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qusly, if the quantity of labour spent in producing all should double simultaneously?

X. It will, Phædrus. Phæd. And yet nothing will exchange for more or less than before.

X. True: but the rise is not ideal for all that, but will affect every body. A pound of wheat, which previously bought three pounds of salt, will still buy three pounds: but then the salt-maker and the wheatmaker will have only one pound of those articles where before he had two. However the difference between the two cases cannot fully be understood, without a previous examination of certain distinctions which I will make the subject of our next dialogue; and the rather, because apart from our present question, at every step we should else be embarrassed as all others have been by the perplexity attending these distinctions. Meantime as an answer to your argument the following consideration will be quite sufficient.

The case which your argument re-
spects is that in which wages are
supposed to rise? Why? In conse-
quence of a real rise in corn or some-
thing else. As a means of meeting
this rise, wages rise: but the in-
creased value of wages is only a
means to an end, and the laborer
cares about the rise only in that
light. The end is-to give him
the same quantity of corn suppose.
That end attained, he cares nothing
about the means by which it is at-
tained. Now
your ideal rise of
wages does not attain this end. The
corn has really risen: this is the first
step. In consequence of this an ideal
rise follows in all things, which
evades the absurdities of a real rise-
and evades the Ricardian doctrine of
profits: but then only by also evading
any real rise in wages, the necessity
of which (in order to meet the real
rise in corn) first led to the whole
movement of price.-But this you
will more clearly see after our next


On the Use and Abuse of two celebrated Distinctions in the Theory of Value. X. Now, gentlemen, I come to a to ride through the steeple-chase you question which on a double account will lead him; his be the honor of is interesting: first, because it is in- the day-and his the labor. dispensable to the fluency of our future progress that this question should be once for all decided: secondly, because it furnishes an experimentum crucis for distinguishing a true knowledge of Mr. Ricardo's theory from a spurious or half knowledge. Many a man will accompany Mr. Ricardo thus far, and will keep his seat pretty well until he comes to the point which we have now reached at which point scarcely one in a thousand will escape being unhorsed.

Phaed. Which one most assuredly will not be myself. For I have a natural alacrity in losing my seat, and gravitate so determinately to the ground, that (like a Roman of old) I ride without stirrups-by way of holding myself in constant readiness for projection: upon the least hint, anticipating my horse's wishes on that point and throwing myself off as fast as possible; for what's the use of taking the negative side in a dispute where the horse takes the affirmative? So I leave it to Philebus

X. But that cannot be: Philebus is bound in duty to be dismounted, for the sake of keeping Mr. Malthus with many others in countenance. For at this point, Phædrus, more than at any other almost, there is a sad confusion of lords and gentlemen that I could name thrown out of the saddle pell-mell upon their mother earth.

Phil. So they among themselves in plea

sant vein
Stood scoffing.
I suppose I

addmay Heighten'd in their thoughts beyond All doubt of victory.

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it against Mr. Ricardo, yet originally it belongs to Adam Smith.

X. Not so, Philebus: a distinction between real and nominal value was made by Adam Smith, but not altogether the distinction of Mr. Malthus. It is true that Mr. Malthus tells us (Polit. Econ. p. 63), that the distinction is " exactly the same." But in this he is inaccurate: for neither is it exactly the same; nor, if it had been, could Mr. Malthus have urged it in his Political Economy with the same consistency as its original author. This you will see hereafter. But no matter: how do you understand the distinction?

Phil. "I continue to think" with Mr. Malthus" that the most proper definition of real value in exchange, in contradistinction to nominal value in exchange, is the power of commanding the necessaries and conveniences of life, including labour, as distinguished from the power of commanding the precious metals."

X. You think, for instance, that if the wages of a laborer should in England be at the rate of five shillings a-day and in France of no more than one shilling a-day, it could not therefore be inferred that wages were at a high real value in England or a low real value in France: until we know how much food, &c. could be had for the five shillings in England and how much in France for the one shilling, all that we could fairly assert-would be, that wages were at a high nominal value in England and at a low nominal value in France: but the moment it should be ascertained that the English wages would procure twice as much comfort as the French, or the French twice as much as the English, we might then peremptorily affirm that wages were at a high real value in England on the first supposition or in France on the second:-this is what you think?

