_Phil_. Why, then, it passes my comprehension to understand what test remains of real value, if neither money price nor commodity price expresses it. When are wages, for example, at a high real value?
_X_. Wages are at a high real value when it requires much labor to produce wages; and at a low real value when it requires little labor to produce wages: and it is perfectly consistent with the high real value that the laborer should be almost starving; and perfectly consistent with the low real value that the laborer should be living in great ease and comfort.
_Phil_. Well, this may be true; but you must allow that it sounds extravagant.
_X_. Doubtless it sounds extravagant, to him who persists in slipping under his notion of value another and heterogeneous notion, namely, that of wealth. But, let it sound as it may, all the absurdities (which are neither few nor slight) are on the other side. These will discover themselves as we advance. Meantime, I presume that in your use, and in everybody’s use, of the word value, a high value ought to purchase a high value, and that it will be very absurd if it should not. But, as to purchasing a great quantity, that condition is surely not included in any man’s idea of value.
_Phil_. No, certainly; because A is of high value, it does not follow that it must purchase a great quantity; that must be as various as the nature of the thing with which it is compared. But having once assumed any certain thing, as B, it does seem to follow that, however small a quantity A may purchase of this (which I admit may be very small, though the value of A should be very great), yet it does seem to follow, from everybody’s notion of value, that this quantity of B, however small at first, must continually increase, if the value of A be supposed continually to increase.
_X_. This may “seem” to follow; but it has been shown that it does not follow; for if A continually double its value, yet let B continually triple or quadruple its value, and the quantity of B will be so far from increasing, that it will finally become evanescent. In short, once for all, the formula is this: Let A continually increase in value, and it shall purchase continually more and more in quantity– than what? More than it did? By no means; but more than it would have done, but for that increase in value. A has doubled its value. Does it _therefore_ purchase more than it did before of B? No; perhaps it purchases much less; suppose only one fourth part as much of B as it did before; but still the doubling of A’s value has had its full effect; for B, it may happen, has increased in value eight-fold; and, but for the doubling of A, it would, instead of one fourth, have bought only one eighth of the former quantity. A, therefore, by doubling in value, has bought not double in quantity of what it bought before, but double in quantity of what it would else have bought.
The remainder of this dialogue related to the distinction between “relative” value, as it is termed, and “absolute” value; clearing up the true use of that distinction. But, this being already too long, the amount of it will be given hereafter, with a specimen of the errors which have arisen from the abuse of this distinction.
* * * * *
DIALOGUE THE FIFTH.
ON THE IMMEDIATE USES OF THE NEW THEORY OF VALUE.
_X_. The great law which governs exchangeable value has now been stated and argued. Next, it seems, we must ask, what are its uses? This is a question which you or I should not be likely to ask; for with what color of propriety could a doubt be raised about the use of any truth in any science? still less, about the use of a leading truth? least of all, about the use of _the_ leading truth? Nevertheless, such a doubt _has_ been raised by Mr. Malthus.
_Phæd_. On what ground or pretence.
_X_. Under a strange misconception of Mr. Ricardo’s meaning. Mr. Malthus has written a great deal, as you may have heard, against Mr. Ricardo’s principle of value; his purpose is to prove that it is a false principle; independently of which, he contends that, even if it were a true principle, it would be of little use. [Footnote: _Vide_ the foot-note to p. 54 of “The Measure of Value.”]
_Phæd_. Little use? In relation to what?
_X_. Ay, _there_ lies the inexplicable mistake: of little use as a _measure_ of value. Now, this is a mistake for which there can be no sort of apology; for it supposes Mr. Ricardo to have brought forward his principle of value as a standard or measure of value; whereas, Mr. Ricardo has repeatedly informed his reader that he utterly rejects the possibility of any such measure. Thus (at p. 10, edit. 2d), after laying down the _conditio sine quâ non_ under which any commodity could preserve an unvarying value, he goes on to say: “of such a commodity we have no knowledge, and consequently are unable to fix on any standard of value.” And, again (at p. 343 of the same edition), after exposing at some length the circumstances which disqualify “any commodity, or all commodities together,” from performing the office of a standard of value, he again states the indispensable condition which must be realized in that commodity which should pretend to such an office; and again he adds, immediately, “of such a commodity we have no knowledge.” But what leaves this mistake still more without excuse is, that in the third edition of his book Mr. Ricardo has added an express section (the sixth) to his chapter on value, having for its direct object to expose the impossibility of any true measure of value. Setting aside, indeed, these explicit declarations, a few words will suffice to show that Mr. Ricardo could not have consistently believed in any standard or measure of value. What does a standard mean?
_Phæd_. A standard is that which stands still whilst other things move, and by this means serves to indicate or measure the degree in which those other things have advanced or receded.
