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.

Phd. 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, Phdrus, 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.

Phd. Most willingly; it is a heavenly fancy.

X. Next look into the first column, and tell me what you see there.

Phd. 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.

Phd. 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.

Phd. 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.

Phd. 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.

Phd. Not variable! But there is no such thing.

X. No! Mr. Malthus, however, says there is; labor, he asserts, is of unalterable value.

Phd. 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.

Phd. 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.

Phd. 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.

Phd. But of course you deny that the valuation is correct?

X. I do, Phdrus; 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, Phdrus, 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.

Phd. 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.

Phd. 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.

Phd. 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?

Phd. 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.

Phd. 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.

Phd. 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.

Phd. 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.

Phd. (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.

Phd. (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.

THE END