capable of ministering in some mode to the gratification of man, but those qualities, although necessary to value, are not causes of it, because nothing is more useful than air, which has none, except when labour has been expended in obtaining it. Such is the case with all commodities, or things, all of which derive their value from the labour which has been applied to their production at the time and place at which they are required. Labour is thus the sole cause of value.

We arrive now at the following conclusions.—

L. That the cause of the value attached to commodities, or things, is the necessity for giving labur in exchange for them.

II. That the value of every commodity or thing, must be estimated in some other commodity or thing, and thus that the nature of value is exchangeable.

III. That the producer desires to diminish the quantity of labour required for their production, and to facilitate their acquisition. IV. That with this view he appropriates a portion of his labour to the construction of machines to aid him in production.

V. That those machines constitute his capital.

VI. That capital tends to improve the quality of labour, and to lessen the quantity required for the production of any commodity. VII. That the value of commodities, at the time of production, is measured by the quantity and quality of labour required to produce them.

VIII. That the value of an article cannot exceed that of the labour required to reproduce it.

IX. That every improvement in the mode of producing any commodity tends to lessen the value, in labour, of commodities of the same description previously existing.

X. That the accumulated products of labour, constituting capital, have, therefore, a constant tendency to fall in their labour value.

XI. That this fall of value is accompanied by a decrease in the proportion of the product of labour that can be claimed in return for permitting their use.

XII. That there is a constant tendency to increase in the value of labour when compared with capital, and to an increase in the proportion of product retained by the labourer.

CHAPTER II.

MALTHUS, MCULLOCH, SENIOR, and others, ON VALUE.*

In thus attributing value exclusively to labour, we agree with several of the principal writers of our time, among whom are Mr. Malthus,† Colonel Torrens, and Mr. M'Culloch. Those writers, however, attribute the power to demand rent for the use of land to the fact that the superior soils are limited in quantity, and that, as population increases, there arises a necessity for extending cultivation over land yielding a diminished return, attended with a constant diminution in the wages of labour and the profits of capital. In consequence of this necessity the person who has appropriated to himself a superior soil is supposed to be enabled to demand as rent the whole amount of the difference between the product of labour applied thereon, and that which could be obtained by the same quantity of labour applied to the worst land required to be cultivated to supply the quantity of food necessary for the population. If the former will yield two hundred bushels, and the latter one hundred bushels, he can claim the difference, or one hundred bushels, as rent.

* We give in this chapter a brief view of the opinions of these writers, reserving for a future portion of this work, the examination of their arguments in support of their doctrines, where the fatter differ from our own.

+Wealth consists of the material things necessary, useful, or agreeable to 'man, which have required some portion of human effort to appropriate or pro'duce.'-Malthus, Definitions, p. 34.

'Two things are essential to wealth: the possession of utility,—and the re'quiring some portion of voluntary exertion or labour.' Production of Wealth, p. 1. § 'Labour is the only source of Wealth."-Principles, p. 66.

II'Suppose now, that such a price is offered as will pay the expense of producing *corn on soils which, in return for the same expenditure that would have produced 100 quarters on lands of the first quality, will only yield 90 quarters; it is plain 'it will then be indifferent to a farmer whether he pays a rent of 10 quarters for 'the first quality of land, on farms the second quality, which is unappropriated 'and open to him, without paying rent. If the population went on increasing, 'lands which would yield only 80, 70, 60, 50, &c., quarters in return for the same 'expenditure that had raised 100 quarters on the best lands, might be successively 'brought into cultivation. And when recourse has been had to these inferior lands, 'the corn rent of those that are superior would plainly be equal to the difference "between the quantity of produce obtained from them, and the quantity obtained 'from the worst land under tillage.—M'Culloch,. Principles, p. 432.

Rent is the sign of value. Land which pays it has value, and that which can command no rent has no value. If this "necessity" be the cause of value in land, our assertion that labour is the sole cause cannot be correct, nor is Mr. M'Culloch consistent in saying that "labour is the only source of wealth," while he attributes the power to demand rent to another cause.

Mr. Senior attributes value to all articles that are, I. Useful. II. Susceptible of appropriation, and of course transferable: and III. Limited in supply.*

Many things are useful that have, however, no exchangeable value, as we have shown to be the case in regard to air. Coal in the mine has all the qualities that it possesses when it is brought into use in New York or Philadelphia, yet acres of land containing thousands of tons may be purchased for fifty cents. It requires the application of labour to give it value. It is perfectly susceptible of being appropriated or transferred, yet it is valueless. No commodity or thing can have value unless it is susceptible of being made to contribute to the comfort, convenience, or pleasure of man, nor unless susceptible of appropriation, but those qualities, though thus essential to, are not causes of, value. With great reason, therefore, Mr. Senior rests chiefly on limitation of supply as the cause. Of this he says:

