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THE Word VALUE, it is to be observed, has two different meanings, and fometimes expreffes the utility of fome particular object, and fometimes the power of purchasing other goods which the poffeffion of that object conveys. The one may be called "value in ufe;" the other, "value " in exchange." The things which have the greatest value in ufe have frequently little or no value in exchange; and on the contrary, those which have the greatest value in exchange have frequently little or no value in use. Nothing is more useful than water: but it will purchase fcarce any thing; fcarce any thing can be had in exchange for it. A diamond, on the contrary, has scarce any value in use; but a very great quantity of other goods may frequently be had in exchange for it.

In order to investigate the principles which regulate the exchangeable value of commodities, I fhall endeavour to fhew,

FIRST, what is the real measure of this exchangeable value; or, wherein confifts the real price of all commodities.

SECONDLY, What are the different parts of which this real price is compofed or made up.

AND, laftly, what are the different circumftances which fometimes raise fome or all of thefe different parts of price above, and fometimes fink them below their natural or ordinary rate; or, what are the caufes which fometimes hinder the market price, that is, the actual price of commodities, from coinciding exactly with what may be called their natural price.

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I SHALL endeavour to explain, as fully and CHAP. diftinctly as I can, thofe three fubjects in the three following chapters, for which I must very earnestly entreat both the patience and attention. of the reader: his patience in order to examine a detail which may perhaps in fome places appear unneceffarily tedious; and his attention in order to understand what may, perhaps, after the fulleft explication which I am capable of giving of it, appear ftill in fome degree obfcure. I am always willing to run fome hazard of being tedious in order to be fure that I am perfpicuous; and after taking the utmoft pains that I can to be perfpicuous, fome obfcurity may fill appear to remain upon a subject in its own nature extremely abstracted.


Of the real and nominal Price of Commodities, or of their Price in Labour, and their Price in Money.


VERY man is rich or poor according to

the degree in which he can afford to enjoy the neceffaries, conveniencies, and amufements of human life. But after the divifion of labour has once thoroughly taken place, it is but a very fmall part of these with which a man's own labour can fupply him. The far greater part of them he muft derive from the labour of other


BOOK people, and he must be rich or poor according


to the quantity of that labour which he can command, or which he can afford to purchase. The value of any commodity, therefore, to the person who poffeffes it, and who means not to use or confume it himself, but to exchange it for other commodities, is equal to the quantity of labour which it enables him to purchase or command. Labour, therefore, is the real meafure of the exchangeable value of all commodities.

THE real price of every thing, what every thing really costs to the man who wants to acquire it, is the toil and trouble of acquiring it. What every thing is really worth to the man who has acquired it, and who wants to dispose of it or exchange it for fomething elfe, is the toil and trouble which it can fave to himself, and which it can impose upon other people. What is bought with money or with goods is purchased by labour, as much as what we acquire by the toil of our own body. That money or those goods indeed fave us this toil. They contain the value of a certain quantity of labour which we exchange for what is fuppofed at the time to contain the value of an equal quantity. Labour was the firft price, the original purchase-money that was paid for all things. It was not by gold or by filver, but by labour, that all the wealth of the world was originally purchased; and its value, to those who poffefs it, and who want to exchange it for fome new productions, is precisely equal to the quantity of labour which it can enable them to purchase or command.



WEALTH, as Mr. Hobbes fays, is power. But CHAP. the person who either acquires, or fucceeds to a great fortune, does not neceffarily acquire or fucceed to any political power, either civil or military. His fortune may, perhaps, afford him the means of acquiring both, but the mere poffeffion of that fortune does not neceffarily convey to him either. The power which that poffeffion immediately and directly conveys to him, is the power of purchafing; a certain command over all the labour, or over all the produce of labour which is then in the market. His fortune is greater or lefs, precifely in proportion to the extent of this power; or to the quantity either of other men's labour, or, what is the fame thing, of the produce of other men's labour, which it enables him to purchase or command. The exchangeable value of every thing must always be precisely equal to the extent of this power which it conveys to its owner.

BUT though labour be the real measure of the exchangeable value of all commodities, it is not that by which their value is commonly estimated. It is often difficult to afcertain the proportion between two different quantities of labour. The time spent in two different forts of work will not always alone determine this proportion. The different degrees of hardship endured, and of ingenuity exercised, muft likewise be taken into account. There may be more labour in an hour's hard work than in two hours or in an hour's application to a it coft ten years labour to learn,

eafy business;

trade which
than in a



BOOK month's industry at an ordinary and obvious employment. But it is not eafy to find any accurate measure either of hardfhip or ingenuity. In exchanging indeed the different productions of different forts of labour for one another, fome allowance is commonly made for both. It is adjusted, however, not by any accurate measure, but by the higgling and bargaining of the market, according to that fort of rough equality which, though not exact, is fufficient for carrying on the bufinefs of common life.

EVERY Commodity befides, is more frequently exchanged for, and thereby compared with, other commodities than with labour. It is more natural therefore, to estimate its exchangeable value by the quantity of fome other commodity than by that of the labour which it can purchase. The greater part of people too understand better what is meant by a quantity of a particular commodity, than by a quantity of labour. The one is a plain palpable object; the other an abstract notion, which, though it can be made sufficiently intelligible, is not altogether fo natural and obvious.

BUT when barter ceafes, and money has become the common inftrument of commerce, every particular commodity is more frequently exchanged for money than for any other commodity. The butcher feldom carries his beef or his mutton to the baker, or the brewer, in order to exchange them for bread or for beer; but he carries them to the market, where he exchanges them for money, and afterwards exchanges that


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