When we speak of the value of silver in China, we cannot possibly mean the value of an ounce of Chinese silver brought to London, where, if it were pure, it would be precisely of the same value as an ounce of pure silver which had been in London from time immemorial. What alone we can correctly mean is, the estimation in which the ounce of silver is held in China, determined, at the time, by the state of the supply compared with the demand, and ordinarily by the quantity of Chinese labour and profits necessary to produce it; and if this be what we mean by the value of an ounce of silver in China, there can be no doubt that Chinese labour, and Chinese labour alone, can measure it. Even, however, if we mean the relation of an ounce of silver to all the commodities in China in succession, it would be impossible practically to form any approximation towards a just notion of the result, except by referring the silver to Chinese labour.
It might be allowed, perhaps, that labour would be a still more satisfactory measure of value, in all countries and at all times, if the physical force exerted in a day’s labour were always the same; and probably this is sometimes not far from being the case in a few countries as compared with each other, and more frequently in the same country at different periods. The English agricultural labourers in the time of Edward III., though probably less skilful, worked, I should conceive, for nearly the same number of hours, and exerted nearly the same physical force, as our labourers at present. Under such circumstances, and in the same country, agricultural labour seems to be a measure of value from century to century calculated to satisfy the scruples of the most fastidious. But even when it is acknowledged, that the labourer at different times and in different countries does not always lay down the same portion of his ease, his liberty, and happiness, the quality of labour, as a measure of value, is not essentially impaired; and it appears to me always true, that when commodities in different countries and at different times have been found to command the same quantity of the agricultural labour of each country and time, they may with propriety be said to have been held in the same estimation, and considered as of the same value.
We may now proceed to the definition of some of the most important terms in common use among political economists, particularly those which have been most controverted. Whenever it has been thought necessary either to deviate from the general rule of employing terms according to their ordinary meaning, or to determine between two meanings both of which have some authorities in their favour, I have always been guided in my choice by what appeared to me the superior practical utility of the meaning selected in explaining the causes of the wealth of nations.[[95]]
The reader will be aware, from the manner in which I have treated the subject, and the discussions into which I have allowed myself to enter, that what I consider as the main obstacle to a more general agreement among political economists, is rather the differences of opinion which have prevailed as to the classes of objects which are to be separated from each other by appropriate names, than as to the names which these classes should receive. It seems indeed to be pretty generally and most properly agreed, that the principal names which have been so long in use should remain. It would certainly be an Herculean task to change them, nor would any change which could be adopted in the present state of things remove the real difficulties. It has been most justly observed by Bacon, that “to say, where notions cannot be fitly reconciled, that there wanteth a term or nomenclature for it, is but a shift of ignorance.” When some people think that every sort of gratification, whether arising from immaterial or material objects, from spiritual comfort or comfortable clothing, should be designated by the same appropriate term; while others think it of great use and importance that they should be distinguished, it is obvious that such different notions cannot be reconciled by a new nomenclature. The grand preliminary required is that the notions should be fitly reconciled; and till this is done, a change of names would be perfectly futile. Preserving therefore, generally, the old names, the great practical question is, what they are to include and what they are to exclude?
Chapter X.
DEFINITIONS IN POLITICAL ECONOMY.
WEALTH.
1. The material objects necessary, useful or agreeable to man, which have required some portion of human exertion to appropriate or produce.
UTILITY.
2. The quality of being serviceable or beneficial to mankind. The utility of an object has generally been considered as proportioned to the necessity and real importance of these services and benefits.
All wealth is necessarily useful; but all that is useful is not necessarily wealth.