V. OF VALUE. (continued 2)

Judgment.—Storch sees value in the judgment by which we recognise it. Undoubtedly, whenever we have to do with relation, it is necessary to compare and to judge. Nevertheless, the relation is one thing and the judgment is another. When we compare the height of two trees, their magnitude, and the difference of their magnitude, are independent of our appreciation.

But in the determination of value, what is the relation of which we have to form a judgment? It is the relation of two services exchanged. The business is to discover what the services rendered [p168] are worth in relation to those received, in connexion with acts or things exchanged, and taking all circumstances into account,—not what intrinsic utility resides in these acts or things, for this utility may, to some extent, be altogether independent of human exertion, and, consequently, devoid of value.

Storch falls into the error which I am now combating when he says,—

“Our judgment enables us to discover the relation which exists between our wants and the utility of things. The determination which our judgment forms upon the utility of things constitutes their value.”

And, farther on, he says,—

“In order to create a value, we must have the conjunction of these three circumstances:—1st, That man experiences or conceives a want; 2d, That there exists something calculated to satisfy that want; and, 3d, That a judgment is pronounced in favour of the utility of the thing. Then the value of things is their relative utility.”

During the day I experience the want of seeing clearly. There exists one thing calculated to satisfy that want—namely, the light of the sun. My judgment pronounces in favour of the utility of that thing, and . . . it has no value. Why? Because I enjoy it without calling for the services of any one.

At night I experience the same want. There exists one thing capable of satisfying it very imperfectly, a wax candle. My judgment pronounces in favour of the utility, but far inferior utility, of that thing—and it has value. Why? Because the man who has taken the trouble to make the candle will not give it to me except upon condition of my rendering him an equivalent service.

What we have, then, to compare and to judge of, in order to determine Value, is not the relative utility of things, but the relation of two services.

On these terms, I do not reject Storch’s definition.

Permit me to recapitulate a little, in order to show clearly that my definition contains all that is true in the definitions of my predecessors, and eliminates everything in them which is erroneous either through excess or defect.

The principle of Value, we have seen, resides in a human service, and results from the appreciation of two services compared.

Value must have relation to Effort. Service implies a certain Effort.

Value supposes a comparison of Efforts exchanged, at least exchangeable. Service implies the terms to give and to receive. [p169]

Value is not, however, in fact proportional to the intensity of the Efforts. Service does not necessarily imply that proportion.

A multitude of external circumstances influence value without constituting value itself. The word service takes all these circumstances in due measure into account.

Materiality.—When the service consists in transferring a material thing, nothing hinders us from saying, by metonymy, that it is the thing which has value. But we must not forget that this is a figure of speech, by which we attribute to things themselves the value of the services which produced them.

Conservability.—Without reference to the consideration of materiality, value endures until the satisfaction is obtained, and no longer. Whether the satisfaction follows the effort more or less nearly—whether the service is personal or real, makes no change in the nature of value.

Capability of Accumulation.—In a social point of view, what is accumulated by saving is not matter, but value or services.35

Utility.—I admit, with M. Say, that Utility is the foundation of Value, provided it is granted me that we have no concern with the utility which resides in commodities, but with the relative utility of services.

Labour.—I admit, with Ricardo, that Labour is the foundation of Value, provided, first of all, the word labour is taken in the most general sense, and that you do not afterwards assert a proportionality which is contrary to fact; in other words, provided you substitute for the word labour the word service.

Rarity.—I admit, with Senior, that rarity influences value. But why? Because it renders the service so much more precious.

Judgment.—I admit, with Storch, that value results from a judgment formed, provided it is granted me that the judgment so formed is not upon the utility of things, but on the utility of services.

Thus I hope to satisfy Economists of all shades of opinion. I [p170] admit them all to be right, because all have had a glimpse of the truth in one of its aspects. Error is no doubt on the reverse of the medal; and it is for the reader to decide whether my definition includes all that is true, and rejects all that is false.

I cannot conclude without saying a word on that quadrature of Political Economy—the measure of value; and here I shall repeat, and with still more force, the observation with which I terminated the preceding chapters.

I said that our wants, our desires, our tastes, have neither limit nor exact measure.

I said also that our means of providing for our wants—the gifts of nature, our faculties, activity, discernment, foresight—had no precise measure. Each of these elements is variable in itself—it differs in different men—it varies from hour to hour in the same individual,—so that the whole forms an aggregate which is mobility itself.

