PAGE 27
The Templars’ Dialogues
by
Phed
. On what ground or pretence.
X
. Under a strange misconception of Mr. Ricardo’s meaning. Mr. Malthus has written a great deal, as you may have heard, against Mr. Ricardo’s principle of value; his purpose is to prove that it is a false principle; independently of which, he contends that, even if it were a true principle, it would be of little use.
[Footnote:
Phed
. Little use? In relation to what?
X
. Ay, there lies the inexplicable mistake: of little use as a measure of value. Now, this is a mistake for which there can be no sort of apology; for it supposes Mr. Ricardo to have brought forward his principle of value as a standard or measure of value; whereas, Mr. Ricardo has repeatedly informed his reader that he utterly rejects the possibility of any such measure. Thus (at p. 10, edit. 2d), after laying down the conditio sine qua non under which any commodity could preserve an unvarying value, he goes on to say: “of such a commodity we have no knowledge, and consequently are unable to fix on any standard of value.” And, again (at p. 343 of the same edition), after exposing at some length the circumstances which disqualify “any commodity, or all commodities together,” from performing the office of a standard of value, he again states the indispensable condition which must be realized in that commodity which should pretend to such an office; and again he adds, immediately, “of such a commodity we have no knowledge.” But what leaves this mistake still more without excuse is, that in the third edition of his book Mr. Ricardo has added an express section (the sixth) to his chapter on value, having for its direct object to expose the impossibility of any true measure of value. Setting aside, indeed, these explicit declarations, a few words will suffice to show that Mr. Ricardo could not have consistently believed in any standard or measure of value. What does a standard mean?
Phed
. A standard is that which stands still whilst other things move, and by this means serves to indicate or measure the degree in which those other things have advanced or receded.
X
. Doubtless; and a standard of value must itself stand still or be stationary in value. But nothing could possibly be stationary in value upon Mr. Ricardo’s theory, unless it were always produced by the same quantity of labor; since any alteration in the quantity of the producing labor must immediately affect the value of the product. Now, what is there which can always be obtained by the same quantity of labor? Raw materials (for reasons which will appear when we consider Rent) are constantly tending to grow dearer
[Footnote: “Constantly tending to grow dearer”–To the novice in Political Economy, it will infallibly suggest itself that the direct contrary is the truth; since, even in rural industry, though more tardily improving its processes than manufacturing industry, the tendency is always in that direction: agriculture, as an art benefiting by experience, has never yet been absolutely regressive, though not progressive by such striking leaps or sudden discoveries as manufacturing art. But, for all that, it still remains true, as a general principle, that raw materials won from the soil are constantly tending to grow dearer, whilst these same materials as worked up for use by manufacturing skill are constantly travelling upon an opposite path. The reason is, that, in the case of manufacturing improvements, no conquest made is ever lost. The course is never retrogressive towards the worse machinery, or towards the more circuitous process; once resigned, the inferior method is resigned forever. But in the industry applied to the soil this is otherwise. Doubtless the farmer does not, with his eyes open, return to methods which have experimentally been shown to be inferior, unless, indeed, where want of capital may have forced him to do so; but, as population expands, he is continually forced into descending upon inferior soils; and the product of these inferior soils it is which gives the ruling price for the whole aggregate of products. Say that soils Nos. 1, 2, 3, 4, had been hitherto sufficient for a nation, where the figures express the regular graduation downwards in point of fertility; then, when No. 5 is called for (which, producing less by the supposition, costs, therefore, more upon any given quantity), the price upon this last, No. 5, regulates the price upon all the five soils. And thus it happens that, whilst always progressive, rural industry is nevertheless always travelling towards an increased cost. The product of Nos. 1, 2, 3, 4, is continually tending to be cheaper; but when the cost of No. 5 (and so on forever as to the fresh soils required to meet a growing population) is combined with that of the superior soils, the quotient from the entire dividend, 1, 2, 3, 4, 5, is always tending gradually to a higher expression. ]