Chapter XXVI (3)

DIALOGUE THE SECOND.

REDUCTIO AD ABSURDUM.

_Phil_. X., I see, is not yet come: I hope he does not mean to break his appointment, for I have a design upon him. I have been considering his argument against the possibility of any change in price arising out of a change in the value of labor, and I have detected a flaw in it which he can never get over. I have him, sir--I have him as fast as ever spider had a fly.

_Phæd_. Don't think it, my dear friend: you are a dexterous _retiarius_; but a gladiator who is armed with Ricardian weapons will cut your net to pieces. He is too strong in his cause, as I am well satisfied from what passed yesterday. He'll slaughter you,--to use the racy expression of a friend of mine in describing the redundant power with which one fancy boxer disposed of another,--he'll slaughter you "with ease and affluence." But here he comes.--Well, X., you're just come in time. Philebus says that you are a fly, whilst _he_ is a murderous spider, and that he'll slaughter you with "ease and affluence;" and, all things considered, I am inclined to think he will.

_Phil_. Phædrus does not report the matter quite accurately; however, it is true that I believe myself to have detected a fatal error in your argument of yesterday on the case of the hat; and it is this: When the value of labor rose by twenty-five per cent., you contended that this rise would be paid out of profits. Now, up to a certain limit this may be possible; beyond that it is impossible. For the price of the hat was supposed to be eighteen shillings: and the price of the labor being assumed originally at twelve shillings;-- leaving six shillings for profits,--it is very possible that a rise in wages of no more than three shillings may be paid out of these profits. But, as this advance in wages increases, it comes nearer and nearer to that point at which it will be impossible for profits to pay it; since, let the advance once reach the whole six shillings, and all motive for producing hats will be extinguished; and let it advance to seven shillings, there will in that case be no fund at all left out of which the seventh shilling can be paid, even if the capitalist were disposed to relinquish all his profits. Now, seriously, you will hardly maintain that the hat could not rise to the price of nineteen shillings--or of any higher sum?

_X_. Recollect, Philebus, what it is that I maintain; assuredly the hat may rise to the price of nineteen shillings, or of any higher sum, but not as a consequence of the cause you assign. Taking your case, I _do_ maintain that it is impossible the hat should exceed, or even reach, eighteen shillings. When I say eighteen shillings, however, you must recollect that the particular sum of twelve shillings for labor, and six shillings for profits, were taken only for the sake of illustration; translating the sense of the proposition into universal forms, what I assert is, that the rise in the value of the labor can go no further than the amount of profits will allow it: profits swallowed up, there will remain no fund out of which an increase of wages can be paid, and the production of hats will cease.

_Phil_. This is the sense in which I understood you; and in this sense I wish that you would convince me that the hat could not, under the circumstances supposed, advance to nineteen shillings or twenty shillings.

_X_. Perhaps, in our conversation on _Wages_, you will see this more irresistibly; you yourself will then shrink from affirming the possibility of such an advance as from an obvious absurdity; meantime, here is a short demonstration of it, which I am surprised that Mr. Ricardo did not use as the strongest and most compendious mode of establishing his doctrine.

Let it be possible that the hat may advance to nineteen shillings; or, to express this more generally, from _x_ (or eighteen shillings)-- which it was worth before the rise in wages--to _x_ + _y_; that is to say, the hat will now be worth _x_ + _y_ quantity of money--having previously been worth no more than _x_. That is your meaning?

_Phil_. It is.

_X_. And if in money, of necessity in everything else; because otherwise, if the hat were worth more money only, but more of nothing besides, that would simply argue that money had fallen in value; in which case undoubtedly the hat might rise in any proportion that money fell; but, then, without gaining any increased value, which is essential to your argument.

_Phil_. Certainly; if in money, then in everything else.

_X_. Therefore, for instance, in gloves; having previously been worth four pair of buckskin gloves, the hat will now be worth four pair + _y_?

_Phil_. It will.

_X_. But, Philebus, either the rise in wages is universal or it is not universal. If not universal, it must be a case of accidental rise from mere scarcity of hands; which is the case of a rise in _market_ value; and that is not the case of Mr. Ricardo, who is laying down the laws of _natural_ value. It is, therefore, universal; but, if universal, the gloves from the same cause will have risen from the value of _x_ to _x_ + _y_.

Hence, therefore, the price of the hat, estimated in gloves, is = _x_ + _y_.

And again, the price of the gloves, estimated in hats, is = _x_ + _y_.

In other words, H - _y_ = _x_. H + _y_ = _x_. That is to say, H - _y_ = H + _y_.

_Phæd_. Which, I suppose, is an absurdity; and, in fact, it turns out, Philebus, that he has slaughtered you with "ease and affluence."

_X_. And this absurdity must be eluded by him who undertakes to show that a rise in the wages of labor can be transferred to the value of its product.

* * * * *

DIALOGUE THE THIRD.

