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Here, then, is the great law of value as first explained by Mr. Ricardo. Adam Smith uniformly takes it for granted that an alteration in the quantity of labor, and an alteration in wages (that is, the value of labor), are the same thing, and will produce the same effects; and, hence, he never distinguishes the two cases, but everywhere uses the two expressions as synonymous. If A, which had hitherto required sixteen shillings’ worth of labor for its production, should to-morrow require only twelve shillings’ worth, Adam Smith would have treated it as a matter of no importance whether this change had arisen from some discovery in the art of manufacturing A, which reduced the quantity of labor required from four days to three, or simply from some fall in wages which reduced the value of a day’s labor from four shillings to three shillings. Yet, in the former case, A would fall considerably in price as soon as the discovery ceased to be monopolized; whereas, in the latter case, we have seen that A could not possibly vary in price by one farthing.

Phed
. In what way do you suppose that Adam Smith came to make so great an oversight, as I now confess it to be?

X
. Mr. Malthus represents Adam Smith as not having sufficiently explained himself on the subject. “He does not make it quite clear,” says Mr. Malthus, “whether he adopts for his principle of value the quantity of the producing labor or its value.” But this is a most erroneous representation. There is not a chapter in the “Wealth of Nations” in which it is not made redundantly clear that Adam Smith adopts both laws as mere varieties of expression for one and the same law. This being so, how could he possibly make an election between two things which he constantly confounded and regarded as identical? The truth is, Adam Smith’s attention was never directed to the question: he suspected no distinction; no man of his day, or before his day, had ever suspected it; none of the French or Italian writers on Political Economy had ever suspected it; indeed, none of them have suspected it to this hour. One single writer before Mr. Ricardo has insisted on the quantity of labor as the true ground of value; and, what is very singular, at a period when Political Economy was in the rudest state, namely, in the early part of Charles II’s reign. This writer was Sir William Petty, a man who would have greatly advanced the science if he had been properly seconded by his age. In a remarkable passage, too long for quotation, he has expressed the law of value with a Ricardian accuracy: but it is scarcely possible that even he was aware of his own accuracy; for, though he has asserted that the reason why any two articles exchange for each other (as so much corn of Europe, suppose, for so much silver of Peru) is because the same quantity of labor has been employed on their production; and, though he has certainly not vitiated the purity of this principle by the usual heteronomy (if you will allow me a learned word),–that is, by the introduction of the other and opposite law derived from the value of this labor,– yet, it is probable that in thus abstaining he was guided by mere accident, and not by any conscious purpose of contradistinguishing the one law from the other; because, had that been his purpose, he would hardly have contented himself with forbearing to affirm, but would formally have denied the false law. For it can never be sufficiently impressed upon the student’s mind, that it brings him not one step nearer to the truth to say that the value of A is determined by the quantity of labor which produces it, unless by that proposition he means that it is not determined by the value of the labor which produces it.