It may be further observed, that the sense in which the author proposes to apply the term value, is so different from the sense in which it is understood in ordinary conversation, and among the best writers, that it would be quite impossible to maintain it with consistency. The author himself, however obstinately, at times, he seems to persevere in the peculiar meaning which he has given to the term value, frequently uses it by itself, without reference to any particular article in which he proposes to express it. Even in the titles of some of his chapters he does this; and when in Chapter XI. he discusses the distinction between value and riches, and in Chapter XI. the causes of value, we are entitled to complain, that he has not acted according to the instructions which he has given to others, and told us, either expressly, or by implication, in what article the value here mentioned is to be expressed.
Again; when he mentions the value of that corn which is produced on lands paying rent, and when he speaks, as he frequently does, of the value of capital,[[61]] he does not tell us in what he means to express the value of corn, or of capital, although he thinks that such a reference, either expressed or implied, is always necessary, and particularly says, “In the preceding pages it has been shown, that we can express the value of a commodity only by the quantity of some other commodity for which it will exchange.”[[62]]
The meaning, therefore, which he gives to the term value is such, that he cannot and does not maintain it consistently himself, much less can he expect that others should so maintain it.
It appears, then, that the author has arbitrarily adopted a meaning of the term value quite unwarranted by the usage of ordinary conversation, directly opposed to the authority of the best writers on political economy, pre-eminently and conspicuously useless; and of such a nature that it cannot be maintained with consistency.
And what does he do with his definition after so adopting it?
He applies it to try the truth of a number of propositions advanced by different writers, who, according to his own showing, have used the term in a very different sense.
This, I own, appears to me much the same kind of proceeding as if a person were to define a straight line to be something essentially different from a line lying evenly between its two extremes, and then were gravely to apply it to one proposition after another of Euclid, and show, as might easily be done, granting the definition, that the conclusions of the Grecian geometer were all wrong.
The perseverance with which the author proceeds gravely to apply his peculiar definition of value to other writers, who have defined it differently, is truly curious, and must be allowed to be a great waste of time and labour. If, as he says he has repeatedly stated, “to know the value of an article at any period is merely to know its relation in exchange to some other commodity;”[[63]] and if, as I believe, no previous writer, in referring to the value of an article at any period ever thought or said that it could be expressed by its relation in exchange to any other contemporary commodity indifferently, it might at once be presumed, without further trouble, that almost all former propositions involving the term value would turn out to be either false or futile. It was quite unnecessary for him, therefore, to go into the detail; but as he has done so, it may be useful to follow him in some of his conclusions, as it may assist in drawing attention to a subject which lies at the bottom of many of the difficulties in political economy, and has not been sufficiently considered.
One of the first effects of the author’s definition is to destroy the distinction between what many writers of great authority have called real value, and nominal value. I have already had occasion to observe, that Adam Smith, by applying the term real wages to express the necessaries and conveniencies of life earned by the labourer, had precluded himself from the power of applying it consistently to the value of a commodity, in order to express its power of commanding labour; because it is well known that the same quantity of labour will both produce and command, at different times and under different circumstances, a very different quantity of the necessaries and conveniencies of life. But putting aside for the present this acknowledged inconsistency of Adam Smith, and taking real value as distinguished from nominal in the sense in which the writers who have so applied it intended, the author’s observations on these writers are not a little extraordinary.
After noticing the doctrines of Adam Smith, Mr. Ricardo, and myself, on the subject of real and nominal value, he says, “After the disquisition on the nature of value in the preceding chapter, the distinction of it in this way must appear to be merely arbitrary and incapable of being turned to any use. What information is conveyed or what advance in argument is effected, by telling us that value estimated in one way is real, but in another, is nominal?”[[64]] He afterwards goes on to say, in reference to a passage in the Templar’s Dialogues, “It would not, however, probably have been written, had the author attended to the simple fact, that value must always imply value in something, and unless that something is indicated, the word conveys no information. Now, as the terms nominal and real do not denote anything in this way, they convey no precise information, and are liable to engender continual disputes, because their meaning is arbitrarily assumed.”[[65]]