[Et æquiori sane animo feres, cum hic de primis agatur principiis, si superstitiose omnia examinavi,--viamque quasi palpando singulaque curiosius contrectando, lente me promovi et testudineo gradu. Video enim ingenium humanum ita comparatum esse--ut facilius longe quid _consequens_ sit dispiciat, quam quid in naturà _primo_ verum; nostramque omnium conditionem non multum ab illà Archimedis abludere--_Aos æe so kai koiso tæn gæn_. Ubi primum figamus pedem, inveniro multo magis satagimus, quam (ubi inveninius) ulterius progredi.--_Henricus Morus in Epist. ad Cartesium._]

PRINCIPLE OF VALUE CONTINUED.

_Phæd_. In our short conversation of yesterday, X., you parried an objection brought forward by Philebus in a way which I thought satisfactory. You reduced him to an absurdity, or what seemed such. In fact, I did verily believe that you had slaughtered Philebus; and so I told him. But we have since reconsidered the matter, and have settled it between ourselves that your answer will not do; that your "absurdity," in fact, is a very absurd absurdity. Philebus will tell you why. I, for my part, shall have enough to do to take care of a little argument of my own, which is designed to meet something that passed in our first dialogue. Now, my private conviction is, that both I and Philebus shall be cudgelled; I am satisfied that such will be the issue of the business. And my reason for thinking so is this,--that I already see enough to discern a character of boldness and determination in Mr. Ricardo's doctrines which needs no help from sneaking equivocations, and this with me is a high presumption that he is in the right. In whatever rough way his theories are tossed about, they seem always, like a cat, to light upon their legs. But, notwithstanding this, as long as there is a possibility that he may be in the wrong, I shall take it for granted that he is, and do my best to prove him so.

_X_. For which, Phædrus, I shall feel greatly indebted to you. We are told of Trajan, that, in the camp exercises, he not only tolerated hard blows, but courted them; "alacer virtute militum, et lætus quoties aut cassidi suæ aut clypeo gravior ictus incideret. Laudabat quippe ferientes, hortabaturque ut auderent." When one of our theatres let down an iron curtain upon the stage as a means of insulating the audience from any fire amongst the scenery, and sent men to prove the strength of this curtain by playing upon it with sledge-hammers in the sight and hearing of the public, who would not have laughed at the hollowness of the mummery, if the blows had been gentle, considerate, and forbearing? A "make-believe" blow would have implied a "make- believe" hammer and a "make-believe" curtain. No!--hammer away, like Charles Martel; "fillip me with a three-man beetle;" be to me a _malleus hæreticorum_; come like Spenser's Talus--an iron man with an iron flail, and thresh out the straw of my logic; rack me; put me to the question; get me down; jump upon me; kick me; throttle me; put an end to me in any way you can.

_Phæd_. I will, I will, my dear friend; anything to oblige you; anything for peace. So now tie yourself to the stake, whilst we bait you. And you begin, Philebus; unmuzzle.

_Phil_. I shall be brief. The case of the hat is what I stand upon; and, by the way, I am much obliged to you, X., for having stated the question in that shape; it has furnished me with a very manageable formula for recalling the principle at issue. The wages alter from two different causes--in one case, because there is the same quantity of labor at a different rate; in another case, because there is a different quantity at the same rate. In the latter case, it is agreed that the alteration settles upon price; in the former case you affirm that it will _not_: I affirm that it will. I bring an argument to prove it; which argument you attempt to parry by another. But in this counter argument of yours it strikes me that there lurks a _petitio principii_. Indeed, I am sure of it. For observe the course of our reasoning. I charge it upon your doctrine as an absurd consequence-- that, if the increase of wages must be paid out of profits, then this fund will at length be eaten out; and as soon as it is, there will be no fund at all for paying any further increase; and the production must cease. Now, what in effect is your answer? Why, that as soon as profits are all eaten up, the production _will_ cease. And this you call reducing me to an absurdity. But where is the absurdity? Your answer is, in fact, an identical proposition; for, when you say, "_As soon as_ profits are absorbed," I retort, Ay, no doubt "_as soon_" as they are; but when will that be? It requires no Ricardo to tell us that, _when_ profits are absorbed, they will be absorbed; what I deny is, that they ever _can_ be absorbed. For, as fast as wages increase, what is to hinder price from increasing _pari passu_? In which case profits will _never_ be absorbed. It is easy enough to prove that price will not increase, if you may assume that profits will not remain stationary. For then you have assumed the whole point in dispute; and after _that_, of course you have the game in your own hands; since it is self-evident that if anybody is made up of two parts P and W, so adjusted that all which is gained by either must be lost by the other, then _that_ body can never increase.

_Phæd_. Nor decrease.

_Phil_. No, nor decrease. If my head must of necessity lose as much weight as my trunk gains, and _vice versa_, then it is a clear case that I shall never be heavier. But why cannot my head remain stationary, whilst my trunk grows heavier? This is what you had to prove, and you have not proved it.

