Nor is the position of Montesquieu, that money-price depends upon the relative quantity of the total commodities, to that of the total money of the nation* at all better founded. What do sellers and buyers know of the existence of any other commodities, but those, that are the objects of their dealing? And what difference could such knowledge make in the demand and supply in respect to those particular commodities? These opinions have originated in the ignorance at once of fact and of principle.

Money or specie has with more plausibility, but in reality with no better ground of truth, been pronounced to be a measure of value. Value may be estimated in the way of price; but it can not be measured, that is to say, compared with a known and invariable measure of intensity, for no such measure has yet been discovered.

Authority, however absolute, can never succeed in fixing the general ratio of value. It may enact, that John, the owner of a sack of wheat, shall give it to Richard for 24 fr.; and so it may that John shall give his sack of wheat for nothing. This enactment will probably rob John to benefit Richard; but it can no more make 24 fr. the exact measure of the value of a sack of wheat, than it can make a sack of wheat worth nothing, by ordering it to be given for nothing.

A yard or a foot is a real measure of length; it always presents to the mind the idea of the self-same degree of length. No matter in what part of the world a man may be, he is quite sure, that a man of 6 feet high in one place is as tall as a man of 6 feet high in another. When I am told that the great pyramid of Ghaizé is 100 toises square at the base, I can measure a space 100 toises square at Paris, or elsewhere, and form an exact notion of the space the pyramid will cover; but when I am told, that a camel is at Cairo worth 50 sequins, that is to say, about 2500 grammes of silver, or 500 fr. in coin, I can form no precise notion of the value of the camel; because, although I may have every reason to believe, that 500 fr. are worth less at Paris than at Cairo, I can not tell what may be the difference of value.

The utmost, therefore, that can be done is, merely to estimate or reckon the relative value of commodities; in other words, to declare, that at a given time and place, one commodity is worth more or less than another: their positive value it is impossible to determine. A house may be said to be worth 20,000fr.; but what idea does that sum present to the mind? The idea of whatever I can purchase with it; which is, in fact, as much as to say, the idea of value equivalent to the house, and not of value of any fixed degree of intensity, or independent of comparison between one commodity and another.

ways a trifle, compared with the value it is employed to circulate. Vide infra, under the head of Bank-notes.

Esprit des Lois, liv. xxii. c. 7.

When two objects of unequal value are both compared to different portions of one specific product, still it is a mere estimate of relative value. One house is said to be worth 20,000 fr. another 10,000fr.; which is simply saying, the former is worth two of the latter. It is true, that, when both are compared to a product capable of separation into equal portions, as money is, a more accurate idea can be formed of the relative value of one to the other; for the mind has no difficulty in conceiving the relation of 2 integers to 1, or 20,000 to 10,000. But any attempt to form an abstract notion of the value of one of these integers must be abortive.

If this be all that is meant by the term, measure of value, I admit that money is such a measure; but so, it should be observed, is every other divisible commodity, though not employed in the character of money. The ratio of the one house to the other will be equally intelligible, if one be said to be worth 1000, and the other only 500, quarters of wheat.

Nor will this measure of relative value, if we may so call it, convey an accurate idea of the ratio of two commodities one to the other, at any considerable distance of time or place. The 1000 quarters of wheat, or 20,000fr., will not be of any use in the comparison of a house in former, with a house in the present times; for the value of silver coin and of wheat have both varied in the interim. A house at Paris, worth 10,000 crowns in the days of Henry IV., would now be worth a great deal more, than another of that value now-a-days. So likewise one in Lower Britanny, worth 20,000fr., is of much more value than one of that price at Paris; for the same reason, that an income of 10,000 fr. is a much larger one in Britanny than at Paris.

Wherefore, it is impossible to succeed in comparing the wealth of different eras or different nations. This, in political economy, like squaring the circle in mathematics, is impracticable, for want of a common mean or measure to go by.

Silver, and coin too, whatever be its material, is a commodity, whose value is arbitrary and variable, like that of commodities in general, and is regulated on every bargain by the mutual accord of the buyer and seller. Silver is more valuable, when it will purchase a large quantity of commodities, than when it will purchase a smaller quantity. It can not, therefore, serve as a measure, the first requisite of which is invariability. Thus, in the assertion of Montesquieu, when speaking of money, that "what is the common measure of all things, should of all things be the least subject to change,' there are no less than three errors in two lines. For, in the first place, it has never been pretended, that money is the measure of all things, but merely that it is the measure of values; secondly, it is not even the measure of values; and, lastly, its value can not be made invariable. If it was the ob

• Esprit des Lois, liv. xxii, c. 3.

ject of Montesquieu to deter governments from altering the standard of their coin, he should have laboured to enforce those sound arguments, which the question would fairly have. supplied him with, instead of dealing in brilliant expressions, which serve to mislead and give currency to error.

It would, however, often be a matter of curiosity, and sometimes even of utility, to be able to compare two values at an interval of time or place; as, for instance, when there is occasion to stipulate for a payment at a distant place, or a rent for a long prospective term.

