AMr. Ricardo, speaking of the commodities produced by the capitalist, says, “their whole value is divided into two portions only: one constitutes the profits of stock; the other the wages of labour.” (p. 107. 3d edit.) The language of Mr. Mill, in his Elements of Political Economy, is similar.

BThis is very properly stated by Colonel Torrens, in his Production of Wealth, c. 1. p. 28.

CThe effects of slow or quick returns, and of the different proportions of fixed and circulating capitals, are distinctly allowed by Mr. Ricardo; but in his last edition, (the third, p. 32.) he has much underrated their amount. They are both theoretically and practically so considerable as entirely to destroy the position that commodities exchange with each other according to the quantity of labour which has been employed upon them; but no one that I am aware of has ever stated that the different quantity of labour employed on commodities is not a much more powerful source of difference of value.

DColonel Torrens, by representing capital under the form of certain quantities of cloth and corn, instead of value in labour, has precluded himself from the possibility of giving a just view either of value, profits, or effectual demand. An increase of cloth and corn from the same quantity of labour is of no avail whatever in increasing value, profits, or effectual demand, if this increased produce will not command so much labour as before, an event which is continually occurring, from deficiency of demand.

EAgricultural labour is taken for the obvious reasons that it is the commonest species of labour, that it directly produces the food of the labourer, and that it is the most immediately connected with the gradations of soil, and the necessary variations of profits. It is also assumed with Adam Smith, Mr. Ricardo, and other political economists, that, on an average, other kinds of labour continue to bear the same proportions to agricultural labour.

FIn my last work, I thought that a mean between corn and labour might be a better measure of value than labour alone; but I am now convinced that I was wrong, and that labour alone is the true measure.

GWhenever it is said that the value of labour rises in the progress of cultivation, a comparison is made between the value of a given quantity of labour at two different periods; and when it is added that wages rise in proportion to the quantity of labour required to produce them, objects are measured solely by the quantity of labour employed upon them, although the rate of profits may be totally different.

HThis proposition is essentially the same as that which is very clearly and ably expressed by Mr. Ricardo in his chapter on Profits, (p. 128. 3d ed.) in the following terms: “in all countries and at all times profits depend on the quantity of labour requisite to provide necessaries for the labourers on that land, or with that capital which yields no rent;” a proposition which though incomplete in reference to the ultimate causes of the variations of profits, contains a most important truth. From this truth the legitimate deduction appears to me to be, the constant value of labour; but Mr. Ricardo has formed his system on a deduction exactly opposite to it. He has, however, in my opinion, amply compensated for the errors into which he may have fallen, by furnishing us, at the same time, not only with the means of their refutation, but the means of improving the science of Political Economy.

IMr. Ricardo, by supposing gold to be produced always by a certain quantity of labour and capital, is compelled to acknowledge that his standard “would be a perfect measure of value for all things produced under the same circumstances precisely as itself, but for no others.” p. 43. This concession appears to me quite fatal. We want to measure the value of commodities under all circumstances, and it is only gold obtained exclusively by labour, or labour itself, which can do this. See Principles of Political Economy considered with a View to their Practical Application, pp. 111 and 118.

JIt is this rise in the money price of labour, occasioned by the fall of profits, which Mr. Ricardo considers as that necessary rise in the value of labour on which he makes so much depend in his system; but if the foregoing reasoning be well founded, it follows that this rise is not a rise in the value of labour, but a fall in the value of money.

KThis applies to the seed, and the food of the working cattle in agriculture.

LThe labour worked up in a commodity could not, in many cases, be ascertained without considerable difficulty; but the labour which it will command is always open and palpable.

MPractically, in all countries such as South America and Ireland, where there is a slack demand for labour, and the people are but half employed, the food wages of labour are high, compared with the work done.

NIf profits rise in some departments without falling proportionally in others, the average rate of profits will have increased, although, from the difficulty of moving capital, the rate of profits in some employments may not have had time to rise before the stimulus to such rise comes to an end by a fresh increase of capital.

OThis is the view taken of it by Colonel Torrens in his Production of Wealth, which I think the just one; because it makes the proper distinction between cost and value, on which the great stimulus to production depends. But he has most unnecessarily and incorrectly given the same interpretation to natural price, which always includes profits.

PIn order to exclude demand and supply from the costs of production, when ordinary profits are considered as making a part of them, it would be necessary to assume that the corn wages of labour are always the same, an assumption which would be quite unwarranted, not only in reference to short periods, but to periods of fifty or sixty years, as the history of corn wages in this country alone amply testifies (see ch. iv. sect. 4, of my Princ. of Pol. Econ. &c.); and what but the state of the demand and supply of corn, compared with labour, prevents profits in the United States from being 100 per cent.? The quantity of corn divided between the labourer and capitalist would be amply sufficient to yield such profits, if the corn wages of labour were no higher than in England.

QSect. IV. p. 91, et seq.

ROne of the most valuable sections in Mr. Tooke’s late work On High and Low Prices, is the seventh, in which he proves the frequent occurrence of this event, and explains, with great clearness and knowledge of the subject, the mode in which it takes place.

SInquiry into the Rise of Prices in Europe, p. 15.

TPerhaps at the time specifically adverted to, this supposition will not be allowed. But it is always assumed as a general proposition; and although 1810 and 11 were years of great manufacturing distress, yet Mr. Tooke himself brings evidence which shows that manufacturing labour was particularly high in 1805 and 6.

UIn poor countries a succession of bad seasons sometimes takes place without any rise in the price of labour, and in that case, though there may be a high price of corn, there is no fall in the natural value of money. It will not be purchased with less labour.

VThese averages are taken from Lord Lauderdale’s Further Considerations on the State of the Currency, published in 1813. Appendix, p. 33.

WFor the foregoing valuable table, and the information accompanying it, I am indebted to Mr. Mure, of Kircudbright, through the kind intervention of Mr. M’Culloch, of Edinburgh.