I own that these two necessary qualities of the labour, which commodities will ordinarily command, were practically new to me; and, when forced on my attention, and accompanied by the conviction above described, as to the most correct and useful definition of value, made me view labour as a measure of value, so far approaching towards accuracy, considering the nature of the subject, that it might fairly be called a standard.
The publication was also marked by another peculiarity, which I cannot but consider as of some importance: namely, the constant use of the term labour and profits, instead of the customary one, labour and capital.
It must be allowed that the expression labour and capital is essentially tautological. In every definition of capital I have met with, the means of commanding labour are included; and there can be no doubt that machinery and raw materials require labour for their production of the same general description, and usually in as large a proportion, as the labour advanced by the last capitalist. Speaking loosely, we may indeed use the expression labour and capital, meaning by capital, when so used, all that part of the general description of capital which does not consist of the means of commanding the immediate labour required. But when we are engaged in an inquiry into the elements of value, nothing can be more unphilosophical than to talk of labour and capital. Excluding rent and taxes, the only elements concerned in regulating the value of commodities are labour and profits, including, of course, in such labour, the labour worked up in the raw materials, and that portion of the machinery worn out in the production; and including in the profits, the profits of the producers of the raw materials and machinery. To say that the values of commodities are regulated or determined by the quantity of capital and labour necessary to produce them is essentially false. To say that the values of commodities are regulated by the quantities of labour and profits necessary to produce them is, I believe, essentially true. And if so, it was a point of some importance to substitute the expression labour and profits for the customary one of labour and capital.
I have been detained longer than I intended by the Critical Dissertation on the Nature, Measures, and Causes of Value. There is still matter of animadversion remaining; but were I to go on I should tire my readers, if I have not done it already.
The author, when not under the influence of his peculiar definitions, makes some very just observations; and the work is exceedingly well written; which makes it a matter of greater surprise that its main proposition should be so strikingly adverse to the principle of utility, and so peculiarly calculated to retard the progress of that science which it must have been intended to promote.
I do not think it necessary to the object I have in view, to proceed further with these remarks on the definition and use of terms among political economists. What I have already said, if just, will be sufficient to show that much uncertainty has arisen from our[[84]] negligence on this important point, and much improvement might be expected from greater attention to it. I shall now, therefore, proceed to define some of the principal terms in political economy, as nearly as I can, according to the rules laid down. But before I begin, I think it may be useful to give a summary of the reasons for adopting the subjoined definition of the measure of value.
Chapter IX.
SUMMARY OF THE REASONS FOR ADOPTING THE SUBJOINED DEFINITION OF THE MEASURE OF VALUE.
As a preliminary, it may be proper to state, that it seems absolutely essential to the language of political economy, that the expression value of a commodity, like the expression price of a commodity, should have some fixed and determined sense attached to it. Every person who has either written or talked on the subject of political economy, has been constantly in the habit of using the term without specifically expressing the object of comparison intended: and if it were true, that we might with equal propriety suppose any one of a thousand different objects referred to, it might easily be shown, that all past writers who had used the term value had talked the greatest nonsense; and all future writers must abound in the most tedious circumlocutions and the most futile propositions.
But the author of the Critical Dissertation on Value has certainly done injustice to the writers who have gone before him, in supposing that when they have used the term value of a commodity, no reference was implied, if it was not expressed. As I stated before, they must be considered as referring, in some form or other, either to its general power of purchasing, or, to the estimation in which it was held, determined by the state of its supply compared with the demand, and, on an average, by the elementary costs of production; and as it would be perfectly ridiculous to suppose, that when the values of commodities, at different periods, are spoken of generally, by respectable writers, they could mean to refer to individual commodities not intended to represent, more or less accurately, the above objects of reference; it is obvious, that the ultimate reference implied must be confined to one of these, or their equivalents.
I have already given my reasons for thinking it more correct and useful to refer to the estimation in which a commodity is held, determined as above described, rather than to its general power of purchasing; but, as others may be of a different opinion, it may be useful to include among the reasons for adopting labour as a measure of value, its qualities as a measure of the general power of purchasing.