His assertion in another place, that “the labourer is only paid a really high price for his labour, when his wages will purchase the produce of a great deal of labour," is only another mode of stating the same doctrine, and amounts to this, that wages are high only when a great proportion of the article produced falls to the labourer. For wages at the same period being on a level in the different branches of industry, if a man's wages (to use Mr. Ricardo's language) will purchase the produce of a great deal of labour, they will purchase the produce of a great deal of any sort of labour, consequently the produce of a great deal of his own labour, that is, the proportion falling to him of the produce of his own labour will be great.

The author of the Templars' Dialogues, who pushes Mr. Ricardo's doctrines to their remotest consequences, and thus, if they are untrue, necessarily exposes their incorrectness by

* Principles of Pol. Econ, and Taxation, p. 322, 3d ed.

the paradoxes into which he falls, has not failed to drive this doctrine of the value of labour to an extravagant result. "Wages," says he, "are at a high real value, when it requires much labour to produce wages; and at a low real value, when it requires little labour to produce wages and it is perfectly consistent with the high real value-that the labourer should be almost starving; and perfectly consistent with the low real value-that the labourer should be living in great ease and comfort*."

Well might the author's friend Philoebus exclaim at this extraordinary passage, "this may be true: but you must allow, that it sounds extravagant.

Let us examine it by the test before given: let us ask, value in what? If the labourer is starving, in relation to what is his labour of high value? In relation to corn? If so, he would obtain a large quantity of corn in ex

* London Magazine for May 1824, p. 557.

change for his labour, and could not starve. It will be replied, perhaps, that corn is high too, and therefore, although labour is high, the labourer obtains little corn. But if corn and labour are both affirmed to be high, the assertion must mean, that they are high in relation to other commodities, as it is an absurdity to say, that they are both at once high in relation to each other. If therefore the labourer ob tains little corn, labour must be low in relation to corn.

The same result will be obtained if the definition of value is substituted for the term. The author's proposition then would be, "it is perfectly consistent with a great power of commanding commodities in exchange for his labour, that the labourer should be almost starving, and perfectly consistent with a small power, that the labourer should be living in great ease and comfort." This is asserting power to be in an inverse ratio to the effects produced *.

* See Note B.

CHAPTER IV.

ON PROFITS.

In the last chapter I endeavoured to explain the true meaning of the value of labour, and to show, that a rise or fall of labour implies an increase or decrease in the quantity of the commodity given in exchange for it.

A rise or fall of profits is sometimes spoken of as analogous to a rise or fall of labour or of wages. But profits cannot be regarded as

analogous to wages. able thing, or one

Labour is an exchangewhich commands other things in exchange; but the term profits denotes only a share or proportion of commodities, not an article which can be exchanged against other articles. When we ask whether

wages

have risen, we mean, whether a definite portion of labour exchanges for a greater quantity of other things than before; but when we ask whether profits have risen, we do not mean whether a definite portion of some article called profits will exchange for a greater quantity of other things than before, but whether the gain of the capitalist bears a higher ratio to the capital employed.

Mr. Ricardo appears to have considered wages, or the value of labour, and profits as equally shares or proportions of the commodity produced, and hence his doctrine, that as wages rise, or, in other words, the value of labour rises, profits must fall. Whatever," he says, "increases wages, necessarily reduces profits;" and again, "nothing can affect profits but a rise in wages."

It has been shown, however, in the last chapter, that wages, or the value of labour, and profits may both rise together, because the value of labour does not entirely depend on the proportion of the whole produce, which is given to the labourers in exchange for their