wholly destitute of Value, so equally, there are numberless products of nature which have no Value. Labour and the agency of nature only affect Value when they make a product more desirable, so that the Demand for the product is greater in one condition than the other. So also ill-directed labour and the agency of nature may make a product less desirable, and so diminish Value, because the product will be less demanded.

What we wish to enforce is evident. Labour and the agency of nature stand exactly on the same footing with regard to Value. All that either of them can do is to change the condition of the product. If it is more desired in the new form it has greater Value, if it is less desired, it has less Value; and either result may take place according to circumstances. But the actual Value is determined solely by the relation of the Supply to the Demand. In an unfavourable year corn of a very inferior quality may, in consequence of its scarcity, sell for a very much higher price than the very best quality of corn in a very favourable year, in consequence of its exceeding abundance. But at the same time corn of a superior quality will always sell at a higher price than corn of an inferior quality.

Thus Demand, and not Labour, is the sole cause of Value: and the relation between the Demand and the Supply is the sole regulator of Value.

15. Hence all Labour which is demanded and paid for, has Value itself, and is wealth, no matter whether it terminate in a material product like that of artisans and ploughmen, or whether it perishes in the act of production, such as that of actors, singers, lawyers, and professional men of all sorts.

And all Labour is productive which draws forth some remuneration or reward in exchange for itself, no matter whether it is embodied in a material product or not. He who earns an income by his labour can live on his earnings, no matter whether it is embodied in a material object or not; whether he has earned them in a profession or by selling gold watches, clothes, buns, or soda water.

The exchange of the Labour for its reward is one exchange. If there be a material product as the result of the labour, that material product may be exchanged away for something else. But that is a distinct exchange without any connection with the

former exchange. And indeed the product may have very little value compared to its cost, and may not even be intended to have any. As, for instance, a grand cathedral may be erected at an enormous expense; the labour which the workmen give in exchange for their wages is wealth to them: but what would be the selling value of the cathedral? What would be the selling value of our public buildings and monuments? The country paid immense sums for our old line-of-battle ships, but when iron-clads came in what was the selling value of the old wooden screw liners?

These and innumerable other instances which will suggest themselves to any person of practical experience, shew the utter fallacy of the doctrine that Labour is either the Measure or the Cause of Value.

16. When one person sells to another the right to his Labour or services, of any description, he becomes the servant of that person, and the remuneration he receives is properly termed WAGES in our homely old English, whatever be the nature of the Labour or the rank of the Labourer. Modern refinement, however, in many cases disdains this name, which is now usually confined to the sum paid for manual labour. Labourers who consider themselves of a higher sort affect other names for their rewards. Officers in the services speak of their Pay; professional men of their Fees; employés of all sorts of their Salary. But all these names merely denote the reward for labour; and all who receive them are labourers, whatever their rank or the nature of their labour may be.

17. Labour, then, being clearly understood to be an exchangeable commodity by itself, Economists agree that its Value is governed by the general law of Demand and Supply. But in the application of this law a very serious omission is usually made. Thus, among many others, Senior says that the Rate of Wages depends "on the extent of the Fund for the maintenance of Labourers compared with the number of labourers to be maintained." And Mill says 2-"Wages depend mainly upon the demand and supply of labour; or, as it is often expressed, on the 1 Political Economy, p. 153,

2 Principles of Political Economy, B. II., ch. 11, § 1.

proportion between population and capital.

There is

unfortunately no mode of expressing by one familiar term the aggregate of what may be called the wages fund of a country; and as the wages of productive labour form nearly the whole of that fund, it is usual to overlook the smaller and less important part, and to say that wages depend upon population and capital. It will be convenient to employ this expression, remembering, however, to consider it as elliptical, and not as a literal statement of the entire truth.

"With these limitations of the terms, wages not only depend on the relative amount of Capital and population, but cannot, under the rule of competition, be affected by anything else. Wages (meaning, of course, the general rate) cannot rise but by an increase of the aggregate funds employed in hiring labourers, or a diminution in the number of competitors for hire; nor fall, except either by a diminution of the funds devoted to paying labour, or by an increase in the number of labourers to be paid."

Now when these writers say that wages cannot be affected by anything else but the relative amount of capital and population, they evidently omit a most important element affecting the Rate of Wages, namely, the QUANTITY OF WORK to be done.