_X_. Doubtless; and a standard of value must itself stand still or be stationary in value. But nothing could possibly be stationary in value upon Mr. Ricardo’s theory, unless it were always produced by the same quantity of labor; since any alteration in the quantity of the producing labor must immediately affect the value of the product. Now, what is there which can always be obtained by the same quantity of labor? Raw materials (for reasons which will appear when we consider Rent) are constantly tending to grow dearer [Footnote: “Constantly tending to grow dearer”–To the novice in Political Economy, it will infallibly suggest itself that the direct contrary is the truth; since, even in rural industry, though more tardily improving its processes than manufacturing industry, the tendency is always in that direction: agriculture, as an art benefiting by experience, has never yet been absolutely regressive, though not progressive by such striking leaps or sudden discoveries as manufacturing art. But, for all that, it still remains true, as a general principle, that raw materials won from the soil are constantly tending to grow dearer, whilst these same materials as worked up for use by manufacturing skill are constantly travelling upon an opposite path. The reason is, that, in the case of manufacturing improvements, no conquest made is ever lost. The course is never retrogressive towards the worse machinery, or towards the more circuitous process; once resigned, the inferior method is resigned forever. But in the industry applied to the soil this is otherwise. Doubtless the farmer does not, with his eyes open, return to methods which have experimentally been shown to be inferior, unless, indeed, where want of capital may have forced him to do so; but, as population expands, he is continually forced into descending upon inferior soils; and the product of these inferior soils it is which gives the ruling price for the whole aggregate of products. Say that soils Nos. 1, 2, 3, 4, had been hitherto sufficient for a nation, where the figures express the regular graduation downwards in point of fertility; then, when No. 5 is called for (which, producing less by the supposition, costs, therefore, more upon any given quantity), the price upon this last, No. 5, regulates the price upon all the five soils. And thus it happens that, whilst always progressive, rural industry is nevertheless always travelling towards an increased cost. The product of Nos. 1, 2, 3, 4, is continually tending to be cheaper; but when the cost of No. 5 (and so on forever as to the fresh soils required to meet a growing population) is combined with that of the superior soils, the quotient from the entire dividend, 1, 2, 3, 4, 5, is always tending gradually to a higher expression.] by requiring more labor for their production; manufactures, from the changes in machinery, which are always progressive and never retrograde, are constantly tending to grow cheaper by requiring less; consequently, there is nothing which, upon Mr. Ricardo’s theory, can long continue stationary in value. If, therefore, he had proposed any measure of value, he must have forgotten his own principle of value.
_Phil_. But allow me to ask; if that principle is not proposed as a measure of value, in what character _is_ it proposed?
_X_. Surely, Philebus, as the _ground_ of value; whereas a measure of value is no more than a _criterion_ or test of value. The last is simply a _principium cognoscendi_, whereas the other is a _principium essendi_.
_Phil_. But wherein lies the difference?
_X_. Is it possible that you can ask such a question? A thermometer measures the temperature of the air; that is, it furnishes a criterion for ascertaining its varying degrees of heat; but you cannot even imagine that a thermometer furnishes any _ground_ of this heat. I wish to know whether a day’s labor at the time of the English Revolution bore the same value as a hundred years after at the time of the French Revolution; and, if not the same value, whether a higher or a lower. For this purpose, if I believe that there is any commodity which is immutable in value, I shall naturally compare a day’s labor with that commodity at each period. Some, for instance, have imagined that corn is of invariable value; and, supposing one to adopt so false a notion, we should merely have to inquire what quantity of corn a day’s labor would exchange for at each period, and we should then have determined the relations of value between labor at the two periods. In this case, I should have used corn as the _measure_ of the value of labor; but I could not rationally mean to say that corn was the _ground_ of the value of labor; and, if I said that I made use of corn to _determine_ the value of labor, I should employ the word “determine” in the same sense as when I say that the thermometer determines the heat–namely, that it ascertains it, or determines it to my knowledge (as a _principium cognoscendi_). But, when Mr. Ricardo says that the quantity of labor employed on A determines the value of A, he must of course be understood to mean that it _causes_ A to be of this value, that it is the _ground_ of its value, the _principium essendi_ of its value; just as when, being asked what determines a stone to fall downwards rather than upwards, I answer that it is the earth’s attraction, or the principle of gravitation, meaning that this principle _causes_ it to fall downwards; and if, in this case, I say that gravitation “_determines_” its course downwards, I no longer use that word in the sense of _ascertain_; I do not mean that gravitation _ascertains_ it to have descended; but that gravitation has _causatively_ impressed that direction on its course; in other words, I make gravitation the _principium essendi_ of its descent.
_Phæd_. I understand your distinction; and in which sense do you say that Mr. Malthus has used the term Measure of Value–in the sense of a ground, or of a criterion?
