Chapter XI · OBSERVATIONS ON THE DEFINITIONS.

Def. 1. The reader will be aware that, in almost all definitions, the same meaning may be conveyed in different language, and that it is the meaning rather than the mode of expressing it that should be the main object of our consideration. The essential question in the definition of wealth is, whether or not it should be confined to material objects, and the reader is already apprised of my reasons for thinking that it should. Even M. Say, who admits “les produits immatériels,” allows, as I have before stated (p. 93), that the multiplication of them “ne fait rien pour la richesse;” and M. Storch, in his able “Cours d’Economie Politique,” though he justly lays great stress on what he calls les biens internes, with a view to civilization and the indirect production of wealth, confines the term richesses to biens externes, or material objects; 250and according to this meaning treats of the Théorie de la Richesse Nationale, in the first, and far the largest, part of his work. Altogether, I can feel no doubt that some classification of this kind, or some separation of material from immaterial objects is, in the highest degree, useful in a definition of wealth.

The latter part of the definition is of minor importance. It is intended to exclude such material objects as air, light, rain, &c.—which, however necessary and useful to man, are seldom considered as wealth; and, perhaps, it is more objectionable to exclude them, by the introduction of the term exchangeable value into a definition of wealth, than in the mode which has been adopted. If the latter clause were not added, the only consequence would be, that, in comparing different countries together, such objects as air, light, &c., would be neglected as common quantities.

Def. 2. I have already alluded to the manner in which M. Say has applied the 251term Utility. His language cannot be considered as consistent, when he says that the price of an article is the measure of its utility, although it might be, according to his own expression, la chose la plus inutile.^[96] It is much better for the science of political economy that the term should retain its natural and ordinary meaning. All wealth is no doubt useful, but there are so very many immaterial, and some material objects which are highly useful, and yet not wealth, that there can be no excuse for confounding them. M. Storch has not escaped the same kind of error.

Def. 5. Two articles are never exchanged with each other without a previous estimation being formed of the value of each, by a reference to the wants of mankind and the means of production. This general and most important relation to the means of production, and the labour which represents these means, seems to be quite forgotten by those who imagine that there is no relation implied 252when the value of a commodity is mentioned without specific reference to some other commodity.

M. Say, under the head Valeur des Choses, observes, “c’est la quantité d’autres choses évaluables qu’on peut obtenir en échange d’elle.”^[97] This is a most vague and uncertain definition, and much less satisfactory than the general power of purchasing.

M. Storch says, that “la valeur des choses, c’est leur utilité relative;” but this certainly cannot be said unless we completely change the natural and ordinary meaning either of utility or value.

Neither M. Say nor M. Storch has sufficiently distinguished utility, wealth, and value.

Def. 6. The term creation is not here meant to apply to the creation of matter, but to the creation and production of the objects which have been defined to be wealth.

Defs. 11 and 12. If wealth be confined to material objects, it must be allowed to be 253peculiarly convenient and useful, in explaining the causes of the wealth of nations, to have some appropriate term for that species of labour which directly produces wealth; and as the principal founder of the science of political economy has used the terms productive labour in the restricted sense necessary for this special purpose, perhaps few objections would have been made to it, if it had not involved all other kinds of labour, however useful and important, under the apparently disparaging designation of unproductive. This is a consequence, no doubt, to be regretted: yet, when it has been repeatedly stated that the term unproductive, as applied by Adam Smith, in no degree impeaches the utility and importance of such labour, but merely implies that it does not directly produce gross wealth, the mere name ought not to decide against a classification for which it appears from experience that it is very difficult to find a satisfactory substitute.

In M. Storch’s “Considérations sur la Nature du Revenu National,” he does not appear to me to give a correct view of what 254Adam Smith means by productive labour.^[98] The difficulty of classification above alluded to appears strikingly in this treatise. There is some plausibility in the system, and it is explained with ingenuity and ability; but I think that the adoption of it would destroy all precision in the science of political economy.

Defs. 19 and 20. I have never been able to understand how the accumulation of capital and the difference between saving and spending can be distinctly explained, if we call all labour equally productive.

Def. 23. It is this gross surplus of the land which furnishes the means of subsistence to the inhabitants of towns and cities. Besides the rents of land, which are powerfully effective in this respect, a large part of what, in the division of the produce of land, would fall to the shares of the farmers and labourers, is exchanged by them for other objects of convenience and gratification, thus giving the 255main necessaries of life to a great mass of persons not immediately connected with the soil. The proportion which this mass of persons may bear to the cultivators will depend upon the natural fertility of the soil, and the skill with which it has been improved, and continues to be worked.