_Phæd_. O! it's scandalous to think how he has duped us; his "_reductio_" turns out to the merest swindling.

_X_. No, Phædrus, I beg your pardon. It is very true I did not attempt to prove that your head might not remain stationary; I could not have proved this _directly_, without anticipating a doctrine out of its place; but I proved it _indirectly_, by showing that, if it were supposed possible, an absurdity would follow from that supposition. I said, and I say again, that the doctrine of wages will show the very supposition itself to be absurd; but, until we come to that doctrine, I content myself with proving that, let that supposition seem otherwise ever so reasonable (the supposition, namely, that profits may be stationary whilst wages are advancing), yet it draws after it one absurd consequence, namely, that a thing may be bigger than that to which it is confessedly equal. Look back to the notes of our conversation, and you will see that this is as I say. You say, Philebus, that I prove profits in a particular case to be incapable of remaining stationary, by assuming that price cannot increase; or, if I am called upon to prove that assumption--namely, that price cannot increase--I do it only by assuming that profits in that case are incapable of remaining stationary. But, if I had reasoned thus, I should not only have been guilty of a _petitio principii_ (as you alleged), but also of a circle. Here, then, I utterly disclaim and renounce either assumption: I do not ask you to grant me that price must continue stationary in the case supposed; I do not ask you to grant me that profits must recede in the case supposed. On the contrary, I will not have them granted to me; I insist on your refusing both of these principles.

_Phil_. Well, I _do_ refuse them.

_Phæd_. So do I. I'll do anything in reason as well as another. "If one knight give a testril--" [Footnote: Sir Andrew Aguecheek, in "Twelfth Night."]

_X_. Then let us suppose the mines from which we obtain our silver to be in England.

_Phæd_. What for? Why am I to suppose this? I don't know but you have some trap in it.

_X_. No; a Newcastle coal-mine, or a Cornwall tin-mine, will answer the purpose of my argument just as well. But it is more convenient to use silver as the illustration; and I suppose it to be in England simply to avoid intermixing any question about foreign trade. Now, when the hat sold for eighteen shillings, on Mr. Ricardo's principle why did it sell for that sum?

_Phil_. I suppose, because the quantity of silver in that sum is assumed to be the product of four days' labor in a silver-mine.

_X_. Certainly; because it is the product of the same quantity of labor as that which produced the hat. Calling twenty shillings, therefore, four ounces of silver, the hat was worth nine tenths of four ounces. Now, when wages advance from twelve shillings to fourteen shillings, profits (you allege) will not pay this advance, but price. On this supposition the price of the hat will now be--what?

_Phil_. Twenty shillings; leaving, as before, six shillings for profit.

_X_. Six shillings upon fourteen shillings are not the same _rate_ of profit as six shillings upon twelve shillings; but no matter; it does not affect the argument. The hat is now worth four entire ounces of silver, having previously been worth four ounces _minus_ a tenth of four ounces. But the product of four days' labor in a silver-mine must also advance in value, for the same cause. Four ounces of silver, which is that product, will now have the same power or value as 22.22_s_. had before. Consequently the four ounces of silver, which had previously commanded in exchange a hat and the ninth of a hat, will now command a hat and two ninths, fractions neglected. Hence, therefore, a hat will, upon any Anti-Ricardian theory, manifestly buy four ounces of silver; and yet, at the same time, it will not buy four ounces by one fifth part of four ounces. Silver and the denominations of its qualities, being familiar, make it more convenient to use that metal; but substitute lead, iron, coal, or anything whatsoever--the argument is the same, being in fact a universal demonstration that variations in wages cannot produce corresponding variations in price.

_Phæd_. Say no more, X.; I see that you are right; and it's all over with our cause; unless I retrieve it. To think that the whole cause of the Anti-Ricardian economy should devolve upon me! that fate should ordain me to be the Atlas on whose unworthy shoulders the whole system is to rest! This being my destiny, I ought to have been built a little stronger. However, no matter. I heartily pray that I may prove too strong for you; though, at the same time, I am convinced I shall not. Remember, therefore, that you have no right to exult if you toss and gore me, for I tell you beforehand that you will. And, if you do, that only proves me to be in the right, and a very sagacious person; since my argument has all the appearance of being irresistible, and yet such is my discernment that I foresee most acutely that it will turn out a most absurd one. It is this: your answer to Philebus issues in this--that a thing A is shown to be at once more valuable and yet not more valuable than the same thing B. Now, this answer I take by the horns; it is possible for A to be more and yet not more valuable than the same thing. For example, my hat shall be more valuable than the gloves; more valuable, that is, than the gloves were: and yet not more valuable than the gloves; not more valuable, that is, than the gloves now are. So of the wages; all things preserve their former relations, because all are equally raised. This is my little argument. What do you think of it? Will it do?

_X_. No.

_Phæd_. Why, so I told you.

