O N T H E N A T U R E O F V A L U E .
VALUE, in its ultimate sense, appears to mean the esteem in which any object is held. It denotes, strictly speaking, an effect produced on the mind; but as we are accustomed in other cases to give a common name to a feeling and to the cause which has excited it, and to blend them together in our thoughts, so in this case we regard value as a quality of external objects. Colour and fragrance, for example, are words which designate both the cause and the effect, both the material quality which produces the feeling in the mind, and the feeling produced. The philosopher, however, is the only one who discerns the distinction, and colour and fragrance are never thought of by the ge-nerality of men, but as qualities of external objects.
It is precisely in the same way, that value is regarded as a quality belonging to the objects around us. We lose sight of the feeling of the mind, and consider only the power which the object possesses of exciting it, as something external and independent.
It is not, however, a simple feeling of esteem, to which the name of value, as used by the political economist, can be given. When we consider objects in themselves, without reference to each other; the emotion of pleasure or satisfaction, with which we regard their utility or beauty, can scarcely take the appellation of value. It is only when objects are considered together as subjects of preference or exchange, that the specific feeling of value can arise. When they are so considered, our esteem for one object, or our wish to possess it, may be equal to, or greater, or less than our esteem for another: it may, for instance, be doubly as great, or, in other words, we would give one  of the former for two of the latter. So long as we regarded objects singly, we might feel a great degree of admiration or fondness for them, but we could not express our emotions in any definite manner. When, however, we regard two objects as subjects of choice or exchange, we appear to acquire the power of expressing our feelings with precision, we say, for instance, that one A is, in our estimation, equal to two B. But this is not the expression of positive, but of relative esteem; or, more correctly, of the relation in which A and B stand to each other in our estimation. This relation can be denoted only by quantity. The value of A is expressed by the quantity of B for which it will exchange, and the value of B is in the same way expressed by the quantity of A. Hence the value of A may be termed the power which it possesses or confers of purchasing B, or commanding B in exchange. If, from any consideration, or any number of considerations, men esteem one A as highly as two B, and are willing to exchange the two commodities in that  ratio, it may be correctly said, that A has the power of commanding two B, or that B has the power of commanding half of A.
The definition of Adam Smith, therefore, that the value of an object “expresses the power of purchasing other goods, which the possession of that object conveys, is substantially correct; and as it is plain and intelligible, it may be taken as the basis of our subsequent reasonings, without any farther metaphysical investigation.
According to this definition, it is essential to value, that there should be two objects brought into comparison*. It cannot be predicated of one thing considered alone, and without reference to another thing. If the value of an object is its power of purchasing, there must be something to purchase. Value denotes consequently nothing positive or intrinsic, but  merely the relation in which two objects stand to each other as exchangeable commodities.
In the circumstance, that it denotes a relation between two objects, and cannot be predicated of any commodity without an express or implied reference to some other commodity, value bears a resemblance to distance. As we cannot speak of the distance of any object without implying some other object, between which and the former this relation exists, so we cannot speak of the value of a commodity but in reference to another commodity compared with it. A thing cannot be valuable in itself without reference to another thing, any more than a thing can be distant in itself without reference to another thing.
It follows from this view of value as a relation, that it cannot alter as to one of the objects compared, without altering as to the other. It would be an absurdity to suppose, that the value of A to B could alter, and not the value of B to A ; that A could rise in value to B, and B remain stationary in value to A ; an absurdity of much the same kind as supposing, that the dis-tance of the earth from the sun could be altered, while the distance of the sun from the earth remained as before.
Suppose that at some former period, when the value of commodities was determined by the quantity of labour required to produce them, A and B were the only exchangeable commodities in existence, and that they were of equal value. If, from any circumstances, A should, at a subsequent period, require double the quantity of labour for its production, while B continued to require only the same, A would become of double value to B; or, in other words, one A would exchange for two B. But although B continued to be produced by the same labour, it would not continue of the same value, for it would exchange for only half the quantity of A, the only commodity, by the supposition, with which it could be compared.