Defs. 28 and 30. In a valuable publication on the Price of Corn, and Wages of Labour, by Sir Edward West, which has just fallen into my hands, he proposes that the price of labour should mean the sum paid for a given quantity of labour of a given character. I quite agree with him in thinking that it would be useful to have some appropriate term to express this meaning; but, as the price of labour has certainly not hitherto been used in this sense, and as it would be, in almost all cases, extremely difficult to give an answer to a question respecting the price of labour so understood, it would certainly be proper to vary the expression in some degree, in order to prepare people for a new meaning. In 256Definition 30, therefore, I have given this meaning to The price of effective labour.

Def. 31. It would save time and circumlocution, which is one of the great objects of appropriate terms, if, in speaking of the labour worked up in commodities, the labour worked up in the capital necessary to their production were designated by the term accumulated labour, as contradistinguished from the immediate labour employed by the last capitalist. We must always recollect, however, that labour is not the only element worked up in capital.

Def. 38. I have used the word elementary, in order to show that money-costs are not meant. On account of the doubt which may arise in this respect when the term costs of production is used alone, and the further doubt, whether ordinary profits are always included, I am decidedly of opinion that the conditions of the supply is a more expressive and less uncertain term for the same meaning. I do not find, however, that generally 257it is so well understood. I have defined, therefore, the costs of production with the addition of the word elementary, and including profits, as having precisely the same meaning as the conditions of the supply. I once thought it might be better not to include profits in costs of production; but as Adam Smith has included them, and more particularly as the profits worked up in the capital necessary to any production must form a part of the advances or costs in any sense in which the word costs can be used, I think it best, on the whole, to include necessary profits in the elementary costs of production. They are obviously included in the necessary conditions of the supply.

Defs. 39 and 40. In speaking, of the quantity of labour for which a commodity will exchange, as a measure either of the conditions of its supply or of its value, it must always be understood, that the different kinds of labour which may have been employed to produce it, must be reduced to labour of one description and of the lowest denomination, 258namely, common agricultural day-labour, estimated on an average throughout the year. This is the kind of labour which is always referred to when labour is spoken of as a measure.

Def. 57. It is not true, as stated by M. Say, that prices rise in the direct ratio of the quantity demanded, and the inverse ratio of the quantity supplied.^[99] They only vary in this way, when the demand is understood to mean the sacrifice which the demanders are able and willing to make, in order to supply themselves with what they want; which may be represented in regard to price by the quantity of money ready to be employed in purchases in a market. When the demand for labour is spoken of, it can only relate to extent; and a greater demand can only signify a power of commanding a greater quantity of labour.

Def. 59. The only productive consumption, properly so called, is the consumption 259or destruction of wealth by capitalists with a view to reproduction. This is the only marked line of distinction which can be drawn between productive and unproductive consumption. The workman whom the capitalist employs certainly consumes that part of his wages which he does not save, as revenue, with a view to subsistence and enjoyment; and not as capital, with a view to production. He is a productive consumer to the person who employs him, and to the state, but not, strictly speaking, to himself. Consumption is the great purpose and end of all production. The consumption of wealth, as revenue, with a view to support and enjoyment, is even more necessary and important than the consumption of wealth as capital; but their effects are essentially different in regard to the direct production of wealth, and they ought therefore to be distinguished.

260I am far from meaning to present the foregoing definitions to the notice of the reader as in any degree complete; either in regard to extent, or correctness. In extent, they have been purposely limited, and in regard to correctness, I am too well aware of the difficulty of the subject to think that I have succeeded in making my definitions embrace all I wish, and exclude all I wish. I am strongly, indeed, disposed to believe, that in the sciences of morals, politics, and political economy, which will not admit of a change in the principal terms already in use, the full attainment of this object is impossible; yet a nearer approach to it is always something gained. I should not indeed have been justified in offering these definitions to the public, if I had not thought that they were, on the whole, less objectionable, and would be more useful in explaining the causes of the wealth of nations than any which I had seen. But I am conscious of some anomalies, and probably there are some more of which I am not conscious. Knowing, however, that 261the attempt to remove them might destroy useful classifications, I shall not consider a few individual cases, of little importance, as valid objections.

It is known that Adam Smith gave few regular definitions; but the meanings in which he used his terms may be collected from the context, and to these I have, in a considerable degree, adhered. For some I have been indebted to M. Say; others are my own; and in all, I have endeavoured to follow the rules for the definition and use of terms laid down at the beginning of this treatise. I shall consider my object as fully answered, if what I have done, should succeed in drawing that degree of attention to the subject which may lead to the production of something of the same kind, more correct and more useful, and so convincing as to be generally adopted.

FINIS.

TRANSCRIBER’S NOTES

Silently corrected typographical errors and variations in spelling.

Archaic, non-standard, and uncertain spellings retained as printed.

Footnotes have been re-indexed using numbers and collected together at the end of the last chapter.