have admitted it over and over again. I am also ready to
admit that your money measure will measure exactly the quantity of
labour and profits together of which commodities are composed, but so
will my money measure. Neither of them will measure the quantity of
labour alone worked up in commodities, but they will both measure the
quantity of labour and profits together of which commodities are
composed. Suppose gold always to require the same quantity of labour,
for one year, before it can be brought to market, will you say that all
variations in wages and profits may not be estimated in this medium? You
would indeed say that many of those variations would be ascribable to
the variations in the value of the medium, and not to any alteration in
the value of the thing measured, because you do not think that it is any
proof of invariability in a commodity that it requires always the same
quantity of labour, and the same duration of time to produce it. If I
allow the justice of your objection, I am at liberty to apply the same
to your medium. The same quantity of labour applied for a day will
always produce the same given quantity of gold; gold is therefore an
invariable measure, you say. I find this gold vary in relation to
another commodity which always requires the same quantity of labour and
capital to produce it; you say it is never the gold but it is always the
commodity which varies, and, when you are asked why, you answer because
labour never varies. Double the quantity of labour in a country or
diminish it one half, always leaving the funds which are to employ it at
precisely the same amount, and you tell us, notwithstanding the
condition of the labourer is in the one case a very distressed one, in
the other a very prosperous one, that the value of his labour has not
varied. I cannot subscribe to the justness of this language. The
question is whether you are right, not whether I am wrong. Suppose that
a man in India could pick up in a day precisely the same quantity of
gold as in England, and that all trade in provisions were forbid between
the two countries. The small quantity of rice and clothing in India
which are necessary for the support of a labourer would be of precisely
the same value as the quantity of wheat and clothing necessary for a
labourer in England. But this would not long continue. All manufactured
commodities would be of a high comparative money value in India, and
consequently we should export manufactured commodities and import gold;
the reward of a labourer in England would come to be a much larger
quantity of gold than he could actually pick up here. No gold would be
then obtained in England but by means of importation. Under these
circumstances you would say that money was of a low value in England,
and you would be correct if all men agreed to constitute labour the
measure of value; but in this they do not agree, and, as we should find
that at the very moment that gold was low, relatively to labour, in
England, it was high relatively to manufactured commodities of every
description, with which in fact gold would be purchased from India, if
we took these commodities for the measure, we should be bound to say
that gold was cheap in England and dear in India. You must remember that
the point in dispute is whether labour be the correct measure of value;
you must not then take the fact for granted, and then offer it as a
proof of your correct conclusion.
We leave London for Gatcomb early to-morrow morning.... We shall have
one bed disengaged if you and Mrs. Malthus will come over to us. I am
sorry I cannot ask all your party.
Ever truly yours,
DAVID RICARDO.