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united, as to be made to serve the good purpose and end. In accordance with his primary error, Dr. Smith was under the necessity of arguing that man is confined within that narrow range of motive which is assigned to the lower order of the animal creation. Animal instinct, animal propensity, the love of gratifying animal desires, would be made by him to be the right motive, or the only motive that is to be expected of man. The only superiority that can be claimed for man under this system is that of greater ingenuity, a larger increase and display of skill and of knowledge emanating from the intellectual faculty of his constitution.
Dr. Smith has treated of this great branch of the subject in the following manner: "The Division of Labour, from which so many advantages are derived, is not originally the effect of any human wisdom which foresees and intends that general opulence to which it gives occasion. It is the necessary, though very slow and gradual, consequence of a certain propensity in human nature which has in view no such extensive utility: the propensity to truck, barter, and exchange one thing for another.
"Whether this propensity be one of those original principles in human nature of which no further account can be given, or whether, as seems more probable, it be the necessary consequence of the faculties of reason and speech, it belongs not to our present subject to inquire. It is common to all men, and to be found in no other race of animals, which seem to know neither this nor any other species of contracts."
Such is the manner in which Dr. Smith has treated the highest branch of the subject. His view rises no higher than the assignment to man of a position a little above the cleverest or most ingenious animal.
* The Wealth of Nations, by Adam Smith, book 1, ch. ii.
The absence of the first true and comprehensive principle from Dr. Smith's evidence and reasoning, or that principle without which it is not possible to give an elucidation of the subject, is soon discoverable when we have to examine his course of reasoning on the great element which lies at the root of the whole subject, I mean value. The first demonstration which a scientific inquirer and reasoner in the field of social and political economy has to work, is, the cause of value-value connected with and arising from the exchange of commodities, by which there is involved the constitution of that which we know by the common term capital, or wealth.
In the fifth chapter of "The Wealth of Nations," Dr. Smith has written on the subject of "value." Having discerned that all commodities are derived from the natural fund by means of the labour of man, and by these means alone, Dr. Smith proceeded to adopt the assumption that value — value in exchange is determined by the quantity of labour that has been bestowed on the production of each commodity. The following passages will convey to the reader a sufficient insight into the confused and defective manner in which Dr. Smith has treated this important rudimentary element of social science.
"The value of any commodity, therefore, to the person who possesses it, and who means not to use or consume it himself, but to exchange it for other commodities, is equal to the quantity of labour which it enables him to purchase or command. Labour, therefore, is the real measure of the exchangeable value of all commodities." *
Again: "Labour was the first price, the original purchase money that was paid for all things. It was not by gold or by silver, but by labour, that all the wealth of the world was
* The Wealth of Nations, by Adam Smith, book 1, ch. v.
originally purchased; and its value, to those who possess it and who want to exchange it for some new productions, is precisely equal to the quantity of labour which it can enable them to purchase or command."*
Again in another page of the same chapter, the writer has admitted that the definition of value with which he commenced was not able to bear him up when put to the trial of social facts. Having entered, therefore, the region of confusion, he proceeded to depart from his first assumption and wrote as follows:
"But though labour be the real measure of the exchangeable value of all commodities, it is not that by which their value is commonly estimated. It is often difficult to ascertain the proportion between two different quantities of labour. The time spent on two different sorts of work will not always alone determine this proportion. The different degrees of hardship endured, and of ingenuity exercised, must likewise be taken into account."t
"Every commodity, besides, is more frequently exchanged for, and thereby compared with, other commodities than with labour. It is more natural, therefore, to estimate its exchangeable value by the quantity of some other commodity, than by that of the labour which it can purchase. The greater part of people, too, understand better what is meant by a quantity of a particular commodity, than by a quantity of labour. The one is a plain, palpable object; the other an abstract notion, which, though it can be made sufficiently intelligible, is not altogether so natural and obvious."
Advancing from one region of obscurity into another, the writer has next increased the complexity and perplexity, both
* The Wealth of Nations, by Adam Smith, book 1, ch. v.
of his subject and of his reasoning, by the introduction of the element of money; and having heaped together so much confused matter, as neither he himself nor his readers could possibly penetrate, so as to discern any thing clearly, he has again settled down on his original assumption, and has stated it thus: "Labour, therefore, never varying in its own value, is alone the ultimate and real standard by which the value of all commodities can at all times and places be estimated and compared. It is their real price; money is their nominal price only.”*
I have now extracted sufficient matter from this chapter of Dr. Smith's on Value to prove how little knowledge the writer had acquired of that great fundamental proposition, namely, the Cause of Value, on which the whole science of Social and Political Economy rests. In this chapter the faculty of labour and its operation,-the cost of production,—-value in exchange, and the use of money for assisting exchanges, are thrown together in most perplexing disorder; neither of the subjects being treated with soundness, comprehensiveness, or truth. The confusion and deficiency are the more remarkable because the writer has, in his seventh chapter, made some very important advancement towards the truth of this subject. Upon this I will proceed to adduce some evidence, Under the head of "The natural and market price of commodities," the author of the "Wealth of Nations" has written as follows:-"The market price of every particular commodity is regulated by the proportion between the quantity which is actually brought to market, and the demand of those who are willing to pay the natural price of the commodity, or the whole value of the rent, labour, and profit, which must be paid in order to bring it thither. "†
* The Wealth of Nations, by Adam Smith, book 1, ch. v. † Ibid. book 1, ch. vii.
Again: "When the quantity brought to market exceeds the effectual demand, it cannot be all sold to those who are willing to pay the whole value of the rent, wages, and profit, which must be paid in order to bring it thither. Some part must be sold to those who are willing to pay less, and the low price which they give for it must reduce the price of the whole."
By these, and other passages of the seventh chapter, we are led to perceive how largely the writer altered and qualified the reasoning which he had employed in his fifth chapter. We perceive that he made some important advances towards an adjustment of the two great courses supply and demandtogether with an elucidation of the great rule of proportion by which these two great social courses are so adjusted as to insure the result-the great result-Value.
As I shall, on a future occasion, have to lay down a demonstration of the Cause of Value, I will not now treat, at much length, of the false and contradictory elements here advanced by Adam Smith. I desire, however, to call the attention of the reader to one point. The writer of the "Wealth of Nations" has declared thus: "Labour was the first price, the original purchase-money, that was paid for all things. It was not by gold or by silver, but by labour, that all the wealth of the world was originally purchased."
The writer has here committed the enormous error of mixing up, in one confused mass, Labour, the instrument by which all commodities are procured, and Value, - value in exchange, which can come only from the social action of man with man. He has declared that labour was the first price, the original purchase-money paid for all things. Thus he has assumed that the Creator, by whom all things are
* The Wealth of Nations, by Adam Smith, book 1, ch. vii.