the price of each article being its exchangeable value in money, there are no other than current prices in political economy. What Smith calls natural prices have nothing more natural in them, than all the rest. It is the cost of production, the price current of productive services. I do not pretend to deny that you have in Mr. Ricardo a powerful and respectable auxiliary. He was against you in the question of Vent, he contends with you on the question of Value, but notwithstanding my connexion with him, and the mutual esteem we entertain for each other, I have not hesitated to combat his opinions.' Our first inclination for each other, and I am bold to say yours and mine also, was it not for the sake of the public good and of truth? These are Mr. Ricardo's words: "Value is essentially different from wealth, for value does not depend upon the abundance (of the things necessary or agreeable,) but on the difficulty or facility of their production. The manufactural labor of a million of persons will always produce the same value, but not always the same wealth. By more perfect machines, a more practised ability, a better divided labor, the opening of fresh markets giving rise to more advantageous exchanges, a million persons may produce double and treble the quantity of necessary or agreeable things, than they could produce in another social situation, and still they would add nothing to the total value."2 + This argument, founded on uncontested facts, appears perfectly to agree with the opinion you maintain. The question is, how these facts strengthen instead of weaken the doctrine of value, the doctrine which establishes, that wealth consists in the value of the things we possess; confining this word value to the only admitted and exchangeable value. In fact what is value, but that quality susceptible of appreciation, susceptible of more or less, which is inherent in the things we possess. It is the quality which enables us to obtain the things we want, in exchange for the things we have. This value is the greater, in proportion to the quantity which the thing we have can obtain of that we want; for instance, when I have occasion to change my horse for wheat, if my horse is worth six hundred francs, I shall receive double the quantity of bushels of wheat than if he were worth only three hundred francs, and at the same time that part of my wealth would be double. And as the same reasoning may be generally applied to all I possess, it follows that our wealth depends on the value See the notes added by me to the French Translation by M. Constance, of Mr. Ricardo's Principles of Political Economy. 20. 2 Mr. Ricardo's Principles of Political Economy, 2d English Edition, Chap. of the things we possess. This is a consequence that no one can reasonably refuse to admit. You cannot on your part deny, says Mr. Ricardo to me, that we are not richer, when we have more of the necessary or agreeable things to consume, whatever may be their value in another' sense. This in fact I admit, but is it not to have more things to consume, having the power to acquire them in greater quantity? To possess more wealth is to have in our hands wherewith to buy a larger quantity of useful things, a greater quantity of utility, in extending this expression to every thing that is necessary or agreeable to us. Now there is nothing in this proposition, which is contrary to what is true in the definition which Mr. Ricardo and yourself give of wealth. You say that wealth is in the quantity of necessary, or agreeable things we possess. I say so too, but as these words, quantity of necessary or agreeable things, have a vague and arbitrary meaning, which cannot be admitted in a good definition, I define them by their exchangeable value; then the limitation of the idea of utility is the being equal to any other utility, which other persons consent to give in exchange for that you possess; from that time there is equation, one value can be compared with another by the means of a third. A sack of wheat is a riches equal to a piece of cloth, when one can be exchanged against the other for an equal number of crowns. This will serve as a basis for comparisons, will admit of measuring an augmentation, or a diminution-in a word, this is the basis of a science. Without this, political economy does not exist. It is this consideration alone which has brought it to light it is so essential, that you involuntarily do it homage, and there is no one of your arguments in which it is not either expressed or understood; otherwise, you would have caused the science to recede, instead of enriching it with fresh truths. At the same time that your and Mr. Ricardo's definition fails in precision, it fails also in extent. It does not embrace the whole of what our wealth is composed of. What! our wealth confined to material objects either necessary or agreeable! And our talents? What then do you take these for? Are they not productive funds? Do we not derive income from them? greater or less incomes, the same as we derive a greater income from an acre of good land than from an acre of brambles? I know some clever artists, who have no other income than what they derive from their talents, and who are opulent according to your idea they would be no richer than a mere dauber. You cannot deny it, that every value makes part of our riches. of the productive funds we possess. thing that has an exchangeable They are essentially composed These funds are either land, capital, or personal faculties. Of these funds some are alienable, as land; others are alienable and consumable, as capital; others inalienable, and yet consumable, as talents, which perish with their possessor. From these funds proceed all the revenues which keep society alive, and what appears paradoxical, although perfectly true, all these revenues are immaterial, since they are derived from an immaterial quality which is utility. The different utilities produced by our productive funds are compared with each other by their value, which I have no occasion to call exchangeable, because in political economy I recognize no other than exchangeable. As to the difficulty Mr. Ricardo makes, when he says that, by better understood processes, a thousand persons may produce twice and three times as much wealth without producing more value, this is no difficulty, when we consider, (as we ought,) production as an exchange, in which the productive services of our labor, our land, and capital are given in order to obtain productions. By means of these productive services, we acquire all the productions that are in the world, and this by the bye is what gives value to productions; for, after having obtained them by giving value for them, we cannot give them away for nothing. Now since our first property is the productive funds we possess, our first revenue the productive services which proceed from them, we are richer in proportion as our productive services are more valuable, as they obtain in the exchange called production, a greater or less quantity of useful things. And at the same time, as a greater quantity of useful things and their low price, are perfectly synonimous expressions, the producers are rich, when productions are more abundant and cheaper. I say producers in general, because competition compels them to give their productions for what they cost them; so that when producers of wheat or cloth succeed by help of the same productive services in producing a double quantity of wheat, or cloth, all the other producers can purchase a double quantity of wheat or cloth with a like quantity of productive services, or what is the same thing, with the produce they derive from them. Such, Sir, is the well-connected doctrine, without which I declare it to be imposssble to explain the greatest difficulties of political economy, and particularly how a nation can be richer, when its productions diminish in value, although riches are value. You see that I am not afraid to reduce my pretended paradoxes to their simple expression. I strip them naked, and trust them to your equity, to that of Mr. Ricardo, and to the good sense of the public. But at the same time reserving to myself the right of explaining them, if they are ill understood, and of defending them boldly if unjustly attacked. |