It may be objected to this representation of the relative nature of value, that when we say the value of A is equal to the value of B, the expression implies a quality intrinsic and abso-lute in each; for otherwise, how could we affirm that an equality existed between these two values ? If the term value denotes merely a relation between A and B, would it not be absurd to talk of the equality of their values, just as it would be absurd in speaking of the distance between the sun and the earth, to talk of an equality of their distances from each other ?
In reply to this objection, if we examine the real import of our expression, when we affirm the value of A to be equal to the value of B, we shall find to mean neither more nor less than this, that A will exchange for B. This simple proposition contains the whole amount of meaning coached under the phrase, and it obviously expresses or includes no intrinsic or absolute quality in either commodity, but merely states a relation in which they stand to each other.
The phrase, the value of A is equal to the value of B, is in this view of the subject not altogether accurate; that is to say, if we speak only of two objects, without reference to  any others. But it will be found, that, in speaking of the value of A being equal to the value of B, we are led to use the expression by the constant reference which we unavoidably make to the relations of these commodities to other commodities, particularly to money, and the import of our language, in its whole extent, is, that A and B bear an equal relation to a third commodity, or to commodities in general.
It is from this circumstance of constant reference to other commodities, or to money, when we are speaking of the relation between any two commodities, that the notion of value, as something intrinsic and absolute, has arisen. When we compare objects with each other as exchangeable commodities, two relations necessarily mix themselves in our comparison the mutual relation of the objects, and their relations to other objects ; and it is these latter which occasion the semblance of absolute value, because they seem independent of the former, which is the immediate object of our attention. Indeed, it is generally by their relation to a third commodity, that we can at all  ascertain the mutual relation of two commodities which we are desirous of comparing. If we wish to know whether A and B are equal in value, we shall in most cases be under the necessity of finding the value of each in C ; and when we affirm that the value of A is equal to the value of B, we mean only that the ratio of A to C is equal to the ratio of B to C.
The relative nature of value has not, it appears to me, been distinctly seen or uniformly kept in view by our best writers on the subject. Mr. Ricardo, for instance, who agrees with Dr. Smith in his definition of value, asserts, that if any one commodity could be found, which now and at all times required precisely the same quantity of labour to produce it, that commodity would be of an unvarying value*.
 If value, however, denotes merely a relation, this proposition cannot be true. We may ask, to what would this commodity bear an invariable value? What is the correlative? Would it bear the same value to all other commodities ? It might do so, it is true, but certainly not in consequence of being produced by an unvarying quantity of labour: for while the labour, in this instance, remained a fixed quantity, yet if the labour in other commodities were increased or diminished, the relations of value between this one commodity, and all others, would, on Mr. Ricardo's own principle, be instantly altered.
If corn, for example, always required precisely the same quantity of labour to produce it, but all other commodities whatever came to  be produced by half the labour formerly expended upon them, the value of corn could in no sense be said to remain the same. In proof of this, take Mr. Ricardo's own definition of value, the power of purchasing other goods which the possession of an object conveys. To say that a commodity is of unvarying value, is, according to this definition, equivalent to saying that its power of purchasing other goods remains constantly uniform; or, to vary the language, that the quantity of other goods for which it will exchange never alters. But, in the example we have adduced, the same quantity of corn would exchange for an increased quantity of any other commodity; and consequently, by Mr. Ricardo's own definition, would have risen in value.
It may possibly be alleged, that it is not the corn, but other commodities which have varied in value, and therefore Mr. Ricardo's language is correct. If value were a positive or intrinsic quality, this might be true; but since it denotes a mere relation between two objects, to suppose any alteration could take place in this relation  as to one and not as to the other ; to suppose that the value of A to B could be altered, and not the value of B to A, would, as I have already remarked, be as absurd, as supposing that the distance of the sun from the earth could be increased or decreased, while the distance of the earth from the sun remained as before.
The truth intended to be conveyed by saying that B remains of the same value is, that the cause of the altered relation between A and B is in the former, and not in the latter; and to determine where the change originated is in fact the whole object of those who endeavour to show what commodities have remained stationary in value, and what have varied.