_X_. I have the pleasure, then, to assure you that you were perfectly right. It will _not_ do. But I understand you perfectly. You mean to evade my argument that the increase of wages shall settle upon profits; according to this argument, it will settle upon price, and not upon profits; yet again on price in such a way as to escape the absurdity of two relations of value existing between the very same things. But, Phædrus, this rise will be a mere metaphysical one, and no real rise. The hat, you say, has risen; but still it commands no more of the gloves, because they also have risen. How, then, has either risen? The rise is purely ideal.

_Phæd_. It is so, X.; but that I did not overlook; for tell me--on Mr. Ricardo's principle, will not all things double their value simultaneously, if the quantity of labor spent in producing all should double simultaneously?

_X_. It will, Phædrus.

_Phæd_. And yet nothing will exchange for more or less than before.

_X_. True; but the rise is not ideal, for all that, but will affect everybody. A pound of wheat, which previously bought three pounds of salt, will still buy three pounds; but, then, the salt-maker and the wheat-maker will have only one pound of those articles where before he had two. However, the difference between the two cases cannot fully be understood, without a previous examination of certain distinctions, which I will make the subject of our next dialogue; and the rather, because, apart from our present question, at every step we should else be embarrassed, as all others have been, by the perplexity attending these distinctions. Meantime, as an answer to your argument, the following consideration will be quite sufficient. The case which your argument respects is that in which wages are supposed to rise? Why? In consequence of a _real_ rise in corn or something else. As a means of meeting this rise, wages rise; but the increased value of wages is only a means to an end, and the laborer cares about the rise only in that light. The end is--to give him the same quantity of corn, suppose. That end attained, he cares nothing about the means by which it is attained. Now, your ideal rise of wages does not attain this end. The corn has _really_ risen; this is the first step. In consequence of this, an ideal rise follows in all things, which evades the absurdities of a real rise--and evades the Ricardian doctrine of profits; but, then, only by also evading any real rise in wages, the necessity of which (in order to meet the real rise in corn) first led to the whole movement of price. But this you will more clearly see after our next dialogue.

* * * * *

DIALOGUE THE FOURTH.

ON THE USE AND ABUSE OF TWO CELEBRATED DISTINCTIONS IN THE THEORY OF VALUE.

_X_. Now, gentlemen, I come to a question which on a double account is interesting: first, because it is indispensable to the fluency of our future progress that this question should be once for all decided; secondly, because it furnishes an _experimentum crucis_ for distinguishing a true knowledge of Mr. Ricardo's theory from a spurious or half-knowledge. Many a man will accompany Mr. Ricardo thus far, and will keep his seat pretty well until he comes to the point which we have now reached--at which point scarcely one in a thousand will escape being unhorsed.

_Phæd_. Which one most assuredly will not be myself. For I have a natural alacrity in losing my seat, and gravitate so determinately to the ground, that (like a Roman of old) I ride without stirrups, by way of holding myself in constant readiness for projection; upon the least hint, anticipating my horse's wishes on that point, and throwing myself off as fast as possible; for what's the use of taking the negative side in a dispute where one's horse takes the affirmative? So I leave it to Philebus to ride through the steeple-chase you will lead him; his be the honor of the day--and his the labor.

_X_. But _that_ cannot be; Philebus is bound in duty to be dismounted, for the sake of keeping Mr. Malthus with many others in countenance. For at this point, Phædrus, more than at any other almost, there is a sad confusion of lords and gentlemen that I could name thrown out of the saddle pell-mell upon their mother earth.

_Phil_.
"So they among themselves in pleasant vein
Stood scoffing."

I suppose I may add--

"Heightened in their thoughts beyond
All doubts of victory."

Meantime, what is it you allude to?

_X_. You are acquainted, I doubt not, Philebus, with the common distinction between _real_ and _nominal_ value; and in your judgment upon that distinction I presume that you adopt the doctrine of Mr. Malthus.

_Phil_. I do; but I know not why you should call it the doctrine of Mr. Malthus; for, though he has reurged it against Mr. Ricardo, yet originally it belongs to Adam Smith.

_X_. Not so, Philebus; _a_ distinction between real and nominal value was made by Adam Smith, but not altogether _the_ distinction of Mr. Malthus. It is true that Mr. Malthus tells us ("Polit. Econ.," p. 63) that the distinction is "exactly the same." But in this he is inaccurate; for neither is it exactly the same; nor, if it had been, could Mr. Malthus have urged it in his "Political Economy" with the same consistency as its original author. This you will see hereafter. But no matter; how do you understand the distinction?

_Phil_. "I continue to think," with Mr. Malthus, and in his words, "that the most proper definition of real value in exchange, in contradistinction to nominal value in exchange, is the power of commanding the necessaries and conveniences of life, including labor, as distinguished from the power of commanding the precious metals."

