as a necessary consequence, that in this rude state of things the only circumstance which could regulate the exchangeable value of commodities was the quantity of labour which the preparation of them required; some allowance being probably made for superior hardship incurred, or skill exerted. This incontrovertible principle, accordingly, Mr. Smith turns in various strong lights; after which, he makes an abrupt conclusion, with which it is not easy to trace its connexion, that the value of a commodity to those who possess it, and want to exchange it, is precisely equal to the quantity of labour which it can enable them to command. It is difficult to reconcile this passage, considered at least in its application to the more advanced periods of society, with the analysis which Mr. Smith has given in a different chapter, of the component parts of the price of commodities." "As soon as stock has accumulated in the hands of particular persons, some of them will, naturally, employ it in setting to work industrious. people, whom they will supply with materials and subsistence, in order to make a profit by the sale of their work, or by what their labour adds to the value of the materials. In exchanging the complete manufacture either for money, for labour, or for other goods, over and above what may be sufficient to pay the price of the materials and the wages of the workmen, something must be given for the profits of the undertaker of the work, who hazards his stock in this adventure. The value which the workmen add to the materials, therefore, resolves itself in this case into two parts, of which the one pays their wages, the other the profits of their employer upon the whole stock of materials and wages which he advanced.*"

"With these principles in his view, it is not a little curious

* The Wealth of Nations, by Adam Smith, book 1, ch. vi.

that Mr. Smith should have satisfied his mind with the reasoning just quoted from another part of his work."

"Another metaphysical argument afterwards offered by Mr. Smith in proof of the same proposition, is, that 'as a measure of quantity, such as the natural foot, &c., which is continually varying in its own extent, never can be an accurate measure; so a commodity, like silver or gold, which is continually varying in its own value, can never be an accurate measure of value. But equal quantities of labour must at all times be of equal value to the labourer, and so on.'* The part of this reasoning to which I would more particularly direct your attention is, that in which it is said, that equal quantities of labour must at all times be of equal value to the labourer. What idea are we here to annex to the term value? In the previous chapter, we are told, that this word has two different meanings; sometimes expressing the utility of a commodity, and sometimes the power of purchasing other goods. The first of these is called value in use, the other value in exchange. The distinction is illustrated by the example of water and a diamond. The same distinction, illustrated by the very same examples, occurs in Mr. Harris's work on Coins, and in the treatise by Mr. Law, entitled, Money and Trade Considered.' I have some doubts, however, with respect to its accuracy; for what is value in use but a circuitous expression for utility? and what possible advantage can arise from substituting the former phrase for the latter? On the other hand, is not the idea of value in exchange sufficiently conveyed by the word value, which in speculations of this sort is seldom or never employed as synonymous with intrinsic utility, and which in itself seems to involve the very nature of the comparison? Both of

* The Wealth of Nations, by Adam Smith, book 1, ch. v.

these, and similar phrases, have been employed in the present discussion. The principal advantage of the common mode of speaking over that employed by Mr. Smith, is, that the latter, after distinguishing the two kinds of value, often makes use of the word without any limiting epithet, and thereby not only puzzles his readers but imposes on himself. Thus, when it is said, that a commodity like silver, which is continually varying in its own value, can never be an accurate measure, the word value plainly means exchangeable value. But this word as plainly alters its meaning in the next sentence, when it is remarked, that equal quantities of labour are of equal value to the labourer. Here the word value cannot mean exchangeable value, and it is expressly supposed that the exchangeable value varies. We must, therefore, conclude, according to Mr. Smith's definition, that it was value in use which he meant; though I need hardly observe, it is an awkward mode of expressing the simple proposition, that equal quantities of labour will always be of equal value to the labourer. It is in this last sense, however, alone that the proposition can be interpreted."

Treating again on Adam Smith's asserted theory of the cause of value, he writes thus: "He (Adam Smith) seems at the same time to have considered the theory as mathematically accurate in itself, but as unsusceptible of a practical application. If the remarks which I made yesterday be just, the theory, even considered abstractedly, proceeds on an erroneous principle. In some of the practical rules which Mr. Smith afterwards suggests, I agree with him very nearly, under proper limitations. But I am unable to conceive their connection with the premises from which he deduces them. I shall, therefore, endeavour to establish the justness

* Dugald Stewart's Political Economy, part 1, book 2, pp. 353, 354, 355, 356.

of my opinions on this point; in doing which, I may, perhaps, be able to point out some of the circumstances which have misled the speculations of this very profound writer."

The reader will see, by the sentence just quoted, the great amount of imperception and of confusion of ideas, which prevailed with both these writers. Dugald Stewart says, firstly, that the simple abstract principle enunciated by Adam Smith is an erroneous principle. He then proceeds to say that in some of the practical rules afterwards suggested by Adam Smith, he agrees but only under certain limitations. Next, he declares also, that he is not able to conceive the connection between the rules and the premises from which Adam Smith has professed to derive the rules. The worst part of the sentence, however, is that by which Dugald Stewart has declared, both on the part of himself and Adam Smith, that a principle and a theory being true, may, nevertheless, be unsusceptible of practical application. Throughout the extensive field of philosophical disquisition, nothing more unwarrantable or more unworthy the name of philosophy is to be found. I desire to point attention to another weak and most deluding feature. It is that by which Dugald Stewart has attempted to take the fundamental principle of Political Economy, namely, the cause of value, out of the department of physics, and to place it in the region of metaphysics. The writer is to be absolved from the entertainment of any intention of wilfully involving his subject in darkness, and of so screening and hiding the want of knowledge as to prevent its detection by the general body of common readers and superficial reasoners. Nevertheless, the mystifying and endarkening course here resorted to, is a lamentable fact. The intelligent reader will discern that all this arises by reason of a desire being indulged, and an attempt being made, to write on the great subject, when a knowledge of the simple elementary

principle or truth from which all right courses are derived, has not been acquired. In the mass of ideas and reasonings just presented, three distinct agencies and operations are mingled confusedly together. Firstly: there is labour, the instrument by which all the material things of the world are produced. Secondly: there is cost of production, or that matter of value which is consumed in the process of producing or procuring all materials and commodities. Thirdly: the exchangeable value of materials and commodities. All these are mingled together in one chaotic mass. The writers not being able to reduce their chaos into order, because they have not at command principle and law, go over themselves, and lead their readers over, into the region of mystification or darkness. The physical department is deserted; the metaphysical department is professed to be entered; but the profession is nugatory, for the department is entered without any light being derived, which might serve to illumine their path or to guide their inquiries. Hence darkness and blindness prevail over the department and the actors.

This unnatural mingling together of the physical and metaphysical branches of the subject did, in all probability, occur with Dugald Stewart, on account of the interest with which he pursued his investigations into the philosophy of the human mind. In passages of his work before quoted, he has advanced the noble conclusion, that all attempts to establish the truth, rules, and salutary courses of a just Political Economy must be confused and futile, unless we apply ourselves, in the first place, honestly and correctly, to a knowledge of man's spiritual and moral nature, his motives or springs of action; declaring that those laws of matter which are especially comprehended within the province of Social and Political Economy, will not be fulfilled "without the vivifying spirit of an enlightened people." That is, because