It is so important to bear in mind, in these cases of rising and falling, that as A rises, B necessarily falls; or, to speak with greater precision, that the value of A cannot increase in relation to B, without the value of B decreasing in relation to A, that I may be pardoned for still further showing the impropriety, or at least the danger, of using the terms rise and fall in  a way which implies, that when A rises or falls B remains stationary. If A, in consequence of additional labour expended upon it, or any other cause, were to increase in value relatively to the mass of commodities which way be represented under the letters BC D, it would be said, by most economists, that B C D had not fallen, but remained stationary; although they would evidently have fallen, or become of less value, in relation to A. The assertion of their remaining stationary, can mean only stationary to each other; and in this sense it is perfectly correct, but the correctness of the language as to B, C, or D individually, evidently depends on the existence of some other commodity to which its relation remains undisturbed. Were there only two commodities in question, the phrase remaining stationary would be altogether erroneous; and when there are more than two, when there are a number of commodities concerned, some of which have varied in the circumstances of their production, while others have undergone no change, this phraseology becomes destitute of all precision, and  leads either to vague and nugatory propositions, or to positive error.
An illustration of these remarks may be found in a passage of Mr. Ricardo's work, where he maintains, in opposition to M. Say, that if, in consequence of increased facility in producing other commodities, cloth should exchange for a double quantity of them, compared to what it did before, we ought to say, that cloth retained its former value, and that the commodities, compared with it, had fallen to half their former value.* This language,  however, would be evidently incorrect, unless the value of an object were something intrinsic, and independent of other commodities; but since value, as 1 have shown, is essentially relative, if any commodities had fallen in relation to cloth, cloth must have acquired additional value, or have risen in relation to those commodities.
Mr. Ricardo's proposition might, indeed, be true, if he meant by other commodities only a certain number of other commodities. These, for convenience, may be termed Class 1, and all commodities not included in Class I may be referred to Class 2. Now if Mr. Ricardo meant, that when Class I came to be produced with increased facility, so as to exchange for half the quantity of cloth, while Class 2, in point of facility of production, remained as before, cloth would retain its former value in relation to Class 2, he would be perfectly correct; but if this had been his meaning, there could have been no point of dispute between him and the author on whose language he is animadverting; and that it was not what  be intended, the connection and tenour of the whole passage sufficiently evince.
The contradiction involved in affirming the stationary or invariable value of any object amidst the variations of other things, is so direct and palpable, that it may be instructive to point out the way in which a writer of such powers of reasoning, as Mr. Ricardo unquestionably possessed, has been led into so strange and manifest an error.
Since value denotes a relation between two objects, no arguments are required to prove, that it cannot arise from causes affecting only one of the objects, but must proceed from two causes, or two sets of causes respectively operating on the objects between which the relation exists*. If A is equal in value to B,  this must be owing not only to causes operating on A, but also to causes operating on B. The fact of a pound of gold exchanging for fifteen times the quantity of corn that can be obtained for a pound of silver, cannot be referred to causes operating on the corn, but to a difference in the causes operating on gold and silver. Hence, how constant or uniform soever a cause affecting one commodity may be, it cannot make that object of constant value, without the concurrence of other invariable causes acting upon the commodity with which it is compared.
It is precisely this essential circumstance, which has escaped the notice of Mr. Ricardo. When he asserts, that a commodity would be of invariable value, if it were always produced by the same quantity of labour, he overlooks one half of the causes concerned in the determination of value; for a moment's consideration will teach us, that such a commodity could be of invariable value, in relation to those commodities alone, of which the producing labour had also remained a constant quantity. Not ad-verting to this, Mr. Ricardo appears to have reasoned, that because the quantity of labour (according to his doctrine) is the cause of value, if the cause in any one commodity remains the same, the effect must necessarily be the same. But granting his doctrine, that the quantity of labour determines value, it must be the quantity requisite for the production of each commodity compared, and not the quantity requisite for that of only one. The value of both, or their relation to each other, must necessarily vary with every change in the quantity of producing labour required for either.
