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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.