_X_. You think, for instance, that if the wages of a laborer should in England be at the rate of five shillings a day, and in France of no more than one shilling a day, it could not, therefore, be inferred that wages were at a high real value in England, or a low real value in France. Until we know how much food, &c., could be had for the five shillings in England, and how much in France for the one shilling, all that we could fairly assert would be, that wages were at a high _nominal_ value in England and at a low _nominal_ value in France; but the moment it should be ascertained that the English wages would procure twice as much comfort as the French, or the French twice as much as the English, we might then peremptorily affirm that wages were at a high _real_ value in England on the first supposition, or in France on the second:--this is what you think?

_Phil_. It is, and very fairly stated, I think this, in common with Mr. Malthus; and can hold out but little hope that I shall ever cease to think it.

_X_.
"Why, then, know this,
Thou think'st amiss;
And, to think right, thou must think o'er again."
[Footnote: Suckling's well-known song.]

_Phæd_. But is it possible that Mr. Ricardo can require me to abjure an inference so reasonable as this? If so, I must frankly acknowledge that I am out of the saddle already.

_X_. Reasonable inference? So far from _that_, there is an end of all logic if such an inference be tolerated. _That_ man may rest assured that his vocation in this world is not logical, who feels disposed (after a few minutes' consideration) to question the following proposition,--namely: That it is very possible for A continually to increase in value--in _real_ value, observe--and yet to command a continually decreasing quantity of B; in short, that A may acquire a thousand times higher value, and yet exchange for ten thousand times less of B.

_Phæd_. Why, then, "chaos is come again!" Is this the unparadoxical Ricardo?

_X_. Yes, Phædrus; but lay not this unction to your old prejudices, which you must now prepare to part with forever, that it is any spirit of wilful paradox which is now speaking; for get rid of Mr. Ricardo, if you can, but you will not, therefore, get rid of this paradox. On any other theory of value whatsoever, it will still continue to be an irresistible truth, though it is the Ricardian theory only which can consistently explain it. Here, by the way, is a specimen of paradox in the true and laudable sense--in that sense according to which Boyle entitled a book "Hydrostatical Paradoxes;" for, though it wears a _primâ facie_ appearance of falsehood, yet in the end you will be sensible that it is not only true, but true in that way and degree which will oblige him who denies it to maintain an absurdity. Again, therefore, I affirm that, when the laborer obtains a large quantity of corn, for instance, it is so far from being any fair inference that wages are then at a high real value, that in all probability they are at a very low real value; and inversely I affirm, that when wages are at their very highest real value, the laborer will obtain the very smallest quantity of corn. Or, quitting wages altogether (because such an illustration would drive me into too much anticipation), I affirm universally of Y (that is, of any assignable thing whatsoever), that it shall grow more valuable _ad infinitum_, and yet by possibility exchange for less and less _ad infinitum_ of Z (that is, of any other assignable thing).

_Phæd_. Well, all I shall say is this,--am I in a world where men stand on their heads or on their feet? But there is some trick in all this; there is some snare. And now I consider--what's the meaning of your saying "by possibility"? If the doctrine you would force upon me be a plain, broad, straightforward truth, why fetter it with such a suspicious restriction?

_X_. Think, for a moment, Phædrus, what doctrine it is which I would force upon you; not, as you seem to suppose, that the quantity obtained by Y is in the _inverse_ ratio of the value of Y; on the contrary, if that were so, it would still remain true that an irresistible inference might be drawn from the quantity purchased to the value of the thing purchasing, and _vice versa_, from the value of the thing purchasing to the quantity which it would purchase. There would still be a connection between the two; and the sole difference between my doctrine and the old doctrine would be this--that the connection would be no longer _direct_ (as by your doctrine), but _inverse_. This would be the difference, and the sole difference. But what is it that I assert? Why, that there is no connection at all, or of any kind, direct or inverse, between the quantity commanded and the value commanding. My object is to get rid of your inference, not to substitute any new inference of my own. I put, therefore, an extreme case. This case ought by your doctrine to be impossible. If, therefore, it be _not_ impossible, your doctrine is upset. Simply as a possible case, it is sufficient to destroy _you_. But, if it were more than a possible case, it would destroy _me_. For if, instead of demonstrating the possibility of such a case, I had attempted to show that it were a universal and necessary case, I should again be introducing the notion of a connection between the quantity obtained and the value obtaining, which it is the very purpose of my whole argument to exterminate. For my thesis is, that no such connection subsists between the two as warrants any inference that the real value is great because the quantity it buys is great, or small because the quantity it buys is small; or, reciprocally, that, because the real value is great or small, therefore the quantities bought shall be great or small. From, or to, the real value in these cases, I contend that there is no more valid inference, than from, or to, the nominal value with which it is contrasted.

