ties, in all the different stages of society, is absolutely necessary to enable us to ascertain the principles which regulate their distribution.

SECTION I.

Value of two sorts—(1.) Exchangeable Value-How it is determined Conditions required to render a Commodity invariable in its Exchangeable Value―(2.)Real Value-How it is determined-Conditions required to render a Commodity invariable in its Real Value-Quantity of Labour required to produce a Commodity different from the quantity of Labour for which it will exchange.

THE value of a commodity may be considered in a double point of view; either, 1st, in relation to the power or capacity which it possesses of exchanging for, or purchasing, certain quantities of labour, or of other commodities obtainable only by means of labour; or, 2d, in relation to the quantity of labour that has been expended in its appropriation or production, or that would be required for that purpose at the period when the investigation is made.

Value, considered in the first point of view, is usually denominated exchangeable or relative value. Value, considered in the second point of view, may be denominated real value.

It is abundantly obvious, that all commodities, possessed of exchangeable, must also be possessed of real value, and vice versa.

I. EXCHANGEABLE VALUE. All commodities

which are in demand, and which require any portion of voluntary labour to obtain them, are possessed of value,—that is, of the power or capacity of exchanging for labour or for other commodities: For, to employ labour in the production or appropriation of a commodity, is really to exchange labour for it; and any one commodity which it has required labour to obtain, will naturally be of the same value as, or will have the power or capacity of exchanging for, any other commodity obtainable only by the same quantity of labour.

But though exchangeable value, or the capacity of exchanging for other things, is a quality inherent in all commodities which are not the spontaneous productions of nature, it is one that can neither be manifested nor appreciated, except when they are compared with each other, or with labour. It is indeed quite impossible to speak of the value of a commodity without either referring to some other commodity or to labour as a standard. No one article, or product, can have any exchangeable value except in relation to some other article or product that either is or may be exchanged for it. It would be just as correct to talk about absolute height or absolute depth, as about absolute value in exchange. A is said to be valuable, or possessed of value, because it has the power of exchanging for a given quantity of B or C; and it is evident, that the quantity of B or C, for which A exchanges, forms the only attainable measure of, or expression for, the value of A; just as the quantity of

A forms the only attainable measure of or expression for the value of B or C.

It follows, from the circumstance of exchangeable value being the power which a commodity has of exchanging for other commodities or for labour, that the exchangeable value of no one commodity can vary without occasioning a simultaneous variation in the exchangeable value of all those with which it is compared. Suppose that a bushel of corn exchanged, in 1820, for five shillings, and that it now exchanges for ten shillings: In this case, it is evi dent that corn has doubled in value as compared with silver; or, which is the same thing, that silver has lost a half of its value as compared with corn. This case is, mutatis mutandis, the identical case of all commodities or products exchanged against one another. If A rises, it must be in relation to some thing else, as B; and if B falls, it must be in relation to something else, as A; so that it is obviously impossible to change the relation of A to B, without at the same time changing that of B to A.

It appears, therefore, that no commodity can be constant or invariable in its exchangeable value, unless it will at all times exchange for, or purchase, the same quantity of all other commodities and of labour. Suppose A exchanges for one B, two C, three D, &c. its exchangeable value will be constant, provided it always preserves its present relation to them, but not otherwise. And it is obvious, that to communicate this constancy of value to A, it would be indispensable that those circumstances, whatever

they may be, that now determine its relation to, or its power to exchange for or purchase the commodities, B, C, D, &c. should, in all time to come, continue to exert precisely the same relative influence on it and them.* Experience, by exhibiting the exchangeable value of commodities in a state of constant fluctuation, sufficiently proves that the circumstances under which they are actually produced are widely different in their operation from those now supposed. Perhaps, however, it may be worth while to observe, that, if commodities had been really produced under these circumstances, not A only, but every other commodity would have been an invariable standard; just as any given commodity in a market may be used as a standard to which to refer the value of all the rest. It is evident, too, that the possession of such an invariable standard would be of no use whatever: All that it would teach us would be, that the causes which first made A exchange for B, continued to affect them both to the same proportional extent; but of the nature of those causes, and the intensity of their operation, we should be left wholly in the dark.

II. REAL VALUE.-Having thus ascertained that the exchangeable value of any one commodity must always be expressed by the relation it bears to some

* The conditions essential to the production of an invariable measure of exchangeable value were first clearly pointed out in the Dissertation on the Nature, Measures, and Causes of Value, p. 17.

other commodity or to labour, the next object that claims our attention is the investigation of the circumstances which determine this relation, or of the regulating principle of value. Suppose A is now

equal to B; if, a month hence, A should become equal to two B, the fact of this variation having taken place, would communicate nothing that could inform us how it had been occasioned. But, if we ascertain the cause why A once exchanged for, or was equal in value to B, we shall, by tracing the operation of this cause, be able to arrive at some more definite conclusions.

It has been already seen that no commodity either is or can be possessed of value, or of the power of exchanging for any thing else, unless it is in demand, and unless some portion of voluntary labour, or, as Dr Smith has termed it, of toil and trouble, has been required for its production er appropriation. Demand, therefore, may be considered as the ultimate source or cause of both exchangeable and real value; and it is the quantity of labour required to render a demand effectual, or the quantity required to produce, or appropriate the commodities wanted, that forms the single principle by which their real value is exclusively regulated and determined. And it will be afterwards shown, that when there are no monopolies, and when the supply of commodities in the market is exactly proportioned to the effectual demand, their exchangeable value is identical with their real value. If, then, it should, under such cir cumstances, be found that the power of a commo