Putting the corn and the circulating medium of a country out of the question, the relations of which to labour and the costs of producing various commodities are tolerably well known, I think no one, in ordinary conversation, has ever been heard to express the general power of purchasing by the power of purchasing some one particular commodity. I certainly, at least, myself never recollect to have heard these two very distinct meanings confounded. It would, indeed, sound very strange, if a person returning from India, on being asked what was the value of money in that country, were to mention the quantity of English broad cloth which a given quantity of money would exchange for, and to infer, in consequence, that the value of money was lower in India than in England.
In regard to the opinions and practice of other writers on political economy, most of them have considered the general power of purchasing, and the power of purchasing a particular commodity as so essentially distinct, that they have given them different names. The only authority quoted with approbation by the author, is Colonel Torrens, whose views, as to the nature of value, appear to him, he says, to be sounder than those of any other writer. Yet, what does Colonel Torrens say on this subject?—“The term exchangeable value expresses the power of purchasing with respect to commodities in general. The term price denotes the same power with respect to some particular commodity, the quantity of which is given. Thus, when I speak of the exchangeable value of cotton as rising or falling, I imply, that it will purchase a greater or less quantity of corn, and wine, and labour, and other marketable commodities; but when I talk of the price of cotton as rising or falling, I mean, that it will purchase a greater or less quantity of some one particular commodity, such as corn, or wine, or labour, or money, which is either expressed or understood. Exchangeable value may rise, while price falls, or fall while price rises. For example; if cotton were, from any cause, to acquire twice its former power of purchasing, with respect to goods in general, while gold, the particular commodity in which the price of cotton is expressed, rose in a still higher ratio, and acquired four times its former power in the market, then, though the exchangeable value of cotton would be doubled, its price would fall one half. Again; if cotton would purchase only half the former quantity of commodities, while it purchased twice the quantity of some particular commodity, such as corn, or wine, or labour, or money, then its exchangeable value would have sunk one half, while its price, as expressed in corn, or wine, or labour, or money, became double. And again; if cotton, and the particular commodity in which price is expressed, should rise or fall in the same proportion with each other, then the exchangeable value of cotton, or its general power of purchasing, would fluctuate, while its price remained stationary.”[[56]]
It appears then, that, whether Colonel Torrens’s view of value be quite correct or not, he draws the most marked line of distinction possible between the power of purchasing generally, and the power of purchasing a particular commodity, and is decidedly of opinion, that the latter, which is the sense in which the author uses the term value, should not be called value, but price. The authority of Colonel Torrens, therefore, whose views on the subject of value the author considers as so sound, is directly against him.
But not only does Colonel Torrens attach a very different meaning to the term value, from that in which it is used by the author throughout the greatest part of his work, but the author himself, in his notes and illustrations,[[57]] has given extracts from almost all the distinguished writers in political economy, expressly for the purpose of showing the universality of an opinion respecting the nature and measure of value directly opposed to his own. The writers to whom he refers, are Adam Smith, Sir James Stuart, Lord Lauderdale, M. Storch, M. Say, Mr. Ricardo, myself, Colonel Torrens, Mrs. Marcet, Mr. Mill, the Templar’s Dialogues, and Mr. Blake.
In the case of a proposition the nature of which admits of a logical proof, authority is of no consequence; but in a question which relates to the meaning to be attached to a particular term, it is quite incredible that any person should thus have ventured to disregard it.
Much, however, of inconsistency, of illogical inference, and disregard of authority, might have been forgiven, if the proposed change in the meaning of the term value would introduce a much greater degree of clearness and precision into the language of political economy, and, in that way, be eminently useful to the progress of the science.
But, what would be the consequence of adopting the meaning which the author attaches to the term value, and of allowing, according to his own words, that “the value of a is expressed by the quantity of b for which it will exchange, and the value of b is, in the same way, expressed by the quantity of a?”[[58]] One of these consequences is strikingly described in the following passage of the author’s chapter on Real and Nominal Value, a distinction which he is pleased to call unmeaning. “The value of a commodity denoting its relation in exchange to some other commodity, we may speak of it as money-value, corn-value, cloth-value, according to the commodity with which it is compared: and hence there are a thousand different kinds of value, as many kinds of value as there are commodities in existence, and all are equally real and equally nominal.”[[59]]
This is precision with a vengeance. Now, though I am very far from intending to say that the writers on political economy have been sufficiently agreed as to the precise meaning which they attach to the terms value of a commodity, when no express reference is made to the object with which it is to be compared, yet, by drawing a marked line of distinction between what has been called the real value of commodities and their nominal value, or, more correctly, between their value and their price, they have avoided the prodigious confusion which would arise from a commodity having a thousand or ten thousand different values at the same time. Whenever they use the term value of a commodity alone, and speak of its rising or falling, if they do not mean money-price, they refer either to its power of purchasing generally, or to something expressive of its elementary cost of production.
In either case, some general and very important information is communicated; but the value of a commodity, in the sense understood by the author, might be expressed a hundred different ways, without conveying a rational answer to any person who had inquired about it.
Further; the use of the term value, in the sense understood by the author, is entirely superfluous. It has exactly the same meaning as the term price, except that the term price has this very decided advantage over it, namely, that when the price of a commodity is mentioned, without an express reference to any other object in which it is to be estimated, political economists have universally agreed to understand it as referring to money. This is a prodigious advantage in favour of the term price, and tends greatly to promote both facility and precision in the language of political economy. When I ask, what is the price of wheat in Poland? no one has the least doubt about my meaning, and I should, without fail, get the kind of answer I intended. But if I asked, what was the value of wheat in Poland? I might, according to the author, be answered in a thousand different ways, all equally proper, and yet not one of the answers be of the kind I wanted. Of course, whether I use the term value or price, if I always expressly subjoin the object to which I mean to refer, it will be quite indifferent to which term I resort. But it is vain to suppose that the public will submit to such constant and unnecessary circumlocution. It would quite alter the language of political economy; and the kind of abbreviation which has taken place in application to the term price could not take place in regard to value, according to the doctrines of the author; because, when the value of a commodity is used alone, like the price of a commodity, no one object rather than another is entitled to a preference for the expression of that value. The author says distinctly in a note,[[60]] that money-value has no greater claim to the general term value than any other kind of value. It is quite clear, therefore, that if the term value is only to be applied in the sense in which it is applied by the author, it would be much better to exclude it at once from the vocabulary of political economy as utterly useless, and only calculated to produce confusion.