If, again, we consider what the circumstances are which influence value—utility, labour, rarity, judgment—and reflect that there is not one of these circumstances which does not vary ad infinitum, we may well ask why men should set themselves so pertinaciously to try to discover a fixed measure of Value?

It would be singular, indeed, if we were to find fixity in a mean term composed of variable elements, and which is nothing else than a Relation between two extreme terms more variable still!

The Economists, then, who go in pursuit of an absolute measure of value are pursuing a chimera; and, what is more, a thing which, if found, would be positively useless. Universal practice has adopted gold and silver as standards, although practical men are not ignorant how variable is the value of these metals. But of what importance is the variability of the measure, if, affecting equally and in the same manner the two objects which are exchanged, it does not interfere with the fairness and equity of the exchange? It is a mean proportional, which may rise or fall, without, on that account, failing to perform its office, which is to show the Relation of two extremes.

The design of the science is not, like that of exchange, to discover the present Relation of two services, for, in that case, money would answer the purpose in view. What the science aims at discovering is the Relation between Effort and Satisfaction; and for this purpose, a measure of value, did it exist, would teach us nothing, for the effort brings always to the satisfaction a varying proportion of gratuitous utility which has no value. It is because this element of our well-being has been lost sight of that the [p171] majority of writers have deplored the absence of a measure of Value. They have not reflected that it would not enable them to answer the question proposed—What is the comparative Wealth or prosperity of two classes, of two countries, of two generations?

In order to resolve that question, the science would require a measure which should reveal to it not only the relation of two services, which might be the vehicle of very different amounts of gratuitous utility, but the relation of the Effort to the Satisfaction, and that measure could be no other than the effort itself, or labour.

But how can labour serve as a measure? Is it not itself a most variable element? Is it not more or less skilful, laborious, precarious, dangerous, repugnant? Does it not require, more or less, the intervention of certain intellectual faculties, of certain moral virtues? and, according as it is influenced by these circumstances, is it not rewarded by a remuneration which is in the highest degree variable?

There is one species of labour which, at all times, and in all places, is identically the same, and it is that which must serve as a type. I mean labour the most simple, rude, primitive, muscular,—that which is freest from all natural co-operation—that which every man can execute—that which renders services of a kind which one can render to himself—that which exacts no exceptional force or skill, and requires no apprenticeship,—industry such as is found in the very earliest stages of society: the work, in short, of the simple day-labourer. That kind of labour is everywhere the most abundantly supplied, the least special, the most homogeneous, and the worst remunerated. Wages in all other departments are proportioned and graduated on this basis, and increase with every circumstance which adds to its importance.

If, then, we wish to compare two social states with each other, we cannot have recourse to a standard of value, and for two reasons, the one as logical as the other—first, because there is none; and, secondly, because, if there were, it would give a wrong answer to our question, neglecting, as it must, a considerable and progressive element in human prosperity—gratuitous utility.

What we must do, on the contrary, is to put Value altogether out of sight, particularly the consideration of money; and ask the question, What, in such and such a country, and, at such and such an epoch, is the amount of each kind of special utility, and the sum total of all utilities, which correspond to a given amount of unskilled labour? In other words, what amount of material comfort and prosperity can an unskilled workman earn as the reward of his daily toil? [p172]

We may affirm that the natural social order is harmonious, and goes on improving, if, on the one hand, the number of unskilled labours, receiving the smallest possible remuneration, continues to diminish; and if, on the other, that remuneration, measured not in value or in money, but in real satisfactions, continues constantly on the increase.36

The ancients have well described all the combinations of Exchange:—

Do ut des (commodity against commodity), Do ut facias (commodity against service), Facio ut des (service against commodity), Facio ut facias (service against service).37

Seeing that products and services are thus exchanged for one another, it is quite necessary that they should have something in common, something by which they can be compared and estimated—namely, Value.

But value is always identically the same. Whether it be in the product or in the service, it has always the same origin and foundation.

This being so, we may ask, is Value originally and essentially in the commodity, and is it only by analogy that we extend the notion to the service?

Or, on the contrary, does Value reside in the service, and is it not mixed up and amalgamated with the product, simply and exclusively because the service is so?

Some people seem to think that this is a question of pure subtilty. We shall see by-and-by. At present I shall only observe, that it would be strange if, in Political Economy, a good or a bad definition of Value were a matter of indifference.

I cannot doubt that, at the outset, Political Economists thought they discovered value rather in the product, as such, than in the matter of the product. The Physiocrates [the Économistes of Quesnay’s school] attributed value exclusively to land, and stigmatized as sterile such classes as added nothing to matter,—so strictly in their eyes were value and matter bound up together.

