Memorials and Other Papers by Thomas de Quincey
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Thomas de Quincey >> Memorials and Other Papers
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_Phil_. How so? Mr. Malthus asserts that there is one article of
invariable value; what is more, this article is labor,--the very same
as that formerly alleged for such by Adam Smith; and he has written a
book to prove it.
_X_. True, Philebus, he has done so; and he _now_ holds that
labor is invariable, supposing that his opinions have not altered
within the last twelve months. But he was so far from holding this in
1820 (at which time it was that he chiefly insisted on the distinction
between nominal and real value), that he was not content with the true
arguments against the possibility of an invariable value, but made use
of one, as I shall soon show you, which involves what the
metaphysicians call a _non-ens_--or an idea which includes
contradictory and self-destroying conditions. Omitting, however, the
inconsistency in the idea of _real_ value as conceived by Mr.
Malthus, there is this additional error engrafted upon the Smithian
definition, that it is extended to "the necessaries and conveniences of
life" in general, and no longer confined exclusively to labor. I shall,
therefore, as another case for illustrating and applying the result of
our dispute,
2. Cite a passage from Mr. Malthus' "Political Economy" (p. 59): "If we
are told that the wages of day-labor in a particular country are, at
the present time, fourpence a day, or that the revenue of a particular
sovereign, seven or eight hundred years ago, was four hundred thousand
pounds a year, these statements of nominal value convey no sort of
information respecting the condition of the lower class of people in
the one case, or the resources of the sovereign in the other. Without
further knowledge on the subject, we should be quite at a loss to say
whether the laborers in the country mentioned were starving or living
in great plenty; whether the king in question might be considered as
having a very inadequate revenue, or whether the sum mentioned was so
great as to be incredible. [Footnote: Hume very reasonably doubts the
possibility of William the Conqueror's revenue being four hundred
thousand pounds a year, as represented by an ancient historian, and
adopted by subsequent writers.--Note of Mr. Malthus.] It is quite
obvious that in cases of this kind,--and they are of constant
recurrence,--the value of wages, incomes, or commodities, estimated in
the precious metals, will be of little use to us alone. What we want
further is some estimate of a kind which may be denominated real value
in exchange, implying the quantity of the necessaries and conveniences
of life which those wages, incomes, or commodities, will enable the
possessor of them to command."
In this passage, over and above the radical error about real value,
there is also apparent that confusion, which has misled so many
writers, between _value_ and _wealth_; a confusion which Mr.
Ricardo first detected and cleared up. That we shall not be able to
determine, from the mere money wages, whether the laborers were
"starving or living in great plenty," is certain; and that we
_shall_ be able to determine this as soon as we know the quantity
of necessaries, etc., which those wages commanded, is equally certain;
for, in fact, the one knowledge is identical with the other, and but
another way of expressing it; we must, of course, learn that the
laborer lived in plenty, if we should learn that his wages gave him a
great deal of bread, milk, venison, salt, honey, etc. And as there
could never have been any doubt whether we should learn _this_
from what Mr. Malthus terms the real value, and that we should
_not_ learn it from what he terms the money value, Mr. Malthus may
be assured that there never can have been any dispute raised on that
point. The true dispute is, whether, after having learned that the
laborer lived in American plenty, we shall have at all approximated to
the appreciation of his wages as to real value: this is the question;
and it is plain that we shall not. What matters it that his wages gave
him a great deal of corn, until we know whether corn bore a high or a
low value? A great deal of corn at a high value implies wages of a high
value; but a great deal of corn at a low value is very consistent with
wages at a low value. Money wages, it is said, leave us quite in the
dark as to real value. Doubtless; nor are we at all the less in the
dark for knowing the corn wages, the milk wages, the grouse wages, etc.
_Given_ the value of corn, _given_ the value of milk, _given_ the value
of grouse, we shall know whether a great quantity of those articles
implies a high value, or is compatible with a low value, in the wages
which commanded them; but, _until_ that is given, it has been already
shown that the quantity alone is an equivocal test, being equally
capable of coexisting with high wages or low wages.
_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.
_Phed_. 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."]
_Phed_. 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 qua 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?
_Phed_. 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.
_Phed_. 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.
_Phed_. 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 _Diallelos_ (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.
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