Defs. [28] and [30]. In a valuable publication on the Price of Corn, and Wages of Labour, by Sir Edward West, which has just fallen into my hands, he proposes that the price of labour should mean the sum paid for a given quantity of labour of a given character. I quite agree with him in thinking that it would be useful to have some appropriate term to express this meaning; but, as the price of labour has certainly not hitherto been used in this sense, and as it would be, in almost all cases, extremely difficult to give an answer to a question respecting the price of labour so understood, it would certainly be proper to vary the expression in some degree, in order to prepare people for a new meaning. In Definition 30, therefore, I have given this meaning to The price of effective labour.
Def. [31.] It would save time and circumlocution, which is one of the great objects of appropriate terms, if, in speaking of the labour worked up in commodities, the labour worked up in the capital necessary to their production were designated by the term accumulated labour, as contradistinguished from the immediate labour employed by the last capitalist. We must always recollect, however, that labour is not the only element worked up in capital.
Def. [38.] I have used the word elementary, in order to show that money-costs are not meant. On account of the doubt which may arise in this respect when the term costs of production is used alone, and the further doubt, whether ordinary profits are always included, I am decidedly of opinion that the conditions of the supply is a more expressive and less uncertain term for the same meaning. I do not find, however, that generally it is so well understood. I have defined, therefore, the costs of production with the addition of the word elementary, and including profits, as having precisely the same meaning as the conditions of the supply. I once thought it might be better not to include profits in costs of production; but as Adam Smith has included them, and more particularly as the profits worked up in the capital necessary to any production must form a part of the advances or costs in any sense in which the word costs can be used, I think it best, on the whole, to include necessary profits in the elementary costs of production. They are obviously included in the necessary conditions of the supply.
Defs. [39] and [40]. In speaking, of the quantity of labour for which a commodity will exchange, as a measure either of the conditions of its supply or of its value, it must always be understood, that the different kinds of labour which may have been employed to produce it, must be reduced to labour of one description and of the lowest denomination, namely, common agricultural day-labour, estimated on an average throughout the year. This is the kind of labour which is always referred to when labour is spoken of as a measure.
Def. [57.] It is not true, as stated by M. Say, that prices rise in the direct ratio of the quantity demanded, and the inverse ratio of the quantity supplied.[[99]] They only vary in this way, when the demand is understood to mean the sacrifice which the demanders are able and willing to make, in order to supply themselves with what they want; which may be represented in regard to price by the quantity of money ready to be employed in purchases in a market. When the demand for labour is spoken of, it can only relate to extent; and a greater demand can only signify a power of commanding a greater quantity of labour.
Def. [59.] The only productive consumption, properly so called, is the consumption or destruction of wealth by capitalists with a view to reproduction. This is the only marked line of distinction which can be drawn between productive and unproductive consumption. The workman whom the capitalist employs certainly consumes that part of his wages which he does not save, as revenue, with a view to subsistence and enjoyment; and not as capital, with a view to production. He is a productive consumer to the person who employs him, and to the state, but not, strictly speaking, to himself. Consumption is the great purpose and end of all production. The consumption of wealth, as revenue, with a view to support and enjoyment, is even more necessary and important than the consumption of wealth as capital; but their effects are essentially different in regard to the direct production of wealth, and they ought therefore to be distinguished.
I am far from meaning to present the foregoing definitions to the notice of the reader as in any degree complete; either in regard to extent, or correctness. In extent, they have been purposely limited, and in regard to correctness, I am too well aware of the difficulty of the subject to think that I have succeeded in making my definitions embrace all I wish, and exclude all I wish. I am strongly, indeed, disposed to believe, that in the sciences of morals, politics, and political economy, which will not admit of a change in the principal terms already in use, the full attainment of this object is impossible; yet a nearer approach to it is always something gained. I should not indeed have been justified in offering these definitions to the public, if I had not thought that they were, on the whole, less objectionable, and would be more useful in explaining the causes of the wealth of nations than any which I had seen. But I am conscious of some anomalies, and probably there are some more of which I am not conscious. Knowing, however, that the attempt to remove them might destroy useful classifications, I shall not consider a few individual cases, of little importance, as valid objections.
It is known that Adam Smith gave few regular definitions; but the meanings in which he used his terms may be collected from the context, and to these I have, in a considerable degree, adhered. For some I have been indebted to M. Say; others are my own; and in all, I have endeavoured to follow the rules for the definition and use of terms laid down at the beginning of this treatise. I shall consider my object as fully answered, if what I have done, should succeed in drawing that degree of attention to the subject which may lead to the production of something of the same kind, more correct and more useful, and so convincing as to be generally adopted.
FINIS.