table deserts, and helped it to overcome the obstacles which nature and men opposed to its progress.

Thus the sources of the circulation of the produce of labour may be traced in the passion for enjoyment, in the efforts of commerce, and in the genius of the arts. To their combined action commerce owes its impulse, its progress, and its success; and it will be seen in the following chapters, that it cannot pass the point which it has reached, unless these sources be further developed and improved.

CHAP. II.

Of the Value of the Produce of Labour.

WHEN men first wished to exchange the produce of their labour, either directly or indirectly, by means of merchants, they must have experienced a considerable difficulty in fixing its reciprocal value; and it is not easy to conceive how the difficulty was conquered. Perhaps, as they exchanged only objects of no value to the exchanger, they did not attach much importance to the matter, and every one was satisfied with receiving an useful commodity for an object of no value to himself.

But when the division of labour, says Adam Smith, had converted every man as it were into a merchant, and society itself grew to be what is properly called a commercial society, no one was inclined to part

* Wealth of Nations, vol. i. book i. chap. 4.

with his produce but for an equivalent. To fix this equivalent, it was necessary to know the value of what was given and what was received; and it must be confessed, that the difficulty of hitting upon the means of doing so must have been very considerable.

Dr. Quesnay pretends, that "the wants of the consumers, and their means of supplying them, originally determine the price of productions at their first sale."*

No doubt, this was the way resorted to at first in every exchange. It may reasonably be supposed, that every one who carried the surplus of his produce to market, must have ascertained its value from the number or quantity of other commodities he was offered in exchange.

But this must have ceased, when produce was no longer materially measured one by the other; when the equivalent was a generally preferred produce; and particularly when credit rendered even the actual conveyance of this preferred produce unnecessary.

Mankind must then have felt the want of a standard to judge of the relative value of any production compared to the preferred produce, and to ascertain how far the exchange provided every producer with a just equivalent. This standard of value has been the object of the inquiries of all who have written on subjects connected with political economy: "but," as has been justly observed by the ingenious Galiani, have successfully discovered an immutable measure of time, space, and motion, the three great measures of

* Physiocratic, Obs. 6.

men

every thing but the price of things, that is to say their proportion with our wants, is yet without any fixed measure.

*

Most of the French, English, and Italian writers are of opinion, that things have no other value than what is fixed by the demand for them, and their abundance or scarcity.

"Among a trading people," says the celebrated Genovesi, "the words price, worth, value, are relative and not absolute expressions.-Things have no price or value but relatively to man; wherever there are no men, there are no values. But man assigns no value to things, but as he wants them, consequently, the value of things is only proportioned to their power of supplying our wants."

"The sole capability of being exchanged, combined with the greater or smaller natural abundance of things, and with a more or less ardent desire to be possessed of thein," says another Italian author, "forms the basis of what mankind denominate value.”+

"The price of things," says Count Verri, “ is composed of two elements, their utility and their scarcity."§

"The value of things," says Condillac, "is grounded upon their utility, or, what is the same, upon the need in which we stand of them, or, what is again the same,

* Della Moneta.

+ Lezioni di Economia Civile.

+

‡ Osservazioni sopra il Prezzo legale della Monete di Pompeis Neri.

§ Meditazioni sulla Economia Politica.

upon the use which we can make of them.-The value of things increases therefore with their scarcity, and diminishes with their plenty."*

Other writers of great weight think, on the contrary, that things have a real intrinsic value independent of their being exchanged.

Sir William Petty was the first who started this opinion, and developed it in a clear and intelligible

manner.

:

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Suppose a man," says he, could, with his own hands, plant a certain scope of land with corn; that is, could dig or plow, harrow, reap, carry home, thresh, and winnow, so much as the husbandry of this land requires; and had withal seed wherewith to sow the same I say, that when this man has subducted his seed out of the proceeds of his harvest, and also what himself has both eaten and given to others in exchange for clothes and other natural necessaries, that the remainder of corn is the natural and true rent of the land for that year; and the medium of seven years, or rather of so many years as make up the cycle within which dearths and plenties make their revolution, does, give the ordinary rent of the land in corn.

"But a further though collateral question may be, how much money this corn or rent is worth? I answer, so much as the money which another single man can save within the same time, over and above his expence, if he employed himself wholly to produce and make it; viz. let another man go travel into a country where is silver; there dig it, refine it,

* Le Commerce et le Gouvernement, part i. chap. 1.

bring it to the same place where the other man planted his corn, coin it, &c., the same person, all the while of his working for silver, gathering also food for his necessary livelihood, and procuring himself covering, &c. I say the silver of the one must be esteemed of equal value with the corn of the other."*

Agreeably to this opinion, the value of things depends on the time consumed in producing them.

Mr. Harris has adopted the opinion of Sir William Petty in his Essay on Money and Coins: but he has not stated it in so clear and precise a manner.

"The values of land and labour," says this author, "do, as it were of themselves, mutually settle or adjust one another; and as all things or commodities are the products of those two, so their several values are naturally adjusted by them. But as in most productions labour has the greatest share, the value of labour is to be reckoned the chief standard that regulates the value of all commodities; and more especially as the value of land is, as it were, already allowed for in the value of labour itself."

Galiani advances on this subject an opinion apparently singular, but which comes very near that of Sir William Petty and Mr. Harris.

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"I think," says he, that the standard of all value is man himself, because, next to the elements, there is not any thing more necessary to man than man; it is on the numbers of men that the price of every thing depends. There is, it is true, an infinite distance from man to man; but if, by calculations, we succeed in

* Treatise of Taxes and Contributions, Ato. 1667. page 23,

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