_X_. In both senses; he talks of it as “_accounting for_” the value of A, in which case it means a ground of value; and as “_estimating_” the value of A, in which case it means a criterion of value. I mention these expressions as instances; but, the truth is, that, throughout his essay entitled “The Measure of Value Stated and Illustrated” and throughout his “Political Economy” (but especially in the second chapter, entitled “The Nature and Measures of Value”), he uniformly confounds the two ideas of a ground and a criterion of value under a much greater variety of expressions than I have time to enumerate.
_Phil_. But, admitting that Mr. Malthus has proceeded on the misconception you state, what is the specific injury which has thence resulted to Mr. Ricardo?
_X_. I am speaking at present of the uses to be derived from Mr. Ricardo’s principle of value. Now, if it had been proposed as a measure of value, we might justly demand that it should be “ready and easy of application,” to adopt the words of Mr. Malthus (“Measure of Value,” p. 54); but it is manifestly not so; for the quantity of labor employed in producing A “could not in many cases” (as Mr. Malthus truly objects) “be ascertained without considerable difficulty;” in most cases, indeed, it could not be ascertained at all. A measure of value, however, which cannot be practically applied, is worthless; as a measure of value, therefore, Mr. Ricardo’s law of value is worthless; and if it had been offered as such by its author, the blame would have settled on Mr. Ricardo; as it is, it settles on Mr. Malthus, who has grounded an imaginary triumph on his own gross misconception. For Mr. Ricardo never dreamed of offering a standard or fixed measure of value, or of tolerating any pretended measure of that sort, by whomsoever offered.
Thus much I have said for the sake of showing what is not the use of Mr. Ricardo’s principle in the design of its author; in order that he may be no longer exposed to the false criticism of those who are looking for what is not to be found, nor ought to be found, [Footnote: At p. 36 of “The Measure of Value” (in the footnote), this misconception as to Mr. Ricardo appears in a still grosser shape; for not only does Mr. Malthus speak of a “concession” (as he calls it) of Mr. Ricardo as being “quite fatal” to the notion of a standard of value,–as though it were an object with Mr. Ricardo to establish such a standard,–but this standard, moreover, is now represented as being gold. And what objection does Mr. Malthus make to gold as a standard? The identical objection which Mr. Ricardo had himself insisted on in that very page of his third edition to which Mr. Malthus refers.] in his work. On quitting this part of the subject, I shall just observe that Mr. Malthus, in common with many others, attaches a most unreasonable importance to the discovery of a measure of value. I challenge any man to show that the great interests of Political Economy have at all suffered for want of such a measure, which at best would end in answering a few questions of unprofitable curiosity; whilst, on the other hand, without a knowledge of the ground on which value depends, or without some approximation to it, Political Economy could not exist at all, except as a heap of baseless opinions.
_Phæd_. Now, then, having cleared away the imaginary uses of Mr. Ricardo’s principle, let us hear something of its real uses.
_X_. The most important of these I expressed in the last words I uttered: _That_ without which a science cannot exist is commensurate in use with the science itself; being the fundamental law, it will testify its own importance in the changes which it will impress on all the derivative laws. For the main use of Mr. Ricardo’s principle, I refer you therefore to all Political Economy. Meantime, I will notice here the immediate services which it has rendered by liberating the student from those perplexities which previously embarrassed him on his first introduction to the science; I mention two cases by way of specimen.
1. When it was asked by the student what determined the value of all commodities, it was answered that this value was chiefly determined by wages. When again it was asked what determined wages, it was recollected that wages must generally be adjusted to the value of the commodities upon which they were spent; and the answer was in effect that wages were determined by the value of commodities. And thus the mind was entangled in this inextricable circle–that the price of commodities was determined by wages, and wages determined by the price of commodities. From this gross _Diallælos_ (as the logicians call it), or see-saw, we are now liberated; for the first step, as we are now aware, is false: the value of commodities is _not_ determined by wages; since wages express the value of labor; and it has been demonstrated that not the _value_ but the _quantity_ of labor determines the value of its products.