To assert indeed, that the value of an object, or its relation to another object, was invariable, because whatever alteration had taken place in the latter object, the former had undergone no change in the conditions of its production, would be as absurd as to assert the unvarying likeness of a portrait to the original, because, however the man had altered in feature, the portrait itself had retained precisely the same lineaments. The relation of value, as well as  the resemblance between two objects, depends upon both, and changes with a change in either of them.
Mr. Ricardo's modifications of his doctrine of the invariable value of a commodity produced by the same quantity of labour, make no difference in the force and applicability of the preceding remarks. For he still asserts, that a commodity produced by a uniform quantity of labour, would be of invariable value in relation to commodities produced under the same circumstances as itself*, as to the proportions of fixed and circulating capital, the durability of the fixed capital, and the time required to bring the commodity to market. If a commodity, for instance, were produced solely by labour, and always required the same quantity to produce it, it would be of invariable value in regard to such commodities as were produced by labour alone.
Mr. Ricardo, indeed, so far agrees with the view here taken, as to maintain the impossibility of finding any commodity of invariable value.
 His reason for this opinion is not, however, that the value of this commodity would necessarily vary with the value of the commodities compared with it, but that no commodity could be found, which is not itself exposed to the same causes of fluctuation as all other commodities. My proposition is, that if the causes affecting any one commodity continued unaltered, this commodity would not be invariable in value, unless the causes affecting all commodities compared with it, continued unaltered. Mr. Ricardo, on the contrary, maintains, that provided the causes affecting one commodity were always the same, the commodity would he of invariable value, in regard to commodities produced under the same circumstances, notwithstanding any changes in the causes affecting them, provided those changes did not extend to the proportions betwixt the fixed and circulating capital, the durability of the fixed capital, or the length of time required to bring the commodity to market. What I assert is, that if all commodities were produced under ex-actly the same circumstances, as for instance, by labour alone, any commodity, which always required the same quantity of labour, could not be invariable in value, while every other commodity underwent alteration: he asserts, on the other hand, that such a commodity would be invariable, and, according to his doctrine hereafter to be examined, would form a perfect measure of other things.
Clear and definite ideas on the present subject are so essential to the political economist, that it will not be a vain labour to point out the mistakes of another eminent writer concerning it. Mr. Malthus has not avoided those of Mr. Ricardo. After defining value, in accordance with that writer, as expressing the power of commanding other objects in exchange; he proceeds to say, that this power may obviously arise either from causes affecting the object itself, or the commodities against which it is exchanged*. In the one case, the value of  the object itself may properly be said to be affected; in the other, only the value of the commodities which it purchases; and if we  could suppose any object always to remain of the same value, the comparison of other commodities with this one would clearly show which had risen, which had fallen, and which had remained the same. The value of any commodity estimated in a measure of this kind, might with propriety be called its absolute or natural value; while the value of a commodity estimated in others which were liable to variation, whether they were one or many, could only be considered as its nominal or relative value, that is, its value in relation to any particular commodity, or to commodities in general*.
We have here invariable, absolute, natural, nominal, and relative value; but, throughout the whole of the passage, the notion of value as something intrinsic or absolute is apparent. Departing at once from his own definition, he maintains, that the value of an object may be affected without affecting the value of the com-modities for which it is exchanged : that is, that the power of A in commanding B in exchange may be altered, while the power of B in commanding A remains as before. Mr. Malthus has fallen into the same error) which we have already noticed in Mr. Ricardo ; the error of supposing, that if a commodity continued the same in the circumstances of its production, it would retain the same value amidst the fluctuations of other commodities. The inconsistency of this with the definition of value, has already been sufficiently exposed; and as it is the basis of Mr. Malthus's notion of absolute value, that notion necessarily falls to the ground. The very term absolute value, implies the same sort of absurdity as absolute distance ; while the invariable value of one object, amidst the fluctuations of all other things, is as self-contradictory a notion as the invariable resemblance of a picture, to the natural scenery from which it was taken, amidst all the vicissitudes of the seasons, the touches of time, and the encroachments of art.
