"Into this East."

IV.-AD VALOREM.

In the last paper we saw that just payment of labour consisted in a sum of money which would approximately obtain equivalent labour at a future time: we have now to examine the means of obtaining such equivalence. Which question involves the definition of Value, Wealth, Price, and Produce.

None of these terms are yet defined so as to be understood by the public. But the last, Produce, which one might have thought the clearest of all, is, in use, the most ambiguous; and the examination of the kind of ambiguity attendant on its present employment will best open the way to our work.

In his chapter on Capital,* Mr. J. S. Mill instances, as a capitalist, a hardware manufacturer, who, having intended to spend a certain portion of the proceeds of his business in buying plate and jewels, changes his mind, and "pays it as wages to additional workpeople." The effect is stated by Mr. Mill to be, that "more food is appropriated to the consumption of productive labourers."

Now I do not ask, though, had I written this paragraph, it would surely have been asked of me, What is to become of the silversmiths?. If they are truly unproductive persons, we will acquiesce in their extinction. And though in another part of the same passage, the hardware merchant is supposed also to dispense with a number of servants, whose "food is thus set free for productive purposes," I do not inquire what will be the effect, painful or otherwise, upon the servants, of this emancipation of their food. But I very seriously inquire why ironware is produce, and silverware is not? That the merchant consumes the one, and sells the other, certainly does not constitute the difference, unless it can be shown (which, indeed, I perceive it to be becoming daily more and more the aim of tradesmen to show) that commodities are made to be sold, and not to be consumed. The merchant is an agent of conveyance to the consumer in one case, and is himself the consumer in the other: †

*Book I. chap. iv. ss. 1. To save space, my future references to Mr. Mill's work will be by numerals only, as in this instance, I. iv. 1. Ed. in 2 vols. 8vo, Parker, 1848. † If Mr. Mill had wished to show the difference in result between consumption and sale, he should have represented the hardware merchant as consuming his own goods instead of selling them; similarly, the silver merchant as consuming his own goods instead of selling them. Had he done this, he would have made his position clearer, though less tenable; and perhaps this was the position he really intended to take, tacitly involving his theory, elsewhere stated, and shown in the sequel of this paper to be false, that demand for commoditics is not demand for labour. But by the most

but the labourers are in either case equally productive, since they have produced goods to the same value, if the hardware and the plate are both goods.

And what distinction separates them? It is indeed possible that in the "comparative estimate of the moralist," with which Mr. Mill says political economy has nothing to do (III. i. 2), a steel fork might appear a more substantial production than a silver one: we may grant also that knives, no less than forks, are good produce; and scythes and ploughshares serviceable articles. But how of bayonets? Supposing the hardware merchant to effect large sales of these, by help of the "setting free" of the food of his servants and his silversmith,-is he still employing productive labourers, or, in Mr. Mill's words, labourers who increase "the stock of permanent means of enjoyment" (I. iii. 4). Or if, instead of bayonets, he supply bombs, will not the absolute and final "enjoyment" of even these energetically productive articles (each of which costs ten pounds *) be dependent on a proper choice of time and place for their enfantement ; choice, that is to say, depending on those philosophical considerations with which political economy has nothing to do? †

I should have regretted the need of pointing out inconsistency in any portion of Mr. Mill's work, had not the value of his work proceeded from its inconsistencies. He deserves honour among economists by inadvertently disclaiming the principles which he states, and tacitly introducing the moral considerations with which he declares his science has no connection. Many of his chapters are, therefore, true and valuable; and the only conclusions of his which I have to dispute are those which follow from his premises.

Thus, the idea which lies at the root of the passage we have just been examining, namely, that labour applied to produce luxuries will not support so many persons as labour applied to produce useful articles, is entirely true; but the instance given fails-and in four directions of failure at once-because Mr. Mills has not defined the real meaning of usefulness. The definition which he has given-" capacity to satisfy a desire, or serve a purpose" (III. i. 2)-applies equally to the iron and silver; while the true definition-which he has not given, but which nevertheless underlies the false verbal definition in his mind, and comes out once or twice by accident (as in the words "any support to life or

diligent scrutiny of the paragraph now under examination, I cannot determine whether it is a fallacy pure and simple, or the half of one fallacy supported by the whole of a greater one; so that I treat it here on the kinder assumption that it is one fallacy only.

