CHAPTER III.


O N   T H E   V A L U E   O F   L A B O U R .

 

UNLESS we change the meaning of value in the case of labour from that which it bears when applied to any thing else, the value of labour must signify the power of commanding other things in exchange. The term in reference to labour, as in all other cases, denotes a relation, and the relation, in this instance, must be between labour and commodities. Labour, therefore, is high in value when it commands a large, and low when it commands a small quantity of commodities ; and when labour is said to rise or fall in value, the expression implies, that a definite portion of it, a day's labonr [sic] for example, exchanges for a larger or a smaller quantity of commodities than before. This is [47] obviously the only interpretation of which the terms rise and fall of labour admit, consistently with the definition of value.

Before proceeding to apply these positions to the current doctrines of the day, it will be necessary to call the reader's attention to a comparison of the terms “value of labour,” and “wages,” and to the way in which they are employed. The value of labour, as we have just seen, signifies the relation in which labour stands to commodities. The term wages has the same meaning — for we may say indifferently the wages of labour are three shillings a day, or the value of labour is three shillings a day; but it is often employed with greater laxity of signification.

Mr. Ricardo, for example, talks of “the labour and capital employed in producing wages,” and of “the real value of wages*;” in which instances it is impossible to substitute [48] the term value of labour instead of wages, as might be done if the two expressions were used as synonymous and equivalent. We could not speak with propriety of “the labour and capital employed in producing the value of labour,” or of “the real value of the value of labour.”

The term wages, when thus used, appears intended to denote the commodities or money given to the labourer in exchange for his labour — not the value of his labour in money, but the money itself. This is either an unwarrantable use of the term, or there is a double meaning in it as I think a little consideration will show, although the distinction, which I shall attempt to make, may seem on a first glance to be a distinction without a difference. It will be acknowledged, that the value of labour can be expressed only by the quantity of some commodity given for a definite portion of it. Thus, if silver is that commodity, the value of a day's labour is expressed by the quantity of silver, or, what is the same thing, the number of shillings which [49] the labourer receives. This quantity of silver expresses the value of his labour, in the same

way that a certain quantity of silver expresses the value of a yard of cloth. Now the quantity of silver by which the value of a yard of cloth is expressed, we term the price of the cloth, and, in a manner strictly analogous, the quantity of silver by which the value of a day's labour is expressed, we term the wages of labour. The price of cloth and the wages of labour are so far exactly correspondent expressions. But when I speak of the price of cloth as the subject of causation or change, I do not intend the silver itself. The price of the cloth may be twenty shillings, but what causes the price is not what causes that quantity of silver. To consider the price as being or consisting in the actual silver itself, is an error of the same kind as to consider the length of a piece of timber as consisting in the instrument which we employ to measure it. Were I to speak of the real value of the price of cloth, or of the labour and capital employed in producing the price of [50] cloth, I should be thought to make use of strange language. Could any meaning be attached to the latter expression, it would be the labour and capital employed in producing the cloth itself, and not in producing the silver in which I expressed the value of the cloth. The same remarks must equally apply to the use of the term wages, if it has only one, meaning. If I speak of the labour and capital employed in producing wages, it is in this case equivalent to speaking of the labour and capital employed in producing labour itself, and not in producing the silver or any other commodity given for labour. Mr. Ricardo, however, by this phraseology, evidently means the labour and capital employed in the production of the money, or of the commodities in which the value of labour is expressed — a singular perversion of terms, arising probably from an unconscious identification of two distinct ideas; or, if it is not a perversion of terms, there are evidently two senses in which the same word is used.

Hence Mr. Ricardo, ingeniously enough [51] avoids a difficulty, which, on a first view, threatens to encumber his doctrine, that value depends on the quantity of labour employed in production. If this principle is rigidly adhered to, it follows, that the value of labour depends on the quantity of labour employed in producing it — which is evidently absurd. By a dexterous turn, therefore, Mr. Ricardo makes the value of labour depend an the quantity of labour required to produce wages, or, to give him the benefit of his own language, he maintains, that the value of labour is to be estimated by the quantity of labour required to produce wages, by which he means, the quantity of labour required to produce the money or commodities given to the labourer. This is similar to saying, that the value of cloth is to be estimated, not by the quantity of labour bestowed on its production, but by the quantity of labour bestowed on the production of the silver, for which the cloth is exchanged.

From the preceding observations it appears, [52] that either the term wages has two meanings, or it has been used with improper laxity. In order to avoid any ambiguity which might arise from it, I shall in general employ in its stead the expression, value of labour, by which, in consonance with the usual definition of value, I mean the power which a definite portion of labour possesses, of commanding in exchange any other commodity compared with it.

It has been already stated, that when labour is said to rise or fall in value, the expression implies, that a definite portion of it exchanges for a larger or smaller quantity of some commodity or commodities than it did before. This however is not the view taken by Mr. Ricardo of the value of labour; for he enters into various details to show, that although the labourer might receive more commodities in exchange for his labour, yet the value of his labour, notwithstanding, might have fallen.