_Phil_. Your thesis, then, as I understand it, is this: that if A double its value, it will not command double the quantity of B. I have a barouche which is worth about six hundred guineas at this moment. Now, if I should keep this barouche unused in my coach-house for five years, and at the end of this term it should happen from any cause that carriages had doubled in value, _my_ understanding would lead me to expect double the quantity of any commodity for which I might then exchange it, whether _that_ were money, sugar, besoms, or anything whatsoever. But _you_ tell me--no. And _vice versa_, if I found that my barouche at the end of five years obtained for me double the quantity of sugar, or besoms, or political economists, which it would now obtain, I should think myself warranted in drawing an inference that carriages had doubled their value. But you tell me--no; "non valet consequentia."

_X_. You are in the right, Phædrus; I _do_ tell you so. But you do not express my thesis quite accurately, which is, that if A double its value, it will not _therefore_ command double the former quantity of B. It may do so; and it may also command five hundred times more, or five hundred times less.

_Phæd_. O tempora! O mores! Here is my friend X., that in any other times would have been a man of incorruptible virtue; and yet, in our unprincipled age, he is content to barter the interests of truth and the "majesty of plain-dealing" for a brilliant paradox, or (shall I say?) for the glory of being reputed an accomplished disputant.

_X_. But, Phædrus, there could be little brilliancy in a paradox which in the way you understand it will be nothing better than a bold defiance of common sense. In fact, I should be ashamed to give the air of a paradox to so evident a truth as that which I am now urging, if I did not continually remind myself that, evident as it may appear, it yet escaped Adam Smith. This consideration, and the spectacle of so many writers since his day thrown out and at a fault precisely at this point of the chase, make it prudent to present it in as startling a shape as possible; in order that, the attention being thoroughly roused, the final assent may not be languid or easily forgotten. Suffer me, therefore, Phædrus, in a Socratic way, to extort an assent from your own arguments--allow me to drive you into an absurdity.

_Phæd_. With all my heart; if our father Adam is wrong, I am sure it would be presumptuous in me to be right; so drive me as fast as possible.

_X_. You say that A, by doubling its own value, shall command a double quantity of B. Where, by A, you do not mean some one thing in particular, but generally any assignable thing whatever. Now, B is some assignable thing. Whatever, therefore, is true of A, will be true of B?

_Phæd_. It will.

_X_. It will be true, therefore, of B, that, by doubling its own value, it will command a double quantity of A?

_Phæd_. I cannot deny it.

_X_. Let A be your carriage; and let B stand for six hundred thousands of besoms, which suppose to express the value of your carriage in that article at this present moment. Five years hence, no matter why, carriages have doubled in value; on which supposition you affirm that in exchange for your barouche you will be entitled to receive no less than twelve hundred thousands of besoms.

_Phæd_. I do; and a precious bargain I shall have of it; like Moses with his gross of shagreen spectacles. But sweep on, if you please; brush me into absurdity.

_X_. I will. Because barouches have altered in value, that is no reason why besoms should _not_ have altered?

_Phæd_. Certainly; no reason in the world.

_X_. Let them have altered; for instance, at the end of the five years, let them have been doubled in value. Now, because your assertion is this--simply by doubling in value, B shall command a double quantity of A--it follows inevitably, Phædrus, that besoms, having doubled their value in five years, will at the end of that time command a double quantity of barouches. The supposition is, that six hundred thousand, at present, command one barouche; in five years, therefore, six hundred thousand will command two barouches?

_Phæd_. They will.

_X_. Yet, at the very same time, it has already appeared from your argument that twelve hundred thousand will command only one barouche; that is, a barouche will at one and the same time be worth twelve hundred thousand besoms, and worth only one fourth part of that quantity. Is this an absurdity, Phædrus?

_Phæd_. It seems such.

_X_. And, therefore, the argument from which it flows, I presume, is false?

_Phæd_. Scavenger of bad logic! I confess that it looks so.

_Phil_. You confess? So do not I. You die "soft," Phædrus; give me the cudgels, and I'll die "game," at least. The flaw in your argument, X., is this: you summoned Phædrus to invert his proposition, and then you extorted an absurdity from this inversion. But that absurdity follows only from the particular form of expression into which you threw the original proposition. I will express the same proposition in other terms, unexceptionable terms, which shall evade the absurdity. Observe. A and B are at this time equal in value; that is, they now exchange quantity for quantity. Or, if you prefer your own case, I say that one barouche exchanges for six hundred thousand besoms. I choose, however, to express this proposition thus: A (one barouche) and B (six hundred thousand besoms) are severally equal in value to C. When, therefore, A doubles its value, I say that it shall command a double quantity of C. Now, mark how I will express the inverted case. When B doubles its value, I say that it shall command a double quantity of C. But these two cases are very reconcilable with each other. A may command a double quantity of C at the same time that B commands a double quantity of C, without involving any absurdity at all. And, if so, the disputed doctrine is established, that a double value implies a double command of quantity; and reciprocally, that from a doubled command of quantity we may infer a doubled value.

