It therefore concerns all who labour that they understand on what the value of their labour depends. It is not the value of a man's labour to himself which we have to consider here, but the value of it to others. A man may value • his own labour as he pleases, but if he wishes to exchange it, he will find that it is other persons who then determine its value : the real value is what he can get for it. This fact is well known to all who produce anything to sell, or offer their labour for hire. The value of anything to him who has not the thing, but wishes to have it, is not measured by the opinion of him who has it to sell. The price of purchase is a result which is compounded of the wants of the buyers and the quantity or supply of the thing which they desire to have. There is no formula which can accurately express the numerical value of this result; nor would a numerical result be invariable. It depends on the supply of the things which purchasers desire, and also on their necessary wants, taste, and caprice. The wants of the buyers, their real efficient demands, imply ability or means to buy with; and this is a varying element. Thus there are two varying elements of selling price, the demand and the supply. Prices vary least in those things which are the primary necessaries, when trade is free from all restrictions ; or they are at least not subject to the same variations of taste and caprice. One of the varying causes of price, opinion, is here pretty nearly constant ; and the risk of variation is mainly in the supply, which depends on seasons and other accidents. When the value of a thing depends on an opinion that is liable to change, the supply will be less certain on account of the uncertainty of opinion. No man can say with cer tainty what will be the value of anything at a future time ; but long experience has taught men the probable limits within which the selling prices of most articles of common use will vary, and a knowledge of these limits enables them to determine whether they can undertake to furnish the market with any given article so as to have a reasonable security for a profit. Profit is the condition without which things will not continue to be produced for sale. The cost that is expended upon, a thing does not determine its value, by which is meant its selling price, but the selling price determines whether the thing will continue to be produced. In the case of many new articles, the production of them is a pure risk, and dear-bought experience alone in many cases teaches a man that he has laboured much to no purpose—that he has some thing to sell, which nobody wishes to buy. Articles of ordinary consumption are regularly produced, because the efficient demand combined with the quantity in the market secures a remunerating price If other articles take the place of those which have been in ordinary use, the old articles cease to be made. If the same articles, owing to improved processes, are produced at less cost, the selling price is diminished, not because the labour be stowed on them is less, but because the supply of such articles is more abundant whenever there is free competition. That the labour expended on an article does not determine its exchangeable value is clear from the case supposed, for if there was uo competition among producers, the pur chasers would not get the thing a bit the cheaper, simply because it could be pro duced at less cost. The producer might be wise enough to lower the price, in order to get an increased sale, and an increased total profit; but in fact, the increased amount of production is that which lowers the price, and not the will of the seller. If increases ncreases his production, he must sell or he will lose by his increased produc tion, and he cannot prevent the price from falling, unless the demand increases quicker than his production.
The price of all labour, Wages or Hire, is also determined by the opinion of those who want it and have the means of paying for it, and the amount of the kind of labour that is in the market. The price is some times as low as nothing, which means that the thing is not wanted. This is true of all kinds of labour from the labour of him who sweeps the streets to the labour of him who produces the finest work of art or the noblest effort of intellectual power.
The notions that the value of every article produced by labour is determined by the cost of production, and that the price of labour is determined by the wants of the labourer or the prices of other things, are fruitful sources of misery. Every man can cite instances in which these doctrines are palpably false and no man can cite many instances in which they are really true, though at first sight they may appear tobe so. [Pares.]
If we would investigate the econo mical condition of a country as to the production of wealth, its distribution, and its consumption, we must ascertain its population, the various kinds of em ployments, the amount of articles pro duced, the wages of the labourer, the profits of the capitalist, rate of interest, rent of lands and houses, and the various articles consumed, both articles the pro duce of the country and articles imported.
of which the articles exported are the equivalents. We must ascertain the rate at which population increases in a given period, the rate at which permanent im provements, such as roads, houses, docks, and the like, increase, and all improve ments of a permanent character. In such an investigation the economist may pro ceed on the supposition that man is acting free from all restraint, except the restraint which compels every man to respect his neighbour's property and person ; that every man is labouring just as he pleases without constraint or direction, and that every man is enjoying what he produces or what he gets in exchange for his own production, with no other restraint than the law imposes for the protection of other men's property and persons. But such a state of things does not exist, and perhaps never did; and when the econo mist has investigated the actual state of a nation's wealth and its consumption, he will have to ascertain how and to what extent men are limited in their industry by positive law, by positive morality, and by anything else. It is his business to detect those artificial restraints which interfere with a man's industry and consequently with his enjoyment. In his inquiries he must never forget that consumption for consumption's sake is the end of all our labour; not such a consumption as shall destroy wealth, but such a consumption as is consistent with permanent and in creased means of enjoyment, both for the Retrial generation and for an increased number in the succeeding generation. He therefore recognises saving, accumu lation, and productive consumption as necessary means towards the end of in creased enjoyment. But he acknowledges no real enjoyment, he does not admit that there is happiness, and he denies the pos sibility of improvement of the social con dition of a people, unless the necessaries of life, such as the country and climata require, are possessed by all—food, rai ment, and lodging. When these things can be had, and not before, a man has leisure and inclination to supply other wants that lie dormant while he is hun gry, naked, and without shelter against the weather.
It will be discovered that there are peculiar circumstances in most countries that affect the happiness of the people in different ways. It is the business of the economist to investigate these circum stances and to ascertain them, whether the circumstances may be the peculiar form of the government, the habits of the people, their ignorance, or any other cause. His problem is to trace to their causes all those conditions which interfere with the enjoyment of the necessaries of life, without a supply of which no man can be happy. Whatever he can prove to interfere with such a supply, to dimi nish such a supply, to make it less than it otherwise would be, is within the pro v ince of his investigation ; whether it is arbitrary power in a monarch, ignorance in a constitutional government, heavy taxation, restrictions upon the free exer cise of industry, or anything else, by whatever name it is called, that interferes with a man's industry, and consequently with his enjoyment. If he carries his inquiries beyond those necessities of life which all men want before they ask for anything else, he will find ample employ ment in investigating the causes which interfere with or limit the class of se condary enjoyments, those which a man craves for when he has satisfied the first. He will discover that the same kind of restraint or interference often limits the .econdary enjoyments, and that their being limited operates upon the primary wants, and so limits the means of gratifying them also. He will thus approach the solution of a great question, and endea vour to determine whether the sovereign power should interfere with industry in any way, except to raise money by tax ation for the necessary expenses of the administration ; and he will endeavour to determine how the required amount of money may be raised so as to curtail each man's enjoyments in the least possible degree.