Smith recommends the value of labour as a less variable, and, consequently, more appropriate, measure of absent or distant value; he reasons thus upon the matter: "Equal quantities of labour, at all times and places, may be said to be of equal value to the labourer. In his ordinary state of health, strength, and spirits, in the ordinary degree of his skill and dexterity, he must always lay down the same portion of his ease, his liberty, and his happiness. The price, which he pays, must always be the same, whatever may be the quantity of goods which he receives in return for it. Of them, indeed, it may sometimes purchase a greater and sometimes a smaller quantity; but it is their value which varies, not that of the labour which purchases them. At all times and places, that is dear, which it is difficult to come at, or which it costs much labour to acquire; and that cheap, which is to be had easily, or with very little labour. Labour alone, therefore, never varying in its own value, is alone the ultimate and real standard, by which the value of all commodities can at all times and places be estimated and compared."*

With great deference to so able a writer, it by no means follows, that, because labour in the same degree is always to the labourer himself of the same value, therefore it must always bear the same value as an object of exchange. Labour, like commodities, may vary in the supply and demand; and its value, like value in general, is determined by the mutual

* Wealth of Nations, book i. c. 5. On this point, Smith observes, that "labour was the first price, the original purchase-money, that was paid for all things. It was not by gold or silver, but by labour, that all the wealth of the world was originally purchased." I think I have succeeded in proving that he is mistaken. Nature executes an essential part of the production of values; and her agency is in most cases paid for, and forms a portion of the value of the product. The profit of land, which is called rent, is paid to the proprietor, who does nothing himself, and stands in place of the original occupant; and it affects the value of the product, raised by the joint agency of nature and industry: the portion of value contributed by nature is not the product of human labour. Capital also, which is, for the most part, the accumulated product of labour, concurs, like nature, in the business of production, and receives in recompense a portion of the product; but the gains, accruing to the capitalist, are quite distinct from the accumulated labour vested in the capital itself, which can be expended or consumed in toto, by one set of persons; while its share in the product, in other words, the interest paid for its use, may be consumed by another.

accord of the adverse interests of buyer and seller, and fluctuates accordingly.

The value of labour is affected materially by its quality. The labour of a strong and intelligent person is worth much more, than that of a weak and ignorant one. Again, labour is more valuable in a thriving community, where there is a lively demand for it, than in a country overloaded with population. In the United States, the daily wages of an artificer amount in silver to three times as much as in France. Are we to infer, that silver has then but of its value in France? The artificer is there better fed, better clothed, and better lodged; which is a convincing proof, that he is really better paid. Labour is probably one of the most fluctuating of values, because at times it is in great request, and at others is offered with that distressing importunity occasionally witnessed in cities where industry is on the decline.

Its value has, therefore, no better title to act as a measure of two values at great distances of time or place, than that of any other commodity. There is, in fact, no such thing as a measure of value, because there is nothing possessed of the indispensable requisite, invariability of value.

In the absence of an exact measure, we must be content to approximate to accuracy; and, to this end, many commodities. of well known value will serve to give a notion, more or less correct, of the value of any specific product. At the same point of time and place, there is little difficulty in the approximation: the value of any given article may be readily measured by almost all others. To ascertain pretty nearly the value of an article amongst the ancients, we must find out some article which there is reason to think has subsequently undergone little change of value, and then compare the quantity of that article given by the ancients and moderns respectively, in exchange for the article in question. Wherefore, silk would be a bad object of comparison; because it was, in the time of Cæsar, procurable from China only, at a most extravagant expense, and, being then no where produced in Europe, must of course have been much dearer than at present. Is there any commodity that has varied less in the intervening period? and, if there be any such, how much of it was then given for an ounce of silk? These are the two points we must inquire into. If any one article can be discovered, that was produced with equal ease and perfection at the two periods, and the consumption of which had a natural tendency to keep pace with its abundance, this article would probably have varied little in value, and may be taken as a tolerable measure of other values.

Ever since the earliest times recorded in history, wheat has been the staple food of the great mass of the population, in all the principal nations of Europe; consequently, their relative

* Humboldt reckons it at from 3fr. 50 cents. to 4 fr. of our money. Essai Pol. sur la Nouvelle Espagne, tom. iii. p. 105. oct. ed.

population must have been influenced by the abundance or scarcity of this article of food, more than of any other: the ratio of the demand to the supply must have been, therefore, at all times nearly the same. There is, besides, no product which I know of, that has undergone less alteration in the costs of production. The agricultural skill of the ancients. was in most respects equal, and in some perhaps superior to our own. Capital, indeed, was dearer amongst them; but that difference was little felt; for, in ancient times, the proprietor was commonly both farmer and capitalist; and the capital embarked in agriculture yielded less return than other investments; because, as more honour was attached to this, than to the other branches of industry, commerce and manufacture, the influx of capital, as well as of labour, into that channel, was greater than into the other two. And, during the middle ages, in spite of the general declension of all the arts, the tillage of arable land was prosecuted with a skill little inferior to that of the present day.

Whence I infer, that the same quantity of wheat must have borne nearly the same value among the ancients, during the middle ages and at the present time. But, as there has all along been a vast difference in the produce of the harvest in one year and another, grain being sometimes so abundant, as to sell extremely low, and at other times so scarce, as to occasion famine, the value of grain must be taken on an average of years, whenever it is made the basis of any calculation.

So much for the estimation of values at distant periods of time.

In

There is equal difficulty in the estimation at great distances of place. The staple articles of national food, which, as such, maintain the greatest uniformity in the ratio of the demand and supply, are very different in different climates. Europe, wheat is the staple; in Asia it is rice: the relative value of neither the one nor the other in Asia and Europe is tolerably steady; nor has the value of Rice in Asia any relation to the value of wheat in Europe. Rice is beyond question less valuable in India, than wheat is in this part of the world; for, besides that the cultivation is less expensive, it yields two crops in the year. This is one reason, why labour is so cheap in India and China.

The article of food in most general use is, therefore, but a bad measure of value at great distances of place. Nor are the precious metals by any means a correct one: their value is indubitably not so great in North America and the West Indies, as in Europe, and much greater in every part of Asia, as the constant efflux of specie thither sufficiently proves.Yet the frequency of communication between these different parts of the world, and the facility of transport, give us reason to suppose them the least liable to fluctuation of value on their passage from one climate and another.

There is happily no necessity, for the purposes of commerce,