The next constituent of value is limitation in supply. It may appear inaccurate to apply this expression to any class of things, as it, in fact, belongs to all; there being nothing which, strictly 'speaking, is unlimited in supply. But for the purposes of Political Economy, every thing may be considered as unlimited in supply, in its existing state, of which a man may have as much as he pleases for the mere trouble of taking it into his possession. Thus the 'water of the open sea is, in our use of the term, unlimited in sup'ply; any man who chooses to go for it may have as much of it as he pleases: that portion of it which has been brought to London is limited in supply, and is to be obtained not merely by going to the • Under that term [wealth] we comprehend all those things, and those things only, which are transferable, are limited in supply, and are directly or indirectly productive of pleasure or preventive of pain; or, to use an equivalent expression, which are susceptible of exchange; (using the word exchange to denote hiring as well as absolute purchase ;) or, to use a third equivalent expression, which have value; a word which, in a subsequent portion of this Treatise, we shall ex* plain at some length, merely premising at present that we use it in its popular sense, as denoting the capacity of being given and received in exchange.'t + Outline of the Science of Political Economy, p. 131.

' reservoir and taking possession of it, but by giving for it an equiva'lent. The copper ores which Sir John Franklin discovered on the shores of the Arctic Sea, may be considered, in their existing 'state, as unlimited in supply; any man may have as much of them ' as he has strength and patience to extract. The extracted portion 'would be limited in supply, and therefore susceptible of value. Many things are unlimited in supply for some purposes, and limit'ed for others. The water in a river is in general more than suf'ficient for all the domestic purposes for which it can be required; 'nobody pays, therefore, for permission to take a bucketfull; but it ' is seldom sufficient for all those who may wish to turn their mills with it; they pay, therefore, for that privilege.

'The number of coats and waistcoats in England is perhaps about equal. The supply of each may be increased by human exertion ' to an indefinite extent; but it requires about three times as much ' exertion to produce a coat as to produce a waistcoat. As the obsta'cle, therefore, which limits the supply of coats, is three times as forcible as that which limits the supply of waistcoats, we consider 'coats three times more limited in supply than waistcoats, though the existing supply of each may perhaps be equal.

'Of the three conditions of value, utility, transferableness, and limitation in supply, the last is by far the most important.'

Production consists in altering in its form, or in its place, matter already existing. The commodities referred to by Mr. Senior require to be produced in the form in which, and at the place at which, they are required. There is no "obstacle" limiting the supply but the want of the application of labour, which can alone give them value.

Water is unlimited in quantity; but when produced at the time and place required a price is paid for it. The man at whose feet runs a stream of water, might, with a very small effort, raise enough to quench his thirst. The labour bestowed being very small, the exchangeable value of the product would be very trifling, yet he would not employ himself during a whole day, in performing the same operation for others, unless each person served would pay his share of the value of a day's labour. The quantity required to obtain a single drink is so small that it can hardly be estimated, yet when it is necessary to perform the same operation as many times as are required for the supply of a family, it is found better to bestow, at once, a large quantity of it, in sinking a well, and placing a pump

therein, for the purpose of lessening the daily demand for labour. Every person in London or Philadelphia, may have as much water as he thinks fit to appropriate, from the Thames, or the Delaware, yet it is deemed much more advantageous to pay a certain sum for the use of water from reservoirs, whence it is carried by pipes to the spot at which it is wanted.

Mr. Senior says that the man who wishes a bucketfull is not required to pay for it, while he who desires it to turn his mill must do so. The man who requires a bucketfull in London, or New York, must pay for it, because labour has been applied to produce it at the place required. He who wants it to turn a mill, pays for it on the same principle. He wants a given power at a given place. The water-power of the Falls of Niagara has been running to waste for centuries, as are now thousands and tens of thousands of others, but they will not answer his purpose. He wishes power at a place that possesses those advantages which arise out of the application of labour to the making of roads and building of towns, and the rent he pays is for those advantages. The Falls of the Merrimack, or of the Clyde, would be as valueless as those of the Mississippi or Missouri, had not labour been thus applied.

Iron exists throughout the world in unlimited quantity. In the single state of Pennsylvania there is sufficient to supply the demand of the world for thousands of years, and thousands of acres filled with it have been sold for the taxes of one, two, or three cents per acre. The person who appropriates it is paid for his labour in so doing, and for changing it in form or in place, precisely as the man is paid who employs himself in making coats or waistcoats. The quantity of oil, in its existing state, is unlimited. Any person may fit out vessels for the whaling trade, and so long as it yields a higher return than other employments the number of vessels will continue to increase, until it shall yield only the usual wages and profits of trade.

Ice, in its existing state, is unlimited in supply, yet it is a luxury for which, at certain seasons and in certain places, a high price is paid. It is paid, however, not for the ice, but for the labour employed in collecting it: for the rent of the house in which it is kept: for the time of the person who brings it round to him, and wages to the person who superintends the operation. A ton of coal sells, in some of our cities, for six,