_X_. A, and B, you say, may simultaneously command a double quantity of C, in consequence of doubling their value; and this they may do without absurdity. But how shall I know _that_, until I know what you cloak under the symbol of C? For if the same thing shall have happened to C which my argument assumes to have happened to B (namely, that its value has altered), then the same demonstration will hold; and the very same absurdity will follow any attempt to infer the quantity from the value, or the value from the quantity.

_Phil_. Yes, but I have provided against _that_; for by C I mean any assignable thing which has _not_ altered its own value. I assume C to be stationary in value.

_X_. In that case, Philebus, it is undoubtedly true that no absurdity follows from the inversion of the proposition as it is expressed by you. But then the short answer which I return is this: your thesis avoids the absurdity by avoiding the entire question in dispute. Your thesis is not only not the same as that which we are now discussing; not only different in essence from the thesis which is _now_ disputed; but moreover it affirms only what _never_ was disputed by any man. No man has ever denied that A, by doubling its own value, will command a double quantity of all things which have been stationary in value. Of things in that predicament, it is self-evident that A will command a double quantity. But the question is, whether universally, from doubling its value, A will command a double quantity: and inversely, whether universally, from the command of a double quantity, it is lawful to infer a double value. This is asserted by Adam Smith, and is essential to his distinction of nominal and real value; this is peremptorily denied by us. We offer to produce cases in which from double value it shall not be lawful to infer double quantity. We offer to produce cases in which from double quantity it shall _not_ be lawful to infer double value. And thence we argue, that _until_ the value is discovered in some other way, it will be impossible to discover whether it be high or low from any consideration of the quantity commanded; and again, with respect to the quantity commanded--that, _until_ known in some other way, it shall never be known from any consideration of the value commanding. This is what we say; now, your "C" contradicts the conditions; "_until_ the value is discovered in some other way, it shall never be learned from the quantity commanded." But in your "C" the value is already discovered; for you assume it; you postulate that C is stationary in value: and hence it is easy indeed to infer that, because A commands double quantity of "C," it shall therefore be of double value; but this inference is not obtained from the single consideration of double quantity, but from _that_ combined with the assumption of unaltered value in C, without which assumption you shall never obtain that inference.

_Phæd_. The matter is clear beyond what I require; yet, X., for the satisfaction of my "game" friend Philebus, give us a proof or two _ex abundanti_ by applying what you have said to cases in Adam Smith or others.

_X_. In general it is clear that, if the value of A increases in a duplicate ratio, yet if the value of B increases in a triplicate ratio, so far from commanding a greater quantity of B, A shall command a smaller quantity; and if A continually goes on squaring its former value, yet if B continually goes on cubing its former value, then, though A will continually augment in value, yet the quantity which it will command of B shall be continually less, until at length it shall become practically equal to nothing. [Footnote: The reader may imagine that there is one exception to this case: namely, if the values of A and B were assumed at starting to be = 1; because, in that case, the squares, cubes, and all other powers alike, would be = I; and thus, under any apparent alteration, the real relations of A and B would always remain the same. But this is an impossible and unmeaning case in Political Economy, as might easily be shown.] Hence, therefore, I deduce,

1. That when I am told by Adam Smith that the money which I can obtain for my hat expresses only its _nominal_ value, but that the labor which I can obtain for it expresses its _real_ value--I reply, that the quantity of labor is no more any expression of the real value than the quantity of money; both are equally fallacious expressions, because equally equivocal. My hat, it is true, now buys me _x_ quantity of labor, and some years ago it bought _x/2_ quantity of labor. But this no more proves that my hat has advanced in real value according to that proportion, than a double _money_ price will prove it. For how will Adam Smith reply to him who urges the double money value as an argument of a double real value? He will say--No; non valet consequentia. Your proof is equivocal; for a double quantity of money will as inevitably arise from the sinking of money as from the rising of hats. And supposing money to have sunk to one fourth of its former value, in that case a double money value--so far from proving hats to have risen in real value--will prove that hats have absolutely fallen in real value by one half; and they will be seen to have done so by comparison with all things which have remained stationary; otherwise they would obtain not double merely, but four times the quantity of money price. This is what Adam Smith will reply in effect. Now, the very same objection I make to labor as any test of real value. My hat now obtains _x_ labor; formerly it obtained only one half of _x_. Be it so; but the whole real change may be in the labor; labor may now be at one half its former value; in which case my hat obtains the same real price; double the quantity of labor being now required to express the same value. Nay, if labor has fallen to one tenth of its former value, so far from being proved to have risen one hundred per cent. in real value by now purchasing a double quantity of labor, my hat is proved to have fallen to one fifth of its former value; else, instead of buying me only _x_ labor, which is but the double of its former value (_x/2_), it would buy me 5 _x_, or ten times its former value.

