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ply, it would show that they must be restored to their universal empire, both in reference to the prices of commodities, and the dependence of the progress of wealth on the due proportion maintained between them. If the cost of a commodity be considered as composed exclusively of the actual advances of the capital required for its production, which seems to be the most natural and correct mode of viewing it,[1] then it is obvious, that as both the prices and values of commodities are proportioned to these advances, with the addition of profits very variable in their amount, neither of them can be determined by these advances alone, or by the costs of production so defined. We must therefore have recourse to demand and supply. And on the other hand, if profits be included in the costs of production, then, as it follows, from the constancy of the value of labour, that ordinary profits are determined by the ordinary demand compared with the ordinary supply of the products of the same quantity of labour, the certain conclusion must be, that
- ↑ This is the view taken of it by Colonel Torrens in his Production of Wealth, which I think the just one; because it makes the proper distinction between cost and value, on which the great stimulus to production depends. But he has most unnecessarily and incorrectly given the same interpretation to natural price, which always includes profits.