There are evidently two classes of cases, one where the quantity of work to be done remains fixed, or can only be increased within very narrow limits, the other where it can be multiplied indefinitely.

Thus in agriculture the quantity of work to be done on a farm is very nearly a fixed quantity. When a farm has once been brought into a state of high cultivation, the quantity of labour it requires is very nearly a fixed quantity; and if the agricultural population multiplies beyond the demand for it, agricultural wages must fall notwithstanding any rise that may take place in manufacturing districts.

But the case is different in manufactures. The demand for manufactures can usually be met to any extent. The quantity of work to be done in manufactures may increase faster than any increase of population, and the increase is effected by the extension of machinery. The wages, therefore, and the condition of the people in a manufacturing district may constantly improve, while the condition of an agricultural population may remain stationary, and even retrograde. So improved processes in machinery may

support an increased manufacturing population, because they tend to lower the price of the product, and so increase the demand for it; but improved processes in machinery cause agriculture to require a diminished population: because in manufactures increased machinery increases and multiplies products; but in agriculture its principal effect is to supersede labour. When the harvest is grown the use of reaping, threshing, and other machines is not to multiply the products, but to supersede and economise the labour necessary to gather them in and prepare them for use.

Thus the main and primary purpose of machinery in manufactures is to multiply and increase production; its secondary effect, though no doubt a most important one, is to diminish the cost of production, because it costs less to erect and maintain the machinery than to maintain the number of men who could do an equal amount of work: but in agriculture the main and primary purpose is to diminish the cost of production.

The effect of artificial manures, draining, &c., is chiefly to multiply the quantity of grain on each stalk, not so much to multiply the number of stalks. Consequently there is but very little more labour required to reap a field of wheat which yields 50 bushels to the acre than one which yield only 30 bushels.

Thus the main effect of machinery in manufactures is to increase the quantity of produce of any given number of persons; the main effect of machinery in agriculture is to diminish the number of people requisite to obtain a given amount of produce. No doubt the effect in both cases is to increase the quantity of produce compared to the population; but there is this most important difference between the two cases; manufactures can usually absorb and provide for the increase of its own population; and not only that, it absorbs and provides for a large amount of immigration from other quarters. But agriculture can not provide for and absorb the natural increase of its own population; and what is to become of the superfluous agricultural population is a very serious consideration indeed. If manufactures were only called upon to provide for the natural increase of its own population, manufacturing wages would constantly tend to rise; if agriculture were called upon to provide for all the increase of its own population, wages would constantly tend to fall. What in some measure tends to lower wages in manufactures and to raise wages in agriculture

is the constant flow of the superfluous population in agriculture to manufactures.

The common doctrine, then, that Wages depend only on the ratio of Population to Capital must be rectified by the introduction of another most important element, namely, the Quantity of Work to be done. Thus the actual amount of wages depend upon the quantity of work to be done, the labourers seeking to do it, and the funds.

And this, among innumerable other cases, shews the impossibility of making Labour the measure of Value, because different kinds of Labour are constantly changing in their Value.

18. It is often said that Wages depend upon the ratio between Population and Capital, as if all the money spent as wages is Capital. This, however, is a great error. The slightest reflection will shew that all the money given in exchange for services or labour can by no means be called Capital; i. e., expended for the purpose of making a profit by it. A very large portion of the money spent in wages is not Capital but Income. Thus the wages of domestic servants, the money paid for professional services of all sorts, is not Capital but Income.

Wages only spent for the purpose of profit, such as manufacturing, agricultural, and commercial, are Capital.

Now there is an important difference to be observed respecting Wages spent as Income, and Wages expended as Capital. In the former case there is no limit to the absolute rule of Demand and Supply; in the latter there is.

If I want professional services of the highest order there is no limit to the sum which must be paid. A surgical operation of great delicacy which may only last a minute may cost perhaps £150 when performed by a person of the most eminent skill. A very distinguished counsel has been known to receive £2,000 for half-an-hour's work. So the Wages which an opulent nobleman may have to give his head cook, or gardener, are determined by nothing but the Law of Demand and Supply.

But when Wages are expended as Capital the case is different. In such cases the amount which a Capitalist can afford to pay as Wages is limited and controlled by the profits which he expects to make by the sale of the product. If the price of the product could be raised indefinitely, wages, no doubt, might also rise