Phil. It is, and very fairly stated. I think this, in common with Mr. Malthus; and can hold out but little hope that I shall ever cease to think it.

X. Why then, know this,

Thou think'st amiss: And, to think right, thou must think o'er again.

Phad. But is it possible that Mr. Ricardo can require me to abjure an

inference so reasonable as this? If so, I must frankly acknowledge that I am out of the saddle already.

X. Reasonable inference! So far from that, there is an end of all logic if such an inference be tolerated. That man may rest assured that his vocation in this world is not logical who feels disposed (after a few minutes' consideration) to question the following proposition; viz. That it is very possible for A continually to increase in value-in real value, observe-and yet to command a continually decreasing quantity of B: in short that A may acquire a thousand times higher value and yet exchange for ten thousand times less of B.

Phad. Why then "Chaos is come again!" Is this the unparadoxical Ricardo?

X. Yes, Phædrus: but lay not this unction to your old prejudices, which you must now prepare to part with for ever, that it is any spirit of wilful paradox which is now speaking: for get rid of Mr. Ricardo, if you can, but you will not therefore get rid of this paradox. On any other theory of value it will still continue to be an irresistible truth, though it is the Ricardian theory only which can consistently explain it. Here, by the way, is a specimen of paradox in the true and laudable sense-in that sense according to which Boyle entitled a book Hydrostatical Paradoxes: for, though it wears a prima facie appearance of falsehood, yet in the end you will be sensible that it is not only true-but true in that way and degree which will oblige him who denies it to maintain an absurdity. Again therefore I affirm that, when the laborer obtains a large quantity of corn for instance, it is so far from being any fair inference that wages are then at a high real value-that in all probability they are at a very low real value: and inversely I affirm that, when wages are at their very highest real value, the laborer will obtain the very smallest quantity of corn. Or, quitting wages altogether (because such an illustration would drive me into too much anticipation), I affirm universally of Y (that is, of any assignable thing whatsoever) that it shall grow more valuable ad infinitum, and yet by possibility ex

change for less and less ad infinitum of Z (i. e. of any other assignable thing).

Phad. Well, all I shall say is this: am I in a world where men stand on their heads or on their feet?-But there is some trick in all this: there is some snare. And now I consider, -what's the meaning of your saying "by possibility?" If the doctrine you would force upon me be a plain -broad-straightforward truth, why fetter it with such a suspicious restriction?

X. Think for a moment, Phædrus, what doctrine it is which I would force upon you: not, as you seem to suppose, that the quantity obtained by Y is in the inverse ratio of the value of Y: on the contrary, if that were so, it would still remain true that an irresistible inference might be drawn from the quantity purchased to the value of the thing purchasing, and vice-versâ, from the value of the thing purchasing to the quantity which it would purchase. There would still be a connexion between the two and the sole difference between my doctrine and the old doctrine would be this-that the connexion would be no longer direct (as by your doctrine) but inverse. This would be the difference, and the sole difference. But what is it that I assert? Why that there is no necessary connexion at all or of any kind between the quantity commanded and the value commanding. My object is to get rid of your inference, not to substitute any new inference of my own. I put therefore an extreme case. This case ought by your doctrine to be impossible. If therefore it be not impossible, your doctrine is upset. Simply as a possible case, it is sufficient to destroy you. But, if it were more than a possible case, it would destroy me. For if, instead of demonstrating the possibility of such a case, I had attempted to show that it were a universal and necessary case, I should again be introducing the notion of a connexion between the quantity obtained and the value obtaining, which it is the very purpose of my whole argument to exterminate. For my thesis is-that no such connexion subsists between the two as warrants any inference that the real value is great because the quan

tity it buys is great, or small because the quantity it buys is small; or, reciprocally, that because the real value is great or small-therefore the quantities bought shall be great or small. From, or to, the real value in these cases I contend that there is no more valid inference than from, or to, the nominal value with which it is contrasted.