* I take Mr. Helps' estimate in his essay on War.

† Also when the wrought silver vases of Spain were dashed to fragments by our custom-house officers, because bullion might be imported free of duty, but not brains, was the axe that broke them productive ?—the artist who wrought them unproductive? Or again. If the woodman's axe is productive, is the executioner's? as also, if the hemp of a cable be productive, does not the productiveness of hemp in a halter depend on its moral more than on its material application?

strength" in I. i. 5)—applies to some articles of iron, but not to others, and to some articles of silver, but not to others. It applies to ploughs, but not to bayonets; and to forks, but not to filigree.*

The eliciting of the true definition will give us the reply to our first question, "What is value?" respecting which, however, we must first hear the popular statements.

"The word 'value,' when used without adjunct, always means, in political economy, value in exchange" (Mill, III. i. 3). So that, if two ships cannot exchange their rudders, their rudders are, in politicoeconomic language, of no value to either.

But the subject of political economy is wealth." remarks, page 1.)

- (Preliminary

And wealth "consists of all useful and agreeable objects which possess exchangeable value."-(Preliminary remarks, page 10.). "

It appears, then, according to Mr. Mill, that usefulness and agreeableness underlie the exchange value, and must be ascertained to exist in the thing, before we can esteem it an object of wealth.

Now, the economical usefulness of a thing depends not merely on its own nature, but on the number of people who can and will use it. A horse is useless, and therefore unsaleable, if no one can ride,—a sword if no one can strike, and meat, if no one can eat. Thus every material utility depends on its relative human capacity.

Similarly The agreeableness of a thing depends not merely on its own likeableness, but on the number of people who can be got to like it. The relative agreeableness, and therefore saleableness, of "a pot of the smallest ale," and of "Adonis painted by a running brook," depends virtually on the opinion of Demos, in the shape of Christopher Sly. That is to say, the agreeableness of a thing depends on its relative human disposition. Therefore, political economy, being a science of wealth, must be a science respecting human capacities and dispositions. But moral considerations have nothing to do with political economy (III. i. 2). Therefore, moral considerations have nothing to do with human capacities and dispositions.

* Filigree: that is to say, generally, ornament dependent on complexity, not on art. †These statements sound crude in their brevity; but will be found of the utmost importance when they are developed. Thus, in the above instance, economists have never perceived that disposition to buy is a wholly moral element in demand: that is to say, when you give a man half-a-crown, it depends on his disposition whether he is rich or poor with it-whether he will buy disease, ruin, and hatred, or buy health, advancement, and domestic love. And thus the agreeableness or exchange value of every offered commodity depends on production, not merely of the commodity, but of buyers of it; therefore on the education of buyers, and on all the moral elements by which their disposition to buy this, or that, is formed. I will illustrate and expand into final consequences every one of these definitions in its place: at present they can only be given with extremest brevity; for in order to put the subject at once in a connected form before the reader, I have thrown into one, the opening definitions of four chapters; namely, of that on Value ("Ad Valorem "); on Price ("Thirty Picces "); on Production (“Demeter "); and on Economy ("The Law of the House").

I do not wholly like the look of this conclusion from Mr. Mill's statements:-let us try Mr. Ricardo's.

"Utility is not the measure of exchangeable value, though it is absolutely essential to it."-(Chap. I. sect. i.) Essential in what degree, Mr. Ricardo? There may be greater and less degrees of utility. Meat, for instance, may be so good as to be fit for any one to eat, or so bad as to be fit for no one to eat. What is the exact degree of goodness which is "essential" to its exchangeable value, but not "the measure" of it? How good must the meat be, in order to possess any exchangeable value; and how bad must it be—(I wish this were a settled question in London markets)-in order to possess none?

There appears to be some hitch, I think, in the working even of Mr. Ricardo's principles; but let him take his own example. "Suppose that in the early stages of society the bows and arrows of the hunter were of equal value with the implements of the fisherman. Under such circumstances the value of the deer, the produce of the hunter's day's labour, would be exactly" (italics mine) "equal to the value of the fish, the product of the fisherman's day's labour. The comparative value of the fish and game would be entirely regulated by the quantity of labour realized in each." (Ricardo, chap. iii. On Value.)

