Under the system of the division of labour, and as soon as that system, together with increasing wealth, has been carried to any considerable extent, it becomes absolutely necessary, as we have already seen, to adopt and establish some one, or some very few vendible commodities, as the common measure or measures of value, which may serve the purpose of regulating contracts, or of expressing the values agreed to be transferred, both at distant periods and in immediate exchanges, as well as to regulate the value of every species of written obligation (as bills, tokens, &c.,) which circulate as money. Gold and silver have been universally adopted for this purpose, and as long as these metals retain nearly their present cost and value, there are no other known articles that could with advantage be substituted for them, or that could supply their place, and serve all the purposes of money nearly so well. Still, however, these articles are but arbitrarily chosen to serve these purposes, and are still subject to the possibility of great variations in their value, and consequently may still require to be corrected, or even to be discarded altogether from performing this office if they should happen to vary in a great degree. And what other articles could then with certainty be appealed to if this possible case were actually to happen ?—The natural wages of common labour, or determinate quantities of corn, are the only defined or definable articles which could then be appealed to with certainty to perform the office of correctors, or to determine the value of previous contracts; and to bring this controversy to a short conclusion, we have only to consider what would be the comparative degree of security or certainty to the proprietor of a rent or annuity for a hundred years to come, if it were reserved or stipulated to be paid in gold or silver, in corn, or in days' wages of common labour. Let such rent or annuity be of any given amount-Suppose it were one pound of gold, fifteen pounds of silver, twenty quarters of wheat, or five hun

dred days' wages of common labour, and that these different commodities or quantities of wealth were equivalent in value and exchangeable for one another at the present time, and a very little consideration will be sufficient to convince us that whilst the gold and silver might vary to almost any conceivable extent, the corn and wages could vary but very little. The gold and silver might, at the end of the hundred years, be exchangeable for very different quantities of labour and commodities from those it exchanges for at present; whereas the corn, as we have already seen, could vary comparatively little in its command of either; and the five hundred days' wages of common labour, in whatever commodities they might then be realized, whilst they would be identical in their command of labour, would vary still less than the corn, if they varied at all in their command over commodities in general.

Suppose that, from additional facility or difficulty of production, gold and silver should, at the end of the hundred years, have fallen or risen in value one-half, and should then of course be equivalent, in the one case, to but 10 quarters of wheat and 250 days' wages, and in the other to 40 quarters and 1000 days' wages, is it not plain that our annuitant would in the one case be stripped of one-half of his income, namely, of 10 quarters of wheat, or 250 days' wages, and that in the other his debtor and bondsman would be robbed to double that extent, as he would be required to part with 40 quarters or 1000 days' wages?-Let us suppose farther, the still possible case, that the gold and silver should have risen or fallen in a quadruple rate, and it will appear that the annuitant might starve in the one case, and his debtor be perhaps. ruined or robbed at least to a still greater extent in the other,-events which could not possibly happen if the annuity were payable in corn or in days' wages of common labour.

APPENDIX TO CHAPTER III.

ON THE NATURE OF VALUE.

SECTION I.

INTRODUCTION.

THERE is no question in political economy which has excited greater attention of late, or which has given rise to more conflicting opinions among the present cultivators of that science, than that which relates to the nature of value. In the Ricardo school this question has produced an absolute schism, although most of their writers on both sides agree with their master in pronouncing it " a difficult question." They have all indeed, as it appears to me, very much exaggerated the importance of this question; and yet it may safely be affirmed, that their success in endeavouring to make the subject clearer than it was left by Dr Smith, or to go to the bottom of it, has not by any means corresponded with the magnitude of their labours.

That the subject is not free from intricacy or difficulty when pushed to its utmost metaphysical limits (as is the case indeed with innumerable questions besides this) may be allowed; but it appears to me that all the great practical truths properly and strictly connected with the science of political economy and taxation may be perfectly well settled without going this extreme length, or indeed without any very deep or abstruse treatment of it. As, however, the whole theory and peculiar doctrines of the writers just alluded to seem to be built chiefly, if not wholly, on their peculiar views of this question, we are forced as it were to follow them into the ulterior discussion of it; although it

will be found, I think, more curious than useful, and ought to be looked upon rather as a useless appendage than as any proper or necessary part pertaining to the science; for, although political economy be, as we have before observed, a subordinate branch of the more comprehensive science of metaphysics, it is yet separated by an easy and distinct boundary from its genealogical stem, and has properly nothing to do with the depths of metaphysics; a proof of which will perhaps appear in the further and supererogatory discussion on which we are about to enter of the present question; in which it will be seen that the moment we advance a single step beyond the point to which Dr Smith has conducted it, we are removed altogether from the precincts of this science, and that those writers who attempt to connect this question with political economy beyond the point just mentioned, either involve themselves in a labyrinth whence they can never escape, or envelope themselves in a cloud of impenetrable darkness.

SECTION II.

OF THE PUZZLE FOUNDED ON THE NATURE OF EXCHANGEABLE VALUE, AND ON THE NOTION OF ITS BEING A MERE RELATION OF COMMODITIES BETWEEN THEMSELVES.

LORD LAUDERDALE, in whose Inquiry into the Nature and Origin of Public Wealth is to be found the germ of this discussion, and indeed of almost all the peculiar doctrines of the Ricardo school, has, in the beginning of that work, treated very fully of the market-price of commodities, or their exchangeable value at a particular time and place, and of the variations to which the market-price is liable; and has explained very distinctly the causes of those variations on the principles of supply and demand; but he takes no

notice of the ulterior dependence of supply and demand, and consequently of market-price, upon cost of production. Now it is this last circumstance evidently which is the main point to be attended to, as being that alone which confers any character of science or of utility on the subject, and without keeping it in view, any reasoning about market-price must necessarily be a totally useless and unmeaning discussion about merely accidental relations of quantity or number; it being this circumstance alone, namely, the ultimate dependence of market-price on cost of production, which brings the variations of price or exchangeable value into connexion with human conduct or actions, without which the science of political economy could not exist, nor even be conceived.

But, by keeping this circumstance out of view, it has been attempted to reduce the idea of value to a mere relation of commodities between themselves, without any connexion with mankind, with labour, or with cost of production; and, in conformity with this idea of it, it has been asserted, that value or exchangeable value cannot even be expressed but by a comparison of two commodities; whereas it is manifest that it can be expressed by a comparison of commodities with labour as well; and if the term must be designated a relation, it must be acknowledged that it is a double one at least, and that the connexion of the exchangeable value of commodities with labour and cost of production is indeed the only circumstance which confers any importance on the connexion of the exchangeable value of commodities between themselves.

"Experience shows us," says Lord Lauderdale, "that every thing is uniformly considered as valuable, which, to the possession of qualities that make it the object of the desire of man, adds the circumstance of existing in scarcity. To confer value, therefore, two things appear requisite: 1. That the commodity, as being useful or delightful to man, should be