Phil. Your thesis then, as I understand it, is this: that if A double its value, it will not command double the quantity of B. I have a barouche which is worth about 600 guineas at this moment. Now if I should keep this barouche unused in my coach-house for five years, and at the end of this term it should happen from any cause that carriages had doubled in value-my understanding would lead me to expect double the quantity of any commodity for which I might then exchange it, whether that were money, sugar, besoms, or any thing whatsoever. But you tell me-no. And vice versâ, if I found that my barouche at the end of five years obtained for me double the quantity of sugar, or besoms, or political economists, which it would now obtain-I should think myself warranted in drawing an inference that carriages had doubled their value. But you tell me-no; "Non valet consequentia."

X. You are in the right, Phædrus: I do tell you so. But you do not express my thesis quite accurately, which is that if A double its value, it will not therefore command double the former quantity of B. It may do so: and it may also command five hundred times more, or five hundred times less.

Phæd. Oh! tempora, oh mores! Here is my friend X. that in any other times would have been a man of incorruptible virtue; and yet, in our unprincipled age, he is content to barter the interests of truth and the


Imajesty of plain-dealing" for a brilliant paradox or (shall I say?) for the glory of being reputed an accomplished disputant.

X. But, Phædrus, there could be little brilliancy in a paradox which in the way you understand it will be nothing better than a bold defiance of common sense. In fact, I should be ashamed to give the air of a para

dox to so evident a truth as that which I am now urging, if I did not continually remind myself that-evident as it may appear-it yet escaped Adam Smith. This consideration, and the spectacle of so many writers since his day thrown out and at a fault precisely at this point of the chace, make it prudent to present it in as startling a shape as possible; in order that, the attention being thoroughly roused, the final assent may not be languid or easily forgotten. Suffer me therefore, Phædrus, in a Socratic way, to extort an assent from your own arguments-allow me to drive you into an absurdity.

Phad. With all my heart: if our father Adam is wrong, I am sure it would be presumptuous in me to be right; so drive me as fast as possible.

simply by doubling in value, B shall command a double quantity of A,it follows inevitably, Phædrus, that besoms-having doubled their value in five years-will at the end of that time command a double quantity of barouches. The supposition is that six hundred thousand at present command one barouche: in five years therefore, six hundred thousand will command two barouches ? Phad. They will.

X. Yet at the very same time, it has already appeared from your argument that twelve hundred thousand will command only one barouche: i. e. a barouche will at one and the same time be worth twelve hundred thousand besoms and worth only one-fourth part of that quantity. Is this an absurdity, Phædrus?

Phæd. I must admit that it is.

X. And therefore the argument from which it flows, I presume, is false.

Phad. It is scavenger of bad logic! I confess that it is.

X. You say that A, by doubling its own value, shall command a double quantity of B. Where, by A, you do not mean some one thing in particular, but generally any assignable thing whatever. Now B is some Phil. You confess? So do not I. assignable thing. Whatever there- You die "soft," Phædrus: give me fore is true of A will be true of B.? the cudgels, and I'll die " game at Phæd. It will. least. The flaw in your argument, X. It will be true therefore of B-X. is this: you summoned Phædrus That, by doubling it's own value, it will command a double quantity of


Phæd. I cannot deny it.

X. Let A be your carriage; and let B stand for six hundred thousands of besoms, which suppose to express the value of your carriage in that article at this present moment. Five years hence, no matter why, carriages have doubled in value: on which supposition you affirm that in exchange for your barouche you will be entitled to receive no less than twelve hundred thousands of besoms. Phæd. I do: and a precious bargain I shall have of it; like Moses with his gross of shagreen spectacles. But sweep on, if you please; brush me into absurdity.

X. I will. Because barouches have altered in value, that is no reason why besoms should not have altered?

Phæd. Certainly no reason in the world.