Adam Smith ought to have discarded this idea, since he makes value flow from labour. Do not pure services, services per se, exact labour, and, consequently, do they not imply value? Near to the truth as Smith had come, he did not make himself master of it; for, besides pronouncing formally that labour, in order to possess value, must be applied to matter, to something physically [p173] tangible and capable of accumulation, we know that, like the Physiocrates, he ranked those who simply render services among the unproductive classes.

These classes, in fact, occupy a prominent position in the Wealth of Nations. But this only shows us that the author, after having given a definition, found himself straitened by it, and, consequently, that that definition is erroneous. Adam Smith would not have gained his great and just renown had he not written his magnificent chapters on Education, on the Clergy, and on Public Services, and if he had, in treating of Wealth, confined himself within the limits of his own definition. Happily, by this inconsistency, he freed himself from the fetters which his premises imposed upon him. This always happens. A man of genius who sets out with a false principle never escapes inconsistency, without which he would get deeper and deeper into error, and, far from appearing a man of genius, would show himself no longer a man of sense.

As Adam Smith advanced a step beyond the Physiocrates, Jean Baptiste Say advanced a step beyond Smith. By degrees Say was led to refer value to services, but only by way of analogy. It is in the product that he discovers true value, and nothing shows this better than his whimsical denomination of services as “immaterial products”—two words which absolutely shriek out on finding themselves side by side. Say, in the outset, agrees with Smith; for the entire theory of the master is to be found in the first ten lines of the work of the disciple.38 But he thought and meditated on the subject for thirty years, and he made progress. He approximated more and more to the truth, without ever fully attaining it.

Moreover, we might have imagined that Say did his duty as an Economist as well by referring the value of the service to the product, as by referring the value of the product to the service, if the Socialist propaganda, founding on his own deductions, had not come to reveal to us the insufficiency and the danger of his principle.

The question I propose, then, is this:—Seeing that certain products are possessed of value, seeing that certain services are possessed of value, and seeing that value is one and identical, and can have but one origin, one foundation, one explanation,—is this origin, this explanation to be found in the product or in the service?

The reply to that question is obvious, and for this unanswerable [p174] reason, that every product which has value implies service, but every service does not necessarily imply a product.

This appears to me mathematically certain—conclusive.

A service, as such, has value, whether it assume a material form or not.

A material object has value if, in transferring it to another, we render him a service,—if not, it has no value.

Then value does not proceed from the material object to the service, but from the service to the material object.

Nor is this all. Nothing is more easily explained than this pre-eminence, this priority, given to the service over the product, so far as value is concerned. We shall immediately see that this is owing to a circumstance which might have been easily perceived, but which has not been observed, just because it is under our eyes. It is nothing else than that foresight which is natural to man, and in virtue of which, in place of limiting himself to the services which are demanded of him, he prepares himself beforehand to render those services which he foresees are likely to be demanded. It is thus that the facio ut facias transforms itself into the do ut des, without its ceasing to be the dominant fact which explains the whole transaction.

John says to Peter, I want a cup. I could make it for myself, but if you will make it for me, you will render me a service, for which I will pay you by an equivalent service.

Peter accepts the offer, and, in consequence, sets out in quest of suitable materials, mixes them, manipulates them, and, in fine, makes the article which John wants.

It is very evident that here it is the service which determines the value. The dominant word in the transaction is facio. And if, afterwards, the value is incorporated with the product, it is only because it flows from the service, which combines the labour executed by Peter with the labour saved to John.

Now, it may happen that John may make frequently the same proposal to Peter, and that other people may also make it; so that Peter can foresee with certainty the kind of services which will be demanded of him, and prepare himself for rendering them. He may say, I have acquired a certain degree of skill in making cups. Experience tells me that cups supply a want which must be satisfied, and I am therefore enabled to manufacture them beforehand.

Henceforth John says no longer to Peter, facio ut facias, but facio ut des. If he in turn has foreseen the wants of Peter, and laboured beforehand to provide for them, he can then say do ut des. [p175]

But in what respect, I ask, does this progress, which flows from human foresight, change the nature and origin of value? Does service cease to be its foundation and measure? As regards the true idea of value, what difference does it make whether Peter, before he makes the cup, waits till there is a demand for it, or, foreseeing a future demand, manufactures the article beforehand?