2. A second case, in which Mr. Ricardo’s law has introduced a simplicity into the science which had in vain been sought for before, is this: all former economists, in laying down the component parts of price, had fancied it impossible to get rid of what is termed the _raw material_ as one of its elements. This impossibility was generally taken for granted: but an economist of our times, the late Mr. Francis Horner, had (in the _Edinburgh Review_) expressly set himself to prove it. “It is not true,” said Mr. Horner, “that the thing purchased in every bargain is merely so much labor: the value of the raw material can neither be rejected as nothing, nor estimated as a constant quantity.” Now, this refractory element is at once, and in the simplest way possible, exterminated by Mr. Ricardo’s reformed law of value. Upon the old system, if I had resolved the value of my hat into wages and profits, I should immediately have been admonished that I had forgotten one of the elements: “wages, profits, and raw material, you mean,” it would have been said. Raw material! Well, but on what separate principle can this raw material be valued? or on what other principle than that on which the hat itself was valued? Like any other product of labor, its value is determined by the quantity of labor employed in obtaining it; and the amount of this product is divided between wages and profits as in any case of a manufactured commodity. The raw material of the hat suppose to be beaver: if, then, in order to take the quantity of beavers which are necessary to furnish materials for a thousand hats, four men have been employed for twenty-five days, then it appears that the raw material of a thousand hats has cost a hundred days’ labor, which will be of the same value in exchange as the product of a hundred days’ labor (previously equated and discounted as to its _quality_) in any other direction; as, for example, if a hundred days’ labor would produce two thousand pairs of stockings of a certain quality, then it follows that the raw material of my hat is worth two pairs of such stockings. And thus it turns out that an element of value (which Mr. Horner and thousands of others have supposed to be of a distinct nature, and to resist all further analysis) gives way before Mr. Ricardo’s law, and is eliminated; an admirable simplification, which is equal in merit and use to any of the rules which have been devised, from time to time, for the resolution of algebraic equations.
Here, then, in a hasty shape, I have offered two specimens of the uses which arise from a better law of value; again reminding you, however, that the main use must lie in the effect which it will impress on all the other laws of Political Economy. And reverting for one moment, before we part, to the difficulty of Philebus about the difference between this principle as a _principium cognoscendi_ or measure, and a _principium essendi_ or determining ground, let me desire you to consider these two _essential_ marks of distinction: 1. that by all respectable economists any true measure of value has been doubted or denied as a possibility: but no man can doubt the existence of a ground of value; 2. that a measure is posterior to the value; for, before a value can be measured or estimated, it must exist: but a ground of value must be antecedent to the value, like any other cause to its effect.
* * * * *
DIALOGUE THE SIXTH.
ON THE OBJECTIONS TO THE NEW LAW OF VALUE.
_X_. The two most eminent economists [Footnote: The reader must continue to remember that this paper was written in 1824.] who have opposed the Ricardian doctrines are Mr. Malthus and Colonel Torrens. In the spring of 1820 Mr. Malthus published his “Principles of Political Economy,” much of which was an attack upon Mr. Ricardo; and the entire second chapter of eighty-three pages, “On the Nature and Measures of Value,” was one continued attempt to overthrow Mr. Ricardo’s theory of value. Three years afterwards he published a second attack on the same theory in a distinct essay of eighty-one pages, entitled, “The Measure of Value Stated and Illustrated.” In this latter work, amongst other arguments, he has relied upon one in particular, which he has chosen to exhibit in the form of a table. As it is of the last importance to Political Economy that this question should be settled, I will shrink from nothing that wears the semblance of an argument: and I will now examine this table; and will show that the whole of the inferences contained in the seventh, eighth, and ninth columns are founded on a gross blunder in the fifth and sixth; every number in which columns is falsely assigned.
MR. MALTHUS’ TABLE ILLUSTRATING THE INVARIABLE VALUE OF LABOR AND ITS RESULTS.
(From p. 38 of “The Measure of Value Stated and Illustrated.” London: 1823.)
N. B.–The sole change which has been made in this reprint of the original Table is the assigning of names (_Alpha, Beta_, etc.) to the several cases, for the purpose of easier reference and distinction.
CASE. 1 2 3 4 5 6 7 8 9
Alpha… 150 12 120 25 8 2 10 8.33 12.5 Beta…. 150 13 130 15.38 8.66 1.34 10 7.7 11.53 Gamma… 150 10 100 50 6.6 3.4 10 10 15 Delta… 140 12 120 16.66 8.6 1.4 10 7.14* 11.6 Epsilon. 140 11 110 27.2 7.85 2.15 10 9.09 12.7 Zeta…. 130 12 120 8.3 9.23 0.77 10 8.33 10.8 Eta….. 130 10 100 30 7.7 2.3 10 10 13 Theta… 120 11 110 9 9.17 0.83 10 9.09 10.9 Iota…. 120 10 100 20 8.33 1.67 10 10 12 Kappa… 110 10 100 10 9.09 0.91 10 10 11 Lambda.. 110 9 90 22.2 8.18 1.82 10 11.1 12.2 My…… 100 9 90 11.1 9 1 10 11.1 11.1 Ny…… 100 8 80 25 8 2 10 12.5 12.5 Xi…… 90 8 80 12.5 8.88 1.12 10 12.5 11.25
1.–Quarters of Corn produced by Ten Men. 2.–Yearly Corn Wages to each Laborer.