 The same error runs through the whole of Mr. Malthus's pamphlet, entitled The Measure of Value stated and illustrated; and is involved in the position which it is the object of that pamphlet to establish. He maintains, after Adam Smith, that labour is always of the same value; that is, according to his own definition, always retains the same power of commanding other objects in exchange; and yet, in the same treatise, lie speaks of the labourer earning a greater or smaller quantity of money or necessaries, and insists that it is not the value
of the labour which varies, but the value of the money or the necessaries. As if produce or money could change in value relatively to labour, without labour changing in value relatively to produce or money. But we need not be surprised at any implied inconsistency in Mr. Malthus, when, after having set out with the definition which we have already quoted, that value is the power of commanding other objects in exchange, or, in other words, the power of purchasing, he subsequently makes  the direct assertion, that although money may increase in its power of purchasing, it does not necessarily increase in value*. If Mr. Malthus thus abandons his own definition, what other will he put in its place ?
I have already shown, that the power of purchasing, or the power of commanding other objects in exchange, can be expressed only by quantity. In other words, the value of one commodity can be expressed only by the quantity of some other object for which it will exchange. When a hat is said to be twenty shillings in value, it is obvious that the value of the hat is expressed by the quantity of silver: when a yard of cloth is said to be worth two bushels of wheat, the value of the cloth is expressed by the quantity of wheat. It is impossible to designate, or express the value of a commodity, except by a quantity of some other commodity.
The power of purchasing, or the value of an object in relation to some other object, admits  of degrees ; it may be greater or less; which means, that the former object may command a greater or smaller quantity of the latter. In no other sense can the power of one commodity to purchase another be said to increase or decrease. As the value of an object A, can be expressed only by the quantity of some other object B, so an increase in the value of A, can be expressed only by an increase in the quantity of B.
Simple as these conclusions appear to be, and directly flowing from the definition of value universally adopted, Mr. Ricardo has drawn contrary inferences. Although he agrees with Dr. Smith, in defining value to express the power of purchasing, and although, in the very first proposition in his book, he speaks of the value of a commodity as synonymous with the quantity of any other commodity, for which it will exchange *, yet in another chapter of his  work lie says, I cannot agree with M. Say in estimating the value of a commodity by the abundance of other commodities, for which it will exchange *Lien. In accordance with the definition, this means that he cannot agree with M. Say in estimating the power of a commodity to purchase other commodities, by the quantity of the latter, which it will purchase. But if the power of a commodity to purchase be not measured by the quantity purchased, what other mode of estimation can be found? It is no great degree of boldness to challenge the whole body of economists to produce a different meaning of the word power, or a different measure of its degrees.
One of the most accomplished of Mr. Ricardo's disciples, the author of the Templars' Dialogues on Political Economy, whose writings  can seldom be read without both pleasure and instruction, is still more explicit on this subject, and more unmeasured in his language than Mr. Ricardo himself. He asserts, in terms to which nothing can lend additional positiveness, that there is no necessary connection at all, or of any kind, between the quantity commanded, and the value commanding*: and again, I presume, that in your use, and in every body'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 †.
The plausibility of this passage will disappear on a little reflection. An article of high value, A, will truly enough purchase another article of equally high value, B, but these two articles will not be high in relation to each other: the term high, in this connection, must  be used to denote their value in relation to a third commodity, or to commodities generally; and the precise reason why A and B are said to be high in relation to a third commodity, is, that a small quantity of them commands in exchange a large quantity of the latter. Gold is said to be fifteen times more valuable than silver, because an ounce of gold, no matter from what cause, will command fifteen ounces of silver. So far, therefore, from quantity being excluded from any man's idea of value, it is essential to it, and to express value, except by quantity, is impossible. The mistake, both in this writer and in Mr. Ricardo, evidently arises from an inaccurate apprehension of the true nature of value. Instead of regarding value as a relation between two objects, they seem to consider it as a positive result produced by a definite quantity of labour. If the quantity of labour necessary for the production of an object is always the same, the value according to them is always the same, however other objects may have varied; so that, in fact, the circum-stance of its being produced by a certain quantity of labour constitutes its value, independently of any other circumstances. Whatever variations there might be in the quantities of other things which this object commanded, it would be still of the same value, because produced by the same labour.