Indeed! Therefore, if the fisherman catches one sprat, and the huntsman one deer, one sprat will be equal in value to one deer; but if the fisherman catches no sprat, and the huntsman two deer, no sprat will be equal in value to two deer?

an

Nay; but-Mr. Ricardo's supporters may say he means, on average;—if the average product of a day's work of fisher and hunter be one fish and one deer, the one fish will always be equal in value to the one deer.

Might I inquire the species of fish. Whale? or whitebait ?*

*Perhaps it may be said, in farther support of Mr. Ricardo, that he meant, "when the utility is constant or given, the price varies as the quantity of labour." If he meant this, he should have said it; but, had he meant it, he could have hardly missed the necessary result, that utility would be one measure of price (which he expressly denies it to be); and that, to prove saleableness, he had to prove a given quantity of utility, as well as a given quantity of labour: to wit, in his own instance, that the deer and fish would each feed the same number of men, for the same number of days, with equal pleasure to their palates. The fact is, he did not know what he meant himself. The general idea which he had derived from commercial experience, without being able to analyze it, was, that when the demand is constant, the price varies as the quantity of labour required for production; or,-using the formula I gave in last paper-when y is constant, ry varies as x. But demand never is, nor can be, ultimately constant, if x varics distinctly; for, as price rises, consumers fall away; and as soon as there is monopoly (and all scarcity is a form of monopoly; so that every commodity is affected occasionally by some colour of monopoly), y becomes the most influential condition of the price. Thus the price of a painting depends less on its merit than on the interest taken in it by the public; the price of singing less on the labour of the singer than the number of persons who desire to hear him; and the price of gold less on the scarcity which affects it in common with

It would be waste of time to pursue these fallacies farther; we will seek for a true definition.

Much store has been set for centuries upon the use of our English classical education. It were to be wished that our well-educated merchants recalled to mind always this much of their Latin schooling,—that the nominative of valorem (a word already sufficiently familiar to them) is valor; a word which, therefore, ought to be familiar to them. Valor, from valere, to be well, or strong (vyaívw);—strong, in life (if a man), or valiant; strong, for life (if a thing), or valuable. To be "valuable," therefore, is to "avail towards life." A truly valuable or availing thing is that which leads to life with its whole strength. In proportion as it does not lead to life, or as its strength is broken, it is less valuable; in proportion as it leads away from life, it is unvaluable or malignant.

The value of a thing, therefore, is independent of opinion, and of quantity. Think what you will of it, gain how much you may of it, the value of the thing itself is neither greater nor less. For ever it avails, or avails not; no estimate can raise, no disdain depress, the power which it holds from the Maker of things and of men.

The real science of political economy, which has yet to be distinguished from the bastard science, as medicine from witchcraft, and astronomy from astrology, is that which teaches nations to desire and labour for the things that lead to life; and which teaches them to scorn and destroy the things that lead to destruction. And if, in a state of infancy, they suppose indifferent things, such as excrescences of shell-fish, and pieces of blue and red stone, to be valuable, and spend large measure of the labour which ought to be employed for the extension and ennobling of life, in diving or digging for them, and cutting them into various shapes,— or if, in the same state of infancy, they imagine precious and beneficent things, such as air, light, and cleanliness, to be valueless,-or if, finally, they imagine the conditions of their own existence, by which alone they can truly possess or use anything, such, for instance, as peace, trust, and love, to be prudently exchangeable, when the market offers, for gold, iron, or excrescences of shells-the great and only science of Political Economy teaches them, in all these cases, what is vanity, and what substance;

cerium or iridium, than on the sun-like colour and unalterable purity by which it attracts the admiration and answers the trust of mankind.

It must be kept in mind, however, that I use the word "demand" in a somewhat different sense from economists usually. They mean by it "the quantity of a thing sold." I mean by it "the force of the buyer's capable intention to buy." In good English, a person's "demand" signifies, not what he gets, but what he asks for.

Economists also do not notice that objects are not valued by absolute bulk or weight, but by such bulk and weight as is necessary to bring them into use. They say, for instance, that water bears no price in the market. It is true that a cupful does not, but a lake does ;; just as a handful of dust does not, but an acre does. And were it possible to make even the possession of the cupful or handful permanent, (i.e. to find a place for them), the earth and sca would be bought up by handfuls and cupfuls.