3.–Yearly Corn Wages of the whole Ten Men. 4.–Rate of Profits under the foregoing Circumstances. 5.–Quantity of Labor required to produce the Wages of Ten Men. 6.–Quantity of Profits on the Advance of Labor. 7.–Invariable Value of the Wages of a given Number of Men. 8.–Value of 100 Quarters of Corn under the varying Circumstances supposed.
9.–Value of the Product of the Labor of Ten Men under the Circumstances supposed.
[Footnote: *This is an oversight on the part of Mr. Malthus, and not an error of the press; for 7.14 would be the value of the 100 quarters on the supposition that the entire product of the ten men (namely, 140 quarters) went to wages; but the wages in this case (Delta) being 120 quarters, the true value on the principle of this table is manifestly 8.33.]
SECTION I.
_Phæd_. Now, X., you know that I abhor arithmetical calculations; besides which, I have no faith in any propositions of a political economist which he cannot make out readily without all this elaborate machinery of tables and figures. Under these circumstances, I put it to you, as a man of feeling, whether you ought to inflict upon me this alarming pile of computations; which, by your gloomy countenance, I see that you are meditating.
_X_. Stop, recollect yourself: not I it is, remember, that impose this elaborate “table” upon you, but Mr. Malthus. The yoke is his. I am the man sent by Providence to lighten this yoke. Surrender yourself, therefore, to my guidance, Phædrus, and I will lead you over the hill by so easy a road that you shall never know you have been climbing. You see that there are nine columns; _that_, I suppose, does not pass your skill in arithmetic. Now, then, to simplify the matter, begin by dismissing from your attention every column but the first and the last; fancy all the rest obliterated.
_Phæd_. Most willingly; it is a heavenly fancy.
_X_. Next look into the first column, and tell me what you see there.
_Phæd_. I see “lots” of 150s and 140s, and other ill-looking people of the same description.
_X_. Well, these numbers express the products of the same labor on land of different qualities. The quantity of labor is assumed to be always the same; namely, the labor of ten men for a year (or one man for ten years, or twenty men for half a year, etc.). The producing labor, I say, is always the same; but the product is constantly varying. Thus, in the case Alpha the product is one hundred and fifty quarters; in the cases Delta and Epsilon, when cultivation has been compelled by increasing population to descend upon inferior land, the product of equal labor is no more than one hundred and forty quarters; and in the case Iota it has fallen to one hundred and twenty quarters. Now, upon Mr. Ricardo’s principle of valuation, I demand to know what ought to be the price of these several products which vary so much in quantity.
_Phæd_. Why, since they are all the products of the same quantity of labor, they ought all to sell for the same price.
_X_. Doubtless; not, however, of necessity for the same money price, since money may itself have varied, in which case the same money price would be really a very different price; but for the same price in all things which have _not_ varied in value. The Xi product, therefore, which is only ninety quarters, will fetch the same real price as the Alpha or Gamma products, which are one hundred and fifty. But, by the way, in saying this, let me caution you against making the false inference that corn is at the same price in the case Xi as in the case Alpha or Gamma; for the inference is the very opposite; since, if ninety quarters cost as much as one hundred and fifty, then each individual quarter of the ninety costs a great deal more. Thus, suppose that the Alpha product sold at four pounds a quarter, the price of the whole would be six hundred pounds. Six hundred pounds, therefore, must be the price of Xi, or the ninety quarters; but _that_ is six pounds, thirteen shillings, four pence, a quarter. This ought to be a needless caution; yet I have known economists of great name stand much in need of it.
_Phæd_. I am sure _I_ stand in need of it, and of all sort of assistance, for I am “ill at these numbers.” But let us go on; what you require my assent to, I understand to be this: that all the different quantities of corn expressed in the first column will be of the same value, because they are all alike the product of ten men’s labor. To this I _do_ assent; and what next? Does anybody deny it?
_X_. Yes, Mr. Malthus: he asserts that the value will not be always the same; and the purpose of the ninth column is to assign the true values; which, by looking into that column, you may perceive to be constantly varying: the value of Alpha, for instance, is twelve and five tenths; the value of Epsilon is twelve and seven tenths; of Iota, twelve; and of Xi, eleven and twenty-five one-hundredths.
_Phæd_. But of what? Twelve and five tenths of what?
_X_. Of anything which, though variable, has in fact happened to be stationary in value; or, if you choose, of anything which is not variable in value.
_Phæd_. Not variable! But there is no such thing.
_X_. No! Mr. Malthus, however, says there is; labor, he asserts, is of unalterable value.
_Phæd_. What! does he mean to say, then, that the laborer always obtains the same wages?