There is another remark which I would make here. In human life, inexperience and thoughtlessness precede experience and foresight. It is only in the course of time that men are enabled to foresee each other’s wants, and to make preparations for satisfying them. Logically, the facio ut facias must precede the do ut des. The latter is at once the fruit and the evidence of a certain amount of knowledge diffused, of experience acquired, of political security obtained, of a certain confidence in the future,—in a word, of a certain degree of civilisation. This social prescience, this faith in a future demand, which causes us to provide a present supply; this sort of intuitive acquaintance with statistics which each possesses in a greater or less degree, and which establishes a surprising equilibrium between our wants and the means of supplying them, is one of the most powerful and efficacious promoters of human improvement. To it we owe the division of labour, or at least the separation of trades and professions. To it we owe one of the advantages which men seek for with the greatest ardour, the fixity of remuneration, under the form of wages as regards labour, and interest as regards capital. To it we are indebted for the institution of credit, transactions having reference to the future, those which are designed to equalize risk, etc. It is surprising, in an Economical point of view, that this noble attribute of man, Foresight, has not been made more the subject of remark. This arises, as Rousseau has said, from the difficulty we experience in observing the medium in which we live and move, and which forms our natural atmosphere. We notice only exceptional appearances and abnormal facts, while we allow to pass unperceived those which act permanently around us, upon us, and within us, and which modify profoundly both individual men and society at large.

To return to the subject which at present engages us. It may be that human foresight, in its infinite diffusion, tends more and more to substitute the do ut des for the facio ut facias; but we must never forget that it is in the primitive and necessary form of exchange that the notion of value first makes its appearance, that this primitive form is that of reciprocal service; and that, after all, [p176] as regards exchange, the product is only a service foreseen and provided for.

But although I have shown that value is not inherent in matter, and cannot be classed among its attributes, I am far from maintaining that it does not pass from the service to the product, so as (if I may be allowed the expression) to become incorporated with it. I hope my opponents will not believe that I am pedant enough to wish to exclude from common language such phrase as these—gold has value, wheat has value, land has value. But I have a right to demand of science why this is so? and if I am answered, because gold, wheat, and land possess in themselves intrinsic value, then I think I have a right to say—“You are mistaken, and your error is dangerous. You are mistaken, for there are gold and land which are destitute of value, gold and land which have not yet had any human labour bestowed upon them. Your error is dangerous, for it leads men to regard what is simply a right to a reciprocity of services as a usurpation of the gratuitous gifts of God.”

I am quite willing, then, to acknowledge that products are possessed of value, provided you grant me that it is not essential to them, and that it attaches itself to services, and proceeds from them.

This is so true, that a very important consequence, and one which is fundamental in Political Economy, flows from it—a consequence which has not been, and indeed could not be remarked. It is this:—

Where value has passed from the service to the product, it undergoes in the product all the risks and chances to which it is subject in the service itself.

It is not fixed in the product, as it would have been had it been one of its own intrinsic qualities. It is essentially variable; it may rise indefinitely, or it may fall until it disappears altogether, just as the species of service to which it owes its origin would have done.

The man who makes a cup to-day for the purpose of selling it a year hence, confers value on it, and that value is determined by that of the service—not the value which the service possesses at the present moment, but that which it will possess at the end of the year. If at the time when the cup comes to be sold such services are more in demand, the cup will be worth more, or it will be depreciated in the opposite case.

This is the reason why man is constantly stimulated to exercise foresight, in order to turn it to account. He has always in [p177] perspective a possible rise or fall of value,—a recompense for just and sagacious prevision, and chastisement when it is erroneous. And, observe, his success or failure coincides with the public good or the public detriment. If his foresight has been well directed, if he has made preparations beforehand to give society the benefit of services which are more in request, more appreciated, more efficacious, which supply more adequately wants which are deeply felt, he has contributed to diminish the scarcity, to augment the abundance, of that description of service, and to bring it within the reach of a greater number of persons at less expense. If, on the other hand, he is mistaken in his calculations for the future, he contributes, by his competition, to depress still farther those services for which there is little demand. He only effects, and at his own expense, a negative good,—he advertises the public that a certain description of wants no longer call for the exertion of much social activity, which activity must now take another direction, or go without recompense.

This remarkable fact—that value, incorporated in a product, depends on the value of the kind of service to which it owes its origin—is of the very highest importance, not only because it demonstrates more and more clearly the theory that the principle of value resides in the service, but because it explains, easily and satisfactorily, phenomena which other systems regard as abnormal and exceptional.