_Phil_. Your objection, then, to the labor price, as any better expression of the _real_ value than the money price, would be that it is an equivocal expression, leaving it doubtful on which side of the equation the disturbance had taken place, or whether on both sides. In which objection, as against others, you may be right; but you must not urge this against Adam Smith; because, on his theory, the expression is not equivocal; the disturbance can be only on one side of the equation, namely, in your hat. For as to the other side (the labor), _that_ is secured from all disturbance by his doctrine that labor is always of the same value. When, therefore, your hat will purchase _x_ quantity of labor instead of half _x_, the inference is irresistible that your hat has doubled its value. There lies no appeal from this; it cannot be evaded by alleging that the labor may have fallen, for the labor cannot fall.

_X_. On the Smithian theory it cannot; and therefore it is that I make a great distinction between the error of Adam Smith and of other later writers. He, though wrong, was consistent. That the value of labor is invariable, is a principle so utterly untenable, that many times Adam Smith abandoned it himself implicitly, though not explicitly. The demonstration of its variable value indeed follows naturally from the laws which govern wages; and, therefore, I will not here anticipate it. Meantime, having once adopted that theory of the unalterable value of labor, Adam Smith was in the right to make it the expression of real value. But this is not done with the same consistency by Mr. Malthus at the very time when he denies the possibility of any invariable value.

_Phil_. How so? Mr. Malthus asserts that there is one article of invariable value; what is more, this article is labor,--the very same as that formerly alleged for such by Adam Smith; and he has written a book to prove it.

_X_. True, Philebus, he has done so; and he _now_ holds that labor is invariable, supposing that his opinions have not altered within the last twelve months. But he was so far from holding this in 1820 (at which time it was that he chiefly insisted on the distinction between nominal and real value), that he was not content with the true arguments against the possibility of an invariable value, but made use of one, as I shall soon show you, which involves what the metaphysicians call a _non-ens_--or an idea which includes contradictory and self-destroying conditions. Omitting, however, the inconsistency in the idea of _real_ value as conceived by Mr. Malthus, there is this additional error engrafted upon the Smithian definition, that it is extended to "the necessaries and conveniences of life" in general, and no longer confined exclusively to labor. I shall, therefore, as another case for illustrating and applying the result of our dispute,

2. Cite a passage from Mr. Malthus' "Political Economy" (p. 59): "If we are told that the wages of day-labor in a particular country are, at the present time, fourpence a day, or that the revenue of a particular sovereign, seven or eight hundred years ago, was four hundred thousand pounds a year, these statements of nominal value convey no sort of information respecting the condition of the lower class of people in the one case, or the resources of the sovereign in the other. Without further knowledge on the subject, we should be quite at a loss to say whether the laborers in the country mentioned were starving or living in great plenty; whether the king in question might be considered as having a very inadequate revenue, or whether the sum mentioned was so great as to be incredible. [Footnote: Hume very reasonably doubts the possibility of William the Conqueror's revenue being four hundred thousand pounds a year, as represented by an ancient historian, and adopted by subsequent writers.--Note of Mr. Malthus.] It is quite obvious that in cases of this kind,--and they are of constant recurrence,--the value of wages, incomes, or commodities, estimated in the precious metals, will be of little use to us alone. What we want further is some estimate of a kind which may be denominated real value in exchange, implying the quantity of the necessaries and conveniences of life which those wages, incomes, or commodities, will enable the possessor of them to command."

In this passage, over and above the radical error about real value, there is also apparent that confusion, which has misled so many writers, between _value_ and _wealth_; a confusion which Mr. Ricardo first detected and cleared up. That we shall not be able to determine, from the mere money wages, whether the laborers were "starving or living in great plenty," is certain; and that we _shall_ be able to determine this as soon as we know the quantity of necessaries, etc., which those wages commanded, is equally certain; for, in fact, the one knowledge is identical with the other, and but another way of expressing it; we must, of course, learn that the laborer lived in plenty, if we should learn that his wages gave him a great deal of bread, milk, venison, salt, honey, etc. And as there could never have been any doubt whether we should learn _this_ from what Mr. Malthus terms the real value, and that we should _not_ learn it from what he terms the money value, Mr. Malthus may be assured that there never can have been any dispute raised on that point. The true dispute is, whether, after having learned that the laborer lived in American plenty, we shall have at all approximated to the appreciation of his wages as to real value: this is the question; and it is plain that we shall not. What matters it that his wages gave him a great deal of corn, until we know whether corn bore a high or a low value? A great deal of corn at a high value implies wages of a high value; but a great deal of corn at a low value is very consistent with wages at a low value. Money wages, it is said, leave us quite in the dark as to real value. Doubtless; nor are we at all the less in the dark for knowing the corn wages, the milk wages, the grouse wages, etc. _Given_ the value of corn, _given_ the value of milk, _given_ the value of grouse, we shall know whether a great quantity of those articles implies a high value, or is compatible with a low value, in the wages which commanded them; but, _until_ that is given, it has been already shown that the quantity alone is an equivocal test, being equally capable of coexisting with high wages or low wages.

_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.