_X_. Yes, the same real wages; all differences being only apparently in the wages, but really in the commodity in which the wages are paid. Let that commodity be wheat; then, if the laborer receives ten quarters of wheat in 1800, and nine in 1820, that would imply only that wheat was about eleven per cent, dearer in the latter year. Or let money be that commodity; then, if the laborer receives this century two shillings, and next century three shillings, this simply argues that money has fallen in value by fifty per cent.
_Phæd_. Why, so it may; and the whole difference in wages may have arisen in that way, and be only apparent. But, then, it may also have arisen from a change in the _real_ value of wages; that is, on the Ricardian principle, in the quantity of labor necessary to produce wages. And this latter must have been the nature of the change, if Alpha, Iota, Xi, etc., should be found to purchase more labor; in which case Mr. Ricardo’s doctrine is not disturbed; for he will say that Iota in 1700 exchanges for twelve, and Kappa in 1800 for eleven, not because Kappa has fallen in that proportion (for Kappa, being the product of the same labor as Iota, _cannot_ fall below the value of Iota), but because the commodity for which they are exchanged has risen in that proportion.
_X_. He will; but Mr. Malthus attempts to bar that answer in this case, by alleging that it is impossible for the commodity in question (namely, labor) to rise or to fall in that or in any other proportion. If, then, the change cannot be in the labor, it must be in Alpha, Beta, etc.; in which case Mr. Ricardo will be overthrown; for they are the products of the same quantity of labor, and yet have not retained the same value.
_Phæd_. But, to bar Mr. Ricardo’s answer, Mr. Malthus must not allege this merely; he must prove it.
_X_. To be sure; and the first seven columns of this table are designed to prove it. Now, then, we have done with the ninth column, and also with the eighth; for they are both mere corollaries from all the rest, and linked together under the plain rule of three. Dismiss these altogether; and we will now come to the argument.
SECTION II.
The table is now reduced to seven columns, and the logic of it is this: the four first columns express the conditions under which the three following ones are deduced as consequences; and they are to be read thus, taking the case Alpha by way of example: Suppose that (by _column one_) the land cultivated is of such a quality that ten laborers produce me one hundred and fifty quarters of corn; and that (by _column two_) each laborer receives for his own wages twelve quarters; in which case (by _column three_) the whole ten receive one hundred and twenty quarters; and thus (by _column four_) leave me for my profit thirty quarters out of all that they have produced; that is, twenty-five per cent. Under these conditions, I insist (says Mr. Malthus) that the wages of ten men, as stated in column three, let them be produced by little labor or much labor, shall never exceed or fall below one invariable value expressed in column seven; and, accordingly, by looking down that column, you will perceive one uniform valuation of 10. Upon this statement, it is manifest that the whole force of the logic turns upon the accuracy with which column three is valued in column seven. If that valuation be correct, then it follows that, under all changes in the quantity of labor which produces them, wages never alter in real value; in other words, the value of labor is invariable.
_Phæd_. But of course you deny that the valuation is correct?
_X_. I do, Phædrus; the valuation is wrong, even on Mr. Malthus’ or any other man’s principles, in every instance; the value is not truly assigned in a single case of the whole fourteen. For how does Mr. Malthus obtain this invariable value of ten? He resolves the value of the wages expressed in column three into two parts; one of which, under the name “_labor_,” he assigns in column five; the other, under the name “_profits_,” he assigns in column six; and column seven expresses the sum of these two parts; which are always kept equal to ten by always compensating each other’s excesses and defects. Hence, Phædrus, you see that–as column seven simply expresses the sum of columns five and six–if those columns are right, column seven cannot be wrong. Consequently, it is in columns five and six that we are to look for the root of the error; which is indeed a very gross one.
_Phil_. Why, now, for instance, take the case Alpha, and what is the error you detect in that?
_X_. Simply, this–that in column five, instead of eight, the true value is 6.4; and in column six, instead of two, the true value is 1.6; the sum of which values is not ten, but eight; and that is the figure which should have stood in column seven.
_Phil_. How so, X.? In column five Mr. Malthus undertakes to assign the quantity of labor necessary (under the conditions of the particular case) to produce the wages expressed in column three, which in this case Alpha are one hundred and twenty quarters. Now, you cannot deny that he has assigned it truly; for, when ten men produce one hundred and fifty (by column one)–that is, each man fifteen–it must require eight to produce one hundred and twenty; for one hundred and twenty is eight times fifteen. Six men and four tenths of a man, the number you would substitute, could produce only ninety-six quarters.
_X_. Very true, Philebus; eight men are necessary to produce the one hundred and twenty quarters expressed in column three. And now answer me: what part of their own product will these eight producers deduct for their own wages?
_Phil_. Why (by column two), each man’s wages in this case are twelve quarters; therefore the wages of the eight men will be ninety- six quarters.
_X_. And what quantity of labor will be necessary to produce these ninety-six quarters?