These authors appear to have had an unsteady apprehension of a sufficiently distinct proposition, and one, too, on which they have largely insisted, namely, that the values of commodities are in the same ratio as the quantities of labour bestowed upon them. Sometimes they have apparently construed this to mean, that the value of any one commodity is in proportion to the labour employed upon it. Because the values of A and B, according to their doctrine, are to each other as the quantities of producing labour, or, as it is sometimes expressed, are determined by the quantities of producing labour, they appear to have concluded, that the value of A alone, without reference to any thing else, is as the quantity of its pro-ducing labour. There is no meaning certainly in this last proposition, but there is so much of the appearance of it, that the most cautious investigator might be led astray by the semblance.
After these critical strictures, it is a pleasure to cite a passage from an author, whose views as to the nature of value appear to me to be sounder than those of any other writer.
Even if a commodity, says he, could be found, which always required the same expenditure for its production, it would not therefore be of invariable exchangeable value, so as to serve as a standard for measuring the value of other things. Exchangeable value is determined, not by the absolute, but by the relative cost of production. If the cost of producing gold remained the same, while the cost of producing all other things should be doubled, then would gold have a less power of purchasing all other things than before; or, in other words, its exchangeable value would fall one half; and this diminution in its exchangeable value would be precisely the same in effect, as if the  cost of all other things remained unaltered, while that of producing gold had been reduced one half. In the very term, exchangeable value, a relative and not an absolute quantity is implied. If gold should have a greater or a less power of purchasing all other things, then all other things would have a greater or less power of purchasing gold. It is impossible to increase the exchangeable value of one set of commodities, without at the same time diminishing the exchangeable power of the other set of commodities with which the first is compared *.
The following propositions may be stated as the results of the investigation in which we have been employed. Simple as they appear, we have seen that it is possible to overlook them.
1. Inasmuch as the term value denotes a relation between two objects, a commodity cannot be said to possess value, or to alter in value, 
without an express or implied reference to some other commodity. Its value must be value in something, or in relation to something.
2. This relation between two objects cannot alter as to one, without altering as to the other. If A rises in relation to B, B cannot remain stationary, but must fall in relation to A.
3. The value of a commodity can be expressed only by a quantity of some other commodity.
4. A rise in the value of a commodity A, means, that an equal quantity of this commodity exchanges for a greater quantity than before of the commodity B, in relation to which it is said to rise.
5. A fall in the value of A, means, that an equal quantity of it exchanges for a smaller quantity of B.
In the examination of the present subject, as discussed by those writers on whose doctrines I have ventured to animadvert, I have been, forcibly struck with the vagueness, the inconsistencies, and the errors, which have arisen  from speaking of value as a sort of general and independent property; and I cannot too strongly recommend the student of political economy never to let the word value pass before him without putting the question, value in what? or, in relation to what? The value of a commodity must be its value in something, and whenever the term is used with any definite meaning, that something may be assigned. If it cannot be assigned, the reader may rest assured that the author, whoever he be, is writing without any determinate ideas. Whoever resolutely applies this rule in reading our economical writers, will be surprised and pleased at the light which it will pour over their pages.
The most difficult and obscure passages will frequently brighten into perspicuity, and the sum of their truth as well as of their error will stand apparent. The brilliant paradox, the ingenious fallacy, the seemingly profound observation, will separate into two distinct parts, one exhibiting the gaudy fragments of sophistry and delusion, the other the simple truth,  which they only served to hide with their cumbrous splendour. We may apply to the rigorous exaction of a uniform sense, from the terms employed in discussions of this nature, what an eloquent writer has said of the detection of a fallacy in a fundamental maxim.
To discover error in axioms, says he, or in first principles grounded on facts, is like the breaking of a charm. The enchanted castle, the steep rock, the burning lake disappear: and the paths that lead to truth, which we imagined to be so long, so embarrassed, and so difficult, show as they are, short, open, and easy *.