When once the product has been thrown upon the market of the world, do the general tendencies of society operate towards elevating or towards depressing its value? This is to ask whether the particular kind of services which have engendered this value are liable to become more or less appreciated, and better or worse remunerated. The one is as possible as the other, and it is this which opens an unlimited field to human foresight.

This we may remark at least, that the general law of beings, capable of making experiments, of acquiring information, and of rectifying mistakes, is progress. The probability, then, is, that at any given period a certain amount of time and pains will effect greater results than were effected by the same agency at an anterior period: whence we may conclude that the prevailing tendency of value, incorporated with a commodity, is to fall. If, for example, we suppose the cup which I took by way of illustration, and as a symbol of other products, to have been made many years ago, the probability is that it has undergone depreciation, inasmuch as we have at the present day more resources for the manufacture of such articles, more skill, better tools, capital [p178] obtained on easier terms, and a more extended division of labour. In this way the person who wishes to obtain the cup does not say to its possessor, Tell me the exact amount of labour (quantity and quality both taken into account) which that cup has cost you, in order that I may remunerate you accordingly. No, he says, Now-a-days, in consequence of the progress of art, I can make for myself, or procure by exchange, a similar cup at the expense of so much labour of such a quality; and that is the limit of the remuneration which I can consent to give you.

Hence it follows that all labour incorporated with commodities, in other words, all accumulated labour, all capital, has a tendency to become depreciated in presence of services naturally improvable and increasingly and progressively productive; and that, in exchanging present labour against anterior labour, the advantage is generally on the side of present labour, as it ought to be, seeing that it renders a greater amount of service.

This shows us how empty are the declamations which we hear continually directed against the value of landed property. That value differs from other values in nothing—neither in its origin, nor in its nature, nor in the general law of its slow depreciation, as compared with the labour which it originally cost.

It represents anterior services,—the clearing away of trees and stones, draining, enclosing, levelling, manuring, building: it demands the recompense of these services. But that recompense is not regulated with reference to the labour which has been actually performed. The landed proprietor does not say. “Give me in exchange for this land as much labour as it has received from me.” (But he would so express himself if, according to Adam Smith’s theory, value came from labour, and were proportional to it.) Much less does he say, as Ricardo and a number of economists suppose, “Give me first of all as much labour as this land has had bestowed upon it, and a certain amount of labour over and above, as an equivalent for the natural and inherent powers of the soil.” No, the proprietor, who represents all the possessors of the land who have preceded him, up to those who made the first clearance, is obliged, in their name, to hold this humble language:—

“We have prepared services, and what we ask is to exchange these for equivalent services. We worked hard formerly, for in our days we were not acquainted with your powerful means of execution—there were no roads—we were forced to do everything by muscular exertion. Much sweat and toil, many human lives, are buried under these furrows. But we do not expect from you [p179] labour for labour—we have no means of effecting an exchange on those terms. We are quite aware that the labour bestowed on land now-a-days, whether in this country or abroad, is much more perfect and much more productive than formerly. All that we ask, and what you clearly cannot refuse us, is that our anterior labour and the new labour shall be exchanged, not in proportion to their comparative duration and intensity, but proportionally to their results, so that we may both receive the same remuneration for the same service. By this arrangement we are losers as regards labour, seeing that three or four times more of ours than of yours is required to accomplish the same service; but we have no choice, and can no longer effect the exchange on any other terms.”

And, in point of fact, this represents the actual state of things. If we could form an exact estimate of the amount of efforts, of incessant labour, and toil, expended in bringing each acre of our land to its present state of productiveness, we should be thoroughly convinced that the man who purchases that land does not give labour for labour—at least in ninety-nine cases out of the hundred.

I add this qualification, because we must not forget that an incorporated service may gain value as well as lose it. And although the general tendency be towards depreciation, nevertheless the opposite phenomenon manifests itself sometimes, in exceptional circumstances, as well in the case of land as of anything else, and this without violating the law of justice, or affording adequate cause for the cry of monopoly.

Services always intervene to bring out the principle of value. In most cases the anterior labour probably renders a less amount of service than the new labour, but this is not an absolute law which admits of no exception. If the anterior labour renders a less amount of service than the new, as is nearly always the case, a greater quantity of the first than of the second must be thrown into the scale to establish the equiponderance, seeing that the equiponderance is regulated by services. But if it happen, as it sometimes may, that the anterior labour renders greater service than the new, the latter must make up for this by the sacrifice of quantity. [p180]