_Phil_. Each man producing fifteen, it will require six men’s labor, and four tenths of another man’s labor.
_X_. Very well; 6.4 of the eight are employed in producing the wages of the whole eight. Now tell me, Philebus, what more than their own wages do the whole eight produce?
_Phil_. Why, as they produce in all one hundred and twenty quarters, and their own deduction is ninety-six, it is clear that they produce twenty-four quarters besides their own wages.
_X_. And to whom do these twenty-four quarters go?
_Phil_. To their employer, for his profit.
_X_. Yes; and it answers the condition expressed in column four; for a profit of twenty-four quarters on ninety-six is exactly twenty- five per cent. But to go on–you have acknowledged that the ninety-six quarters for wages would be produced by the labor of 6.4 men. Now, how much labor will be required to produce the remaining twenty-four quarters for profits?
_Phil_. Because fifteen quarters require the labor of one man (by column one), twenty-four will require the labor of 1.6.
_X_. Right; and thus, Philebus, you have acknowledged all I wish. The object of Mr. Malthus is to ascertain the cost in labor of producing ten men’s wages (or one hundred and twenty quarters) under the conditions of this case Alpha. The cost resolves itself, even on Mr. Malthus’ principles, into so much wages to the laborers, and so much profit to their employer. Now, you or I will undertake to furnish Mr. Malthus the one hundred and twenty quarters, not (as he says) at a cost of ten men’s labor (for at that cost we could produce him one hundred and fifty quarters by column one), but at a cost of eight. For six men and four tenths will produce the whole wages of the eight producers; and one man and six tenths will produce our profit of twenty-five per cent.
_Phæd_. The mistake, then, of Mr. Malthus, if I understand it, is egregious. In column five he estimates the labor necessary to produce the entire one hundred and twenty quarters–which, he says, is the labor of eight men; and so it is, if he means by labor what produces both wages and profits; otherwise, not. Of necessity, therefore, he has assigned the value both of wages and profits in column five. Yet in column six he gravely proceeds to estimate profits a second time.
_X_. Yes; and, what is still worse, in estimating these profits a second time over, he estimates them on the whole one hundred and twenty; that is, he allows for a second profit of thirty quarters; else it could not cost two men’s labor (as by his valuation it does); for each man in the case Alpha produces fifteen quarters. Now, thirty quarters added to one hundred and twenty, are one hundred and fifty. But this is the _product_ of ten men, and not the _wages_ of ten men; which is the amount offered for valuation in column three, and which is all that column seven professes to have valued.
SECTION III.
_Phæd_. I am satisfied, X. But Philebus seems perplexed. Make all clear, therefore, by demonstrating the same result in some other way. With your adroitness, it can cost you no trouble to treat us with a little display of dialectical skirmishing. Show us a specimen of manoeuvring; enfilade him; take him in front and rear; and do it rapidly, and with a light-horseman’s elegance.
_X_. If you wish for variations, it is easy to give them. In the first argument, what I depended on was this–that the valuation was inaccurate. Now, then, _secondly_, suppose the valuation to be accurate, in this case we must still disallow it to Mr. Malthus; for, in columns five and six, he values by the quantity of producing labor; but that is the Ricardian principle of valuation, which is the very principle that he writes to overthrow.
_Phæd_. This may seem a good _quoad hominem_ argument. Yet surely any man may use the principle of his antagonist, in order to extort a particular result from it? _X_. He may; but in that case will the result be true, or will it not be true?
_Phæd_. If he denies the principle, he is bound to think the result not true; and he uses it as a _reductio ad absurdum_.
_X_. Right; but now in this case Mr. Malthus presents the result as a truth.
_Phil_. Yes, X.; but observe, the result is the direct contradiction of Mr. Ricardo’s result. The quantities of column first vary in value by column the last; but the result, in Mr. Ricardo’s hands, is–that they do not vary in value.
_X_. Still, if in Mr. Malthus’ hands the principle is made to yield a truth, then at any rate the principle is itself true; and all that will be proved against Mr. Ricardo is, that he applied a sound principle unskilfully. But Mr. Malthus writes a book to prove that the principle is _not_ sound.
_Phæd_. Yes, and to substitute another.
_X_. True; which other, I go on _thirdly_ to say, is actually employed in this table. On which account it is fair to say that Mr. Malthus is a _third_ time refuted. For, if two inconsistent principles of valuation be employed, then the table will be vicious, because heteronymous.
_Phil_. _Negatur minor._
_X_. I prove the minor (namely, that two inconsistent principles _are_ employed) by column the ninth; and thence, also, I deduct a _fourth_ and a _fifth_ refutation of the table.
_Phæd_. _Euge!_ Now, this is a pleasant skirmishing.
