These appear to me, I confess, to be very extraordinary observations. It must surely be allowed, that to compare a commodity either with the mass of other commodities, or with the elementary costs of production, is most essentially distinct from comparing it with some particular commodity named. And if so, writers are bound so to express themselves as to convey to their readers, which of the two they intend to refer to. Whether these writers have chosen the very best terms to express these ideas is another question; but that the ideas themselves are quite different, and that it is essential to the language of political economy that they should be distinguished by different terms, cannot admit of a doubt. It appears to me, therefore, almost inconceivable that the author should say, “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?” It might as well be said, that, in speaking of our planetary system, no information is conveyed by using different adjuncts to the term distance, in order to distinguish between the distances of the planets from the sun, and the relations of their distances to each other. And supposing it had been the habit of most writers to call the first distances real and the second relative, would it not be most strange to say that the distinction in this way of distance into two kinds is incapable of being turned to any use, as all distance is relative?
The author is repeatedly dwelling upon the relative nature of value, as if he alone had considered it in this light; but no other writer that I have met with has ever appeared to me to use the term value without an intelligible reference expressed or implied to something else; and when the author says, in the passage above quoted, that value must always imply value in something which ought to be indicated, and that the terms nominal and real do not denote anything in this way, he appears to me, I own, to assert what is entirely without foundation. M. Say, for instance, in a passage quoted by the author in his notes,[[66]] observes, “There is this difference between a real and a relative variation of price; that the former is a change of value arising from an alteration of the changes of production; the latter a change arising from an alteration in the ratio of value of one particular commodity to other commodities.” Now is it possible to say with truth, that the real and relative values here described do not both refer to other objects, and that these objects are not so different as to require to be distinguished?
The author may, perhaps, say, that if both expressions are meant to be relative, why use the terms real, positive, or absolute? The answer is, that the usage of our language allows it, and that nothing is more common than the use of the terms real, positive, and absolute, in contradistinction to relative, when the former terms have relation to some more general object, particularly to anything which is considered as a standard, whether accurate or inaccurate.
Thus, in the illustration before adverted to, although all distances are relative, it would be quite justifiable to say, that if the earth was moving towards the farthest part of her orbit, her positive, absolute, or real distance from the sun was increasing, although her distance relatively to that of some other planet or comet, moving from the sun with greater velocity, was diminishing. Tall and short, rich and poor, are relative terms: yet surely we should be warranted in saying, that Peter was not only taller than his three brothers, but, really or positively, a tall man. In the first case he is said to be tall in relation to three individuals; but a stranger, knowing nothing of the height of these individuals, would obtain very little information from the statement. He would not know whether Peter was four feet, five feet, or six feet high: in the latter case, Peter is said to be tall in relation to the average or standard height of the race of men spoken of; and though the stranger might not have in his mind a perfectly accurate notion of this standard, yet he would immediately have before him the height of Peter within a few inches, instead of a few feet.
On the same principle, would it not be most ridiculous for any person gravely to propose that as rich and poor are relative terms, no one should ever call a man rich without mentioning at the same time the individual in relation to whom he was rich? It is perfectly well known, that when, in any particular place or country, a man is said to be a rich man, the term refers to a sort of loose standard, expressing either a certain command over the goods of this life, or a certain superiority in this respect over the mass of the society, which superiority it had been the custom to mark by this expression. In either case, it would be allowable to call the man really or positively rich. But if the proposed change were adopted, and instead of saying that Mr. John Doe was a rich man, we could only say that he was rich in relation to Mr. Richard Roe, as poor Richard might be little better than a pauper, Mr. Doe might, after all, be in very narrow circumstances.
It is clear, therefore, not only that the terms real and positive may be legitimately applied in contradistinction to relative, when a relation to some more general object or standard is intended; but that the difference between the two sorts of relations is of the utmost importance, and ought to be carefully distinguished. It is not easy to conceive, therefore, how any writer could suppose that the language of political economy would be improved by a definition which would destroy this distinction, and make as many kinds of value as there are commodities, all equally real and equally nominal. In reference to all other political economists, whenever they have used the term value of a commodity, without specifically mentioning the object in which they intended to estimate it, I have always felt myself authorised, consistently with their general language, to consider them as referring tacitly either to the mass of commodities, to the state of the supply compared with the demand, or to the elementary costs of production. But when the author of the Critical Dissertation uses the term value, which he does frequently without specific application, his general doctrine must leave the reader quite at a loss to conjecture what he means.
Proceeding on the same strange misapprehension or perversion of the language of other writers, the author says of the writer of the Templar’s Dialogues, “Following Mr. Ricardo, he appears entirely to lose sight of the relative nature of value, and, as I have remarked in the preceding chapter, to consider it as something positive and absolute; so that if there were only two commodities in the world, and they should both, by some circumstances or other, come to be produced by double the usual quantity of labour, they would both rise in real value, although their relation to each other would be undisturbed. According to this doctrine every thing might at once become more valuable by requiring at once more labour for its production; a position utterly at variance with the truth, that value denotes the relation in which commodities stand to each other as articles of exchange. Real value, in a word, is on this theory considered as the independent result of labour; and, consequently, if under any circumstances the quantity of labour is increased, the real value is increased. Hence the paradox, that it is impossible for a continually to increase in value—in real value observe, and yet command a continually decreasing quantity of b, and this although they were the only two commodities in existence. For it must not be supposed that the author means that a might increase in value in relation to a third commodity c, while it commanded a decreasing quantity of b; a proposition which is too self-evident to be insisted on; but he means that a might increase in a kind of value called real, which has no reference to any other commodity whatever.” Apply to the position of this author the rule recommended in the last chapter; inquire, when he speaks of value, value in what? and all the possible truth on the subject appears in its naked simplicity. He adds afterwards again, “value must be value in something, or in relation to something.”[[67]]
Now let the reader recollect that this passage was written by a person who sets out with saying that value in its ultimate sense appears to mean the esteem in which any object is held, and it will appear most remarkable.
In the first place, what can the author possibly mean by speaking of the kind of value here called real, as if it had no relation to any thing else? The Templar, it must surely be allowed, has explained himself with sufficient clearness that by real value he means value in relation to the producing labour.
Secondly, I would ask the writer, who says that the value of a commodity means the esteem in which it is held, whether the labour required to produce a commodity does not, beyond all comparison, express more nearly the esteem in which the commodity is held, than a reference to some other commodity the producing labour of which is utterly unknown, and may therefore be one day or one thousand days?