They are the two following—namely, that the increase of value which a cask of wine acquires, by being kept a certain number of years untouched in a cellar, is occasioned by the increased quantity of labour employed upon it; and that an oak tree of a hundred years’ growth, worth 25l., which may not have been touched by man, beast, or machine for a century, derives its whole value from labour.
Mr. Macculloch acknowledges that Mr. Ricardo was inclined to modify his grand principle, that the exchangeable value of commodities depended on the quantity of labour required for their production, so far as to allow that the additional exchangeable value that is sometimes given to commodities, by keeping them after they have been purchased or produced until they become fit to be used, was not to be considered as an effect of labour, but as an equivalent for the profits which the capital laid out on the commodities would have yielded had it been actually employed.[[41]] This was looking at the subject in the true point of view, and showing that he would not get out of the difficulty by changing the meaning of the term labour; but Mr. Macculloch says—
“I confess, however, notwithstanding the hesitation I cannot but feel in differing from so great an authority, that I see no good reason for making this exception. Suppose, to illustrate the principle, that a cask of new wine, which cost 50l., is put into a cellar, and that at the end of twelve months it is worth 55l., the question is, whether ought the 5l. of additional value given to the wine to be considered as a compensation for the time the 50l. worth of capital has been locked up, or ought it to be considered as the value of additional labour actually laid out on the wine. I think that it ought to be considered in the latter point of view, and for this, as it appears to me a most satisfactory and conclusive reason, that if we keep a commodity, as a cask of wine which has not arrived at maturity, and on which therefore a change or effect is to be produced, it will be possessed of additional value at the year’s end; whereas, had we kept a cask of wine which had already arrived at maturity, and on which no beneficial or desirable effect could be produced for a hundred or a thousand years, it would not have been worth a single additional farthing. This seems to prove incontrovertibly that the additional value acquired by the wine during the period it has been kept in the cellar is not a compensation or return for time, but for the effect or change that has been produced on it. Time cannot of itself produce any effect, it merely affords space for really efficient causes to operate; and it is therefore clear, that it can have nothing to do with the value.”[[42]]
On this passage it should be remarked, in the first place, that the question stated in it is not the main question in reference to the new meaning which Mr. Macculloch must give to the term labour, in order to make out his proposition. He acknowledges that the increased value acquired by the wine is either owing to the operation of nature during the year in improving its quality, or to the profits acquired by the capitalist for being deprived for a year from using his capital of 50l. in any other way. But in either case Mr. Macculloch’s language is quite unwarranted. When he uses the expression, “additional labour actually laid out upon the wine,” who could possibly imagine that, instead of meaning human labour, he meant the processes carried on by nature in a cask of wine during the time that it is kept. This is at once giving an entirely new meaning to the term labour.
But, further, it is most justly stated by Mr. Ricardo, that when the powers of nature can be called into action in unlimited abundance, she always works gratis; and her processes never add to the value, though they may add very greatly to the utility of the objects to which they are applied.
This truth is also fully adopted and strongly stated by Mr. Macculloch himself. “All the rude products (he says) and all the productive powers and capacities of nature are gratuitously offered to man. Nature is not niggardly or parsimonious; she neither demands nor receives an equivalent for her favours. An object which it does not require any portion of labour to appropriate or to adapt to our use may be of the very highest utility, but as it is the free gift of nature, it is utterly impossible it can be possessed of the smallest value.”[[43]] Consequently, as the processes which are carrying on in the cask of wine, while it is kept, are unquestionably the free gift of nature, and are at the service of all who want them, it is utterly impossible, even if their effects were ten times greater than they are, that they should add in the smallest degree to the price of the wine. It is, no doubt, perfectly true, as stated by Mr. Macculloch, that if wine were not improved by keeping, it would not be worth a single additional farthing after being kept a hundred or even a thousand years. But this proves nothing but that, in that case, no one would ever think of keeping wine longer than was absolutely necessary for its convenient sale or convenient consumption.
The improvement which wine derives from keeping is unquestionably the cause of its being kept; but when on this account the wine-merchant has kept his wine, the additional price which he is enabled to put upon it is regulated upon principles totally distinct from the average degree of improvement which the wine acquires. It is regulated exclusively, as stated by Mr. Ricardo, by the average profits which the capital engaged in keeping the wine would have yielded if it had been actively employed; and that this is the regulating principle of the additional price, and not the degree of improvement, is quite certain: because it would be universally allowed that if, in the case supposed by Mr. Macculloch, the ordinary rate of profits had been 20 per cent., instead of 10 per cent., a cask of new wine, worth 50l., after it had been kept a year, would have been increased in value 10l. instead of 5l., although the processes of nature and the improvement of the wine were precisely the same in the two cases; and there cannot be the least doubt, as I said before, that if the quality of wine, by a year’s keeping, were ordinarily improved in a degree ten times as great as at present, the prices of wines would not be raised; because, if they were so raised, all wine-merchants who sold kept wines would be making greater profits than other dealers.
Nothing then can be clearer than that the additional value of the kept wine is derived from the additional amount of profits of which it is composed, determined by the time for which the capital was advanced and the ordinary rate of profits.
The value of the oak tree of a hundred years’ growth is derived, in a very considerable degree, from the same cause; though, in rich and cultivated countries, where alone it could be worth 25l., rent would necessarily form a part of this value.
If the number of acorns necessary on an average to rear one good oak were planted by the hand of man, they would be planted on appropriated land; and as land is limited in quantity, the powers of vegetation in the land cannot be called into action by every one who is in possession of acorns, in the same way as the improving operations of nature may be called into action by every person who possesses a cask of wine. But setting this part of the value aside, and supposing the acorns to be planted at a certain expense, it is quite clear, that almost the whole of the remaining value would be derived from the compound interest or profits upon the advances of the labour required for the first planting of the acorns, and the subsequent protection of the young trees. A much larger part, therefore, of the final value of the tree than of the final value of the wine would be owing to profits.