_X_. For, in column the last, I say that the principle of valuation employed is different from that employed in columns five and six. Upon which I offer you this dilemma: it is–or it is not; choose.
_Phil_. Suppose I say, it is?
_X_. In that case, the result of this table is a case of _idem per idem_; a pure childish tautology.
_Phil_. Suppose I say, it is not?
_X_. In that case, the result of this table is false.
_Phil_. Demonstrate.
_X_. I say, that the principle of valuation employed in column nine is, not the quantity of _producing_ labor, but the quantity of labor _commanded_. Now, if it is, then the result is childish tautology, as being identical with the premises. For it is already introduced into the premises as one of the conditions of the case Alpha (namely, into column two), that twelve quarters of corn shall command the labor of one man; which being premised, it is a mere variety of expression for the very same fact to tell us, in column nine, that the one hundred and fifty quarters of column the first shall command twelve men and five tenths of a man; for one hundred and forty-four, being twelve times twelve, will of course command twelve men, and the remainder of six quarters will of course command the half of a man. And it is most idle to employ the elaborate machinery of nine columns to deduce, as a learned result, what you have already put into the premises, and postulated amongst the conditions.
_Phæd_. This will, therefore, destroy Mr. Malthus’ theory a fourth time.
_X_. Then, on the other hand, if the principle of valuation employed in column nine is the same as that employed in columns five and six, this principle must be the quantity of producing labor, and not the quantity of labor commanded. But, in that case, the result will be false. For column nine values column the first. Now, if the one hundred and fifty quarters of case Alpha are truly valued in column first, then they are falsely valued in column the last; and, if truly valued in column the last, then falsely valued in column the first. For, by column the last, the one hundred and fifty quarters are produced by the labor of twelve and a half men; but it is the very condition of column the first, that the one hundred and fifty quarters are produced by ten men.
_Phæd_. (Laughing). This is too hot to last. Here we have a fifth refutation. Can’t you give us a sixth, X.?
_X_. If you please. Supposing Mr. Malthus’ theory to be good, it shall be impossible for anything whatsoever at any time to vary in value. For how shall it vary? Because the _quantity_ of producing labor varies? But _that_ is the very principle which he is writing to overthrow. Shall it vary, then, because the _value_ of the producing labor varies? But _that_ is impossible on the system of Mr. Malthus; for, according to this system, the value of labor is invariable.
_Phil_. Stop! I’ve thought of a dodge. The thing shall vary because the _quantity_ of labor commanded shall vary.
_X_. But how shall _that_ vary? A can never command a greater quantity of labor, or of anything which is presumed to be of invariable value, until A itself be of a higher value. To command an altered quantity of labor, which (_on any theory_) must be the _consequence_ of altered value, can never be the _cause_ of altered value. No alterations of labor, therefore, whether as to quantity or value, shall ever account for the altered value of A; for, according to Mr. Malthus, they are either insufficient on the one hand, or impossible on the other.
_Phil_. Grant this, yet value may still vary; for suppose labor to be invariable, still profits may vary.
_X_. So that, if A rise, it will irresistibly argue profits to have risen?
_Phil_. It will; because no other element _can_ have risen.
_X_. But now column eight assigns the value of a uniform quantity of corn–namely, one hundred quarters. In case Alpha, one hundred quarters are worth 8.33. What are one hundred quarters worth in the case Iota?
_Phil_. They are worth ten.
_X_. And _that_ is clearly more. Now, if A have risen, by your own admission I am entitled to infer that profits have risen: but what are profits in the case Iota?
_Phil_. By column four they are twenty per cent.
_X_. And what in the case Alpha?
_Phil_. By column four, twenty-five per cent.
_X_. Then profits have fallen in the case Iota, but, because _L_ has risen in case Iota from 8.33 to ten, it is an irresistible inference, on your theory, that profits ought to have risen.
_Phæd. (Laughing)_. Philebus, this is a sharp practice; go on, X., and skirmish with him a little more in this voltigeur style.
N.B.–With respect to “The Templars’ Dialogues,” it may possibly be complained, that this paper is in some measure a fragment. My answer is, that, although fragmentary in relation to the entire _system_ of Ricardo, and that previous _system_ which he opposed, it is no fragment in relation to the radical _principle_ concerned in those systems. The conflicting systems are brought under review simply at the _locus_ of collision: just as the reader may have seen the chemical theory of Dr. Priestley, and the counter-theory of his anti- phlogistic opponents, stated within the limits of a single page. If the principle relied on by either party can be shown to lead into inextricable self-contradiction, _that_ is enough. So much is accomplished in that case as was proposed from the beginning–namely, not to exhaust the _positive_ elements of this system or that, but simply to settle the central logic of their several polemics; to settle, in fact, not the matter of what is evolved, but simply the principle of evolution.