rise to much animated discussion, have conspired to disseminate and improve the science.
Among the writers who have signalized themselves in these discussions, Mr Ricardo holds a distinguished place.—His Essay on the "High Price of Bullion," first clearly pointed out the circumstances regulating the amount of circulating medium in all commercial countries; and his Essays "On the Profits of Stock," and on "Currency," develop principles of the utmost importance, and abound in views equally just, novel, and ingenious. Such being the case, a more than ordinary interest must be excited by the appearance of the work before us, in which this able economist has explained his opinions respecting some of the fundamental doctrines of the science, and in which, as it appears to us, he has established some highly important principles, and rectified many prevailing errors.
Nothing has contributed in a greater degree to perplex and confuse the investigations respecting the principles of political economy, than the confounding together of what Dr Smith has termed value in use, and value in exchange. Air is extremely useful; it is not possible to exist without it; but as it can be had at pleasure, as all can acquire it without any exertion, it has no exchangeable value. Utility, then, as Mr Ricardo has observed, is not the measure of exchangeable value, although it is absolutely essential to it. If a commodity were in no way useful,—in other words, if it could in no way contribute to our gratification,—it would be destitute of exchangeable value, however scarce it might be, or whatever quantity of labour might be necessary to procure it.
"Possessing utility, commodities derive their exchangeable values from two sources: from their scarcity, and from the quantity of labour required to obtain them.
"There are some commodities, the value of which is determined by their scarcity alone. No labour can increase the quantity of such goods, and therefore their value cannot be lowered by an increased supply. Their value is wholly independent of the quantity of labour originally necessary to produce them, and varies with the varying wealth and inclinations of those who are desirous to possess them.
"These commodities, however, form a very small part of the mass of commodities daily exchanged in the market. By far the greater part of those goods, which are the objects of desire, are procured by labour; and they may be multiplied, not in one country alone, but in many, almost without any assignable limit, if we are disposed to bestow the labour necessary to obtain them.
"In speaking then of commodities, of their exchangeable value, and of the laws which regulate their relative prices, we mean always such commodities only as can be increased in quantity by the exertion of human industry, and on the production of which competition operates without restraint."
In the early stages of society, the exchangeable value of these commodities, or the rule which determines how much of one shall be given in exchange for another, depends solely on the comparative quantity of labour expended on each.
"The real price of every thing," says Dr Smith, "what every thing really costs to the man who wants to acquire it, is the toil and trouble of acquiring it. What every thing is really worth to the man who has acquired it, and who wants to dispose of it, or exchange it for something else, is the toil and trouble which it can save to himself, and which it can impose on other people. * * * If, among a nation of hunters, for example, it usually cost twice the labour to kill a beaver which it does to kill a deer, one beaver should naturally exchange for, or be worth, two deer. It is natural, that what is usually the produce of two days', or two hours' labour, should be worth double of what is usually the produce of one day's or one hour's labour."
That this is the only real foundation of exchangeable value seems indisputable; and hence it follows, that every increase in the quantity of labour must augment the value of that commodity on which it is necessarily expended, as every diminution of that quantity must proportionally lower its value.
It may perhaps be thought, that although this is the case in early stages of society, in an advanced state it would be different; but Mr Ricardo has shewn that, in all cases, commodities vary in value conformably to this principle. It is of no consequence among how many hands the labour of making a pair of stockings is divided. If the aggregate quantity is on the whole either diminished or increased, the exchangeable value of the stockings will fall or rise in proportion.
From what we have already stated, a most important consequence, first pointed out by Mr Ricardo, necessarily