“It is not,” says he, “by the absolute quantity of produce obtained by either class, that [53] we can correctly judge of the rate of profit, rent, and wages, but by the quantity of labour required to obtain that produce. By improvements in machinery and agriculture, the whole produce may be doubled ; but if wages, rent, and profit be also doubled, these three will bear the same proportions to one another as before, and neither could be said to have relatively varied. But if wages partook not of the whole of this increase; if they, instead of being doubled, were only increased one half; if rent, instead of being doubled, were only increased three-fourths, and the remaining increase went to profit, it would, I apprehend, be correct for me to say, that rent and wages had fallen while profits had risen; for if we had an invariable standard by which to measure the value of this produce, we should find that a less value had fallen to the class of labourers and landlords, and a greater to the class of capitalists, than had been given before. We might find, for example, that though the absolute quantity of commodities had been doubled, they were the [54] produce of precisely the former quantity of labour. Of every hundred hats, coats, and quarters of corn produced, if

The labourers had before . . . . 25
The landlords . . . . . . . . . . . . 25
And the capitalists . . . . . . . . . 50
100

And if, after these commodities were double the quantity, of every 100

The labourers had before . . . . 22
The landlords . . . . . . . . . . . . 22
And the capitalists . . . . . . . . . 56
100

In that case I should say, that wages and rent had fallen, and profits risen; though, in consequence of the abundance of commodities, the quantity paid to the labourer and landlord would have increased in the proportion of 25 to 44. Wages are to be estimated by their real value, viz. by the quantity of labour and [55] capital employed in producing them, and not by their nominal value, either in coats, hats, money, or corn. Under the circumstances I have just supposed, commodities would have fallen to half their former value, and if money had not varied, to half their former price also. If then in this medium, which had not varied in value, the wages of the labourer should be found to have fallen, it will not the less be a real fall, because they might furnish him with a greater quantity of cheap commodities than his former wages*.”

In this passage may be noted several of those errors on which I have already animadverted in the preceding chapters. In one part he supposes the possibility of an invariable standard of value amidst universal fluctuation, a supposition which has been shown to involve contradictory conditions: in another part, he makes the unmeaning distinction of real and nominal value, and in another he asserts, that if all commodities were produced in double quantity [56] by the same labour, they would fall to half their former value, the correctness of which will be hereafter examined in the chapter on the methods of estimating value.

The error, however, which it belongs to the purpose of the present chapter to point out, is a departure from his own definition of value. Instead of regarding labour as rising or falling according as it commands a greater or smaller quantity of the commodities exchanged for it, which is a direct corollary from the definition of value as the power of purchasing or commanding other objects in exchange, he represents it as rising or falling only when a larger or smaller proportion of the commodity produced goes to the labourer. This variation in the proportion of the product is undoubtedly one source of variation in the value of labour, but it is not the sole source. As value, when applied to labour, denotes its relation to other things, that value must vary, not only from causes which affect labour, but from causes which affect the commodities received in exchange for it. To take Mr. Ricardo's own [57] case in the preceding extract. He says, that if by improvements in machinery and agriculture, the whole produce of a country were doubled, while the quantity of labour employed continued the same, and if before this increase of produce, of every hundred hats, coats, and quarters of corn, the labourer received 25, and after the increase only 22, then wages would have fallen, although the labourer actually received 44, where he before received only 25. But if by a fall of wages is meant a fall in the value of labour; if, further, by value we mean the power of commanding other things in exchange, and if the degrees of that power are in proportion to the quantity commanded, then it is evident that so far from wages falling they would have risen, inasmuch as a definite portion of labour would command in exchange an increased quantity of hats, coats, and corn.

I have said, that an alteration in the proportion of the product assigned to the labourer is one cause of variation in the value of labour: for it is manifest, that if out of a fixed quantity of hats, coats, and corn, the labourer receives [58] at one time a quarter, and at another time half, his labour at the latter period will be doubled in value in relation to these commodities. Mr. Ricardo's error, it deserves to be repeated, lies in considering this change in the proportion to be the only cause of change, or rather the only case of change in the value of labour*.

[59] His assertion in another place, that “the labourer is only paid a really high price for his labour, when his wages will purchase the produce of a great deal of labour*,” is only another mode of stating the same doctrine, and amounts to this, that wages are high only when a great proportion of the article produced falls to the labourer. For wages at the same period being on a level in the different branches of industry, if a man's wages (to use Mr. Ricardo's language) will purchase the produce of a great deal of labour, they will purchase the produce of a great deal of any sort of labour, consequently the produce of a great deal of his own labour, that is, the proportion falling to him of the produce of his own labour will be great.

The author of the Templars' Dialogues, who pushes Mr. Ricardo's doctrines to their remotest Consequences, and thus, if they are untrue, necessarily exposes their incorrectness by [60] the paradoxes into which he falls, has not failed to drive this doctrine of the value of labour to an extravagant result. “Wages,” says he, “are at a high veal value, when it requires much labour to produce wages; and at a low real value, when it requires little labour to produce wages : and it is perfectly consistent with the high real value — that the labourer should be almost starving; and perfectly consistent with the low real value — that the labourer should be living in great ease and comfort*.”

Well might the author's friend Philoebus exclaim at this extraordinary passage, “this may be true: but you must allow, that it sounds extravagant.”

Let us examine it by the test before given: let us ask, value in what? If the labourer is starving, in relation to what is his labour of high value? In relation to corn? If so, he would obtain a large quantity of corn in ex-[61]change for his labour, and could not starve. It will be replied, perhaps, that corn is high too, and therefore, although labour is high, the labourer obtains little corn. But if corn and labour are both affirmed to be high, the assertion must mean, that they are high in relation to other commodities, as it is an absurdity to say, that they are both at once high in relation to each other. If therefore the labourer obtains little corn, labour must be low in relation to corn.

The same result will be obtained if the definition of value is substituted for the term. The author's proposition then would be, “it is perfectly consistent with a great power of commanding commodities in exchange for his labour, that the labourer should be almost starving, and perfectly consistent with a small power, that the labourer should be living in great ease and comfort." This is asserting power to be in an inverse ratio to the effects produced *.