X. Let them have altered: for instance, at the end of the five years, let them have been doubled in value. Now because your assertion is-this,


to invert his proposition, and then you extorted an absurdity from this inversion. But this absurdity_follows only from the particular form of expression into which you threw the original proposition. I will express the same proposition in other terms, unexceptionable terms, which shall evade the absurdity. Observe. A, and B, are at this time equal in value: That is, they now exchange quantity for quantity. Or, if you prefer your own case, I say that one barouche exchanges for six hundred thousand besoms. I choose however to express this proposition thus: A (one barouche) and B (six hundred thousand besoms) are severally equal in value to C. When therefore A doubles its value, I say that it shall command a double quantity of C. Now mark how I will express the inverted case. When B doubles its value, I say that it shall command a double quantity of C. Now these two cases are very reconcileable with each other. A may command a double quantity of Cat the same time that B commands a double quantity of C without involv

ng any absurdity at all. And, if so, the disputed doctrine is established —that a doubled value implies a doubled command of quantity; and reciprocally that from a doubled command of quantity we may infer a doubled value.

X. A and B, you say, may simultaneously command a double quantity of C in consequence of doubling their value; and this they may do without absurdity. But how shall I know that, until I know what you cloak under the symbol of C? For if the same thing shall have happened to C, which my argument assumes to have happened to B (viz. that its value has altered), then the same demonstration will hold and the very same absurdity will follow any attempt to infer the quantity from the value or the value from the quantity. Phil. Yes, but I have provided against that for by C I mean any assignable thing which has not altered its own value. I assume C to be stationary in value.

X. In that case, Philebus, it is undoubtedly true that no absurdity follows from the inversion of the proposition as it is expressed by you. But then the short answer, which I return, is this: your thesis avoids the absurdity by avoiding the entire question in dispute. Your thesis is not only not the same as that which we are now discussing; not only different in essence from the thesis which is now disputed; but moreover it affirms only what never was disputed by any man. No man has ever denied that A by doubling its own value will command


double quantity of all things which have been stationary in value. Of things in that predicament it is self-evident that A will command a double quantity. But the question is whether universally, from doubling its value, A will command a double quantity; and inversely whether universally, from the command of a double quantity it is lawful to infer a double value. This is asserted by Adam Smith, and is essential to his distinction of nominal and real value: this is peremptorily denied by

us. We offer to produce cases in which from double value it shall not be lawful to infer double quantity. We offer to produce cases in which from double quantity it shall not be lawful to infer double value. And thence we argue that until the value is discovered in some other way, it will be impossible to discover whether it be high or low from any consideration of the quantity commanded: and vice versa of the quantity commanded-that, until known in some other way, it shall never be known from any consideration of the value commanding. This is what we say now your "C" contradicts the conditions: " until the value is discovered in some other way, it shall never be learned from the quantity commanded." But in your "C". the value is already discovered; for you assume it: you postulate that C is stationary in value: and hence it is easy indeed to infer that because A commands double quantity of "C".. it shall therefore be of double value: but this inference, is not obtained from the single consideration of double quantity-but from that combined with the assumption of unaltered value in C, without which assumption you shall never obtain that inference.

Phæd. The matter is clear beyond what I require: yet, X, for the gatisfaction of my "game" friend Philebus, give us a proof or two ex abundanti by applying what you have said to cases in Adam Smith or others.

X. In general it is clear that, if the value of A increases in a duplicate ratio, yet if the value of Bincreases in a triplicate ratio,—so far from commanding a greater quantity of B, A shall command a smaller quantity: and if A continually goes on squaring its former value, yet if B continually goes on cubing its former value,-then, though A will continually augment in value, yet the quantity which it will command of B shall be continually less, until at length it shall become practically equal to nothing.* Hence therefore I deduce

1. That when I am told by Adam

* The reader may imagine that there is one exception to this case, viz. if the values of A and B were assumed at starting to be=1: because in that case the squares, cubes, and all other powers alike, would be = 1; and thus, under any apparent alteration, the real relations of A and B would always remain the same. But this is an impossible and unmeaning case in Political Economy, as might easily be shown.

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