O N   T H E   D I S T I N C T I O N   B E T W E E N   V A L U E   A N D

R I C H E S .


IN the last chapter the subject of the present one has been in some degree anticipated. It has been there shown what is the real amount of the assertion, that the riches of a society may be doubled or trebled without any thing being added to their value. The subject, however, is of so much importance, that it will be necessary to enter into a closer examination of it.

The distinction between riches and value is sufficiently obvious, riches signifying the commodities themselves (with one or more accessory ideas annexed), and value denoting the relation in exchange between any of these commodities. [163] Mr. Ricardo, nevertheless, has been singularly unfortunate in his attempt to discriminate them. His elaborate chapter, which contains it, appears to me to be a remarkable tissue of errors and uumeaning [sic] conclusions, arising from his fundamental misconception of the nature of value. Throughout the whole of this chapter, he speaks of value as the positive result of labour: whence it follows, that the same quantity of labour must always produce the same value, however much its productive powers may have increased. Riches, therefore, may be indefinitely multiplied, while no more labour is em ployed; but the value of the riches, under this condition, remains invariably the same.

Such is the sum and substance of his argument. The error of stating the value to remain constant has been sufficiently considered. There is still, however, an ambiguity or obscurity in the meaning of the term riches, which requires to be cleared up. Mr. Ricardo has regarded it as synonymous, sometimes, with commodities and at other times with abundance [164] of commodities. It is evidently used in a collective sense; it is a term expressive of aggregation, if not of plenty. The adjective rich is never applied but to denote the possession of abundance, or the means of commanding it, and it may be doubted whether the substantive riches is ever used without an implication Of the same idea. If it were merely a general expression for commodities, without any accessory idea, it might be discarded from, our speculations, and the latter word substituted in its stead. But such an experiment would not answer. We could not with any propriety change the title of Adam Smith's great work into “An Inquiry into the Nature and Causes of the Commodities of Nations.” We should approximate more nearly to the meaning of the original, were we to translate it, “An Inquiry into the Nature and Causes of the greater or smaller abundance of Commodities possessed by Nations.”

Whether the idea of abundance, however, is involved in the meaning of riches or not, [165] the idea of aggregation or collection cannot be excluded. A single grain of wheat is not wealth, although it may be said to be an article of wealth. The idea of possession also seems essential to it. Riches are not simply commodities as things existing, but as things possessed. The most useful articles in an uninhabited country could not be termed wealth, because they would have no proprietor. The country, it is true, might be denominated rich in such articles, but only inasmuch as it would be the container or possessor of them. There would still be the same idea of possession involved in our language.

Whatever difficulty may be found in furnishing a good and complete definition of riches, there can be none in establishing the difference between the terms riches and value, as used in the science, of Political Economy. Riches are the attribute of men, value is the attribute of commodities. A man or a community is rich; a pearl or a diamond is valuable. He pos-[166]sesses riches who is the owner of commodities which themselves possess value*; and, further, he is rich in proportion to the value of the objects possessed. Mr. Ricardo, indeed, denies that value is the measure of riches; but a slight consideration will show, that it is the only criterion by which we can determine whether one man or one community is richer than another. If the wealth of two men consisted in one single commodity, then, without entering into the question of exchange or value, we might determine that one was richer than the other, from mere excess of quantity. Even, however, in the simplest imaginable case of [167] this kind, there would necessarily be a superiority of value, if such an idea came at all into question, as well as of wealth. If the sole commodity in possession of the two individuals were corn, of which one possessed 500 quarters and the other 1000, the latter would not only be richer, but the proprietor of produce, the aggregate value of which was greater.

In all but this very simplest case, it would be impossible to decide with accuracy on the superiority of two individuals in point of riches, except by estimating their value in some common medium. Suppose the individual who possessed the 500 quarters of corn, was worth also 500 yards of cloth, while the other, who had 1000 quarters of corn, possessed only 100 yards of cloth; in what imaginable method could their riches be compared, and the superiority of one over the other be ascertained, except by means of their value, computed in some common medium of estimation, or reduced into one denomination ?

[168] With regard to heterogeneous commodities, there are in fact only two conceivable criteria of riches: one, the utility of any possessions; the other, their value. The first is in the highest degree unsteady and indeterminate, and altogether inapplicable. Iron, as Mr. Ricardo remarks, may be more useful than gold, but the possession of a pound of the former metal would not constitute a man as rich as that of an equal weight of the latter. Value, therefore, is the only criterion of riches which is left to us.

In determining, then, the question whether riches could be increased, without an increase of value, we must recur to the principles laid down in the last chapter. The answer in each particular case will depend on the medium of estimation. There is one additional remark, however, which may be here introduced. In the chapter referred to, a case was supposed, in which all commodities were produced in double quantity by the same labour, with the exception of one solitary article, and it was [169] admitted, that if the whole were estimated in this one commodity, the aggregate value would be unaltered. In this hypothetical case, nevertheless, it still remains to be determined how we are to estimate the value of the commodity chosen as the medium. In estimating the whole produce in this medium, we necessarily include the latter, and compute it as being worth itself. But value is a relation between two objects, and had we in any case to express the value of the medium, we must have recourse to one of the other commodities, when its value would appear to be doubled. Hence, although according to the supposed estimate, the aggregate value of the other commodities would be the same, the value of the medium would be twice as great as before ; and thus it might be truly said, that let us adopt what medium of estimation we please, no increase of riches can take place without an increase of value.