dealers in immaterial products, such as medical men, solicitors, &c., may do the same, and it is capable of being sold, and is also Incorporeal Property. This is usually called a PRACTICE, in French a clientelle. If a young doctor or solicitor wishes to start in business, it is very usual for him to buy a practice, and, of course, such a purchase is an investment of Capital.

31. Other kinds of Incorporeal Property are TOLLS and FERRIES, which are the Rights of receiving the payments made for using bridges, roads, and ferries. These are so well known that we need not dwell upon them.

We may mention as a last species of Incorporeal Property, not below the dignity of Economics, a street crossing. These are made the subject of regular property by the poorer classes, just as much as landed estates, and they are bequeathed from one to the other, and are made the subject of marriage portions. There cannot be a plainer example of the emptio spei than these street crossings, as no one is compelled to pay toll for them their receipts depend purely upon the charitable feelings of the passengers: and yet they are capital to their occupiers.

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CHAPTER XV.

THE THEORY OF THE EXCHANGES.

On Mill's doctrine of International Trade and International Values.

1. We have now come in the natural order of the subject to the exposition of the Exchanges, but, as usual, we are impeded in our course by the unphilosophical doctrines of Mill, to which we must give some attention. Nor will they detain us long, for a very few general considerations will suffice to brush them

away.

Mill says" Does the law that permanent value is proportioned to cost of production, hold good between commodities produced in distant places, as it does between those produced in adjacent places ?

"We shall find that it does not."

Again "The value of commodities produced at the same place, or in places sufficiently adjacent for capital to move freely between them-let us say for simplicity, if commodities produced in the same country-depend (temporary fluctuations apart) upon their cost of production. But the value of a commodity brought from a distant place, especially from a foreign country, does not depend on its cost of production in the place from whence it comes; on what then does it depend? The value of a thing in any place depends on the cost of its acquisition in that place, which, in the case of an imported article, means the cost of production of the thing which is expected to pay for it.

“If, then, England imports wine from Spain, giving for every pipe of wine a bale of cloth, the exchange value of a pipe of wine in England will not depend upon what the production of the wine may have cost in Spain, but upon what the production of the cloth has cost in England. Though the wine may have cost in Spain the equivalent of only ten days' labour, yet, if the cloth costs in England twenty days' labour, the wine, when brought to England, will exchange for the produce of twenty days' English labour, plus Principles of Political Economy, B. III., ch. 17. * Ibid., ch. 18.

the cost of carriage, including the usual profit on the importer's capital during the time it is locked up, and withheld from other employment.

"The value, then, in any country, of a foreign commodity, depends on the quantity of home produce which must be given to the foreign country in exchange for it. In other words, the values of foreign commodities depend on the terms of international exchange. What then do these depend upon? What is it which in the case supposed, causes a pipe of wine from Spain to be exchanged with England for exactly that quantity of cloth? We have seen that it is not their cost of production. If the cloth and the wine were both made in Spain, they would exchange at their cost of production in Spain; if they were both made in England, they would exchange at their cost of production in England; but all the cloth being made in England, and all the wine in Spain, they are in circumstances to which we have already determined that the law of cost of production is not applicable. We must accordingly, as we have done before in a similar embarrassment, fall back upon an antecedent law, that of supply and demand, and in this we shall again find the solution of our difficulty."

These extracts are sufficient to give an idea of Mill's fundamental doctrines on the subject.

Now to examine their application, we must separate these doctrines, because distant places need not be foreign places, and foreign places need not be distant places.

London and Melbourne are distant places, but they are not foreign places. Lille and Ghent are foreign places, but they are not distant places.

Now Mill acknowledges that Economics is to be treated in the same manner as a physical science; he himself says that the backward state of this science, among the other moral sciences, can only be remedied by adapting the methods of generalisation followed in physical science to it. He himself appeals to physical science, and to physical science he shall go.

Mill affirms that the law which governs the value of commodities exchanged between near places is fundamentally different from the law which governs the value of commodities exchanged between distant places. That if commodities be exchanged between London and Southwark, their values are governed by cost of production; if between London and Melbourne, by Supply and Demand.

Now, if this be the case, at what precise point between Southwark and Melbourne does this difference begin? At what exact spot does the Law of Value change from Cost of Production into Supply and Demand? Is it in the chops of the Channel? Is it at the Equator? Is it at the Cape of Good Hope?

Such a doctrine as this is a most glaring violation of the Law of Continuity, one of the fundamental principles of Natural Philosophy, and is exactly analogous to the Aristotelian doctrine of motion. "The Aristotelians1 made a distinction between motions according to nature (as that of a body falling vertically downward) and motions contrary to nature (as that of a body moving along a horizontal plane), the former they held became naturally quicker and quicker, the latter naturally slower and slower. But to this it might be replied that a horizontal line may pass, by gradual motion, through various inclined positions, to a vertical position, and thus the retarded motion may pass into the accelerated, and hence there must be some inclined plane on which the motion downwards is naturally uniform; which is false, and therefore the distinction of such kinds of motion is unfounded."

Now it is quite clear that Mill's doctrine of Value between near places and distant places is exactly analogous to this Aristotelian doctrine of motion. Because if it be true, there must be some precise spot in the ocean, one inch on the Southwark side of which Value depends upon Cost of Production, and one inch on the Melbourne side of it, Value depends upon Supply and Demand. And at the precise spot in question on what does Value depend?

The very statement of such a doctrine is its own refutation; and it is discreditable to this age and this country that a book setting forth such doctrines should be tolerated for an instant.

Newton used the Law of Continuity to suggest, but not to prove, the doctrine of universal gravitation. Let, he said, a terrestrial body be carried as high as the moon, will it not still fall to the earth? And dees not the moon fall by the same force.2

Now we reverse the process of Newton. Mill admits that the law of Supply and Demand governs the value of things which come from distant places. Now let us diminish the distance gradually by insensible degrees, until the places become near, and how can the law of Supply and Demand change into any other? Whewell. Novum Org. Renov., p. 221.

2 Whewell. Nor. Org. Ren., p. 221. Newton Principia, B. III., prop. 6

Thus Mill is judged and condemned by the very laws to which he appeals.

2. Again, says Mill, the same change takes place in exchanges between foreign countries. But this, if possible, is a still more glaring absurdity; because if the two countries coalesce and become one, one law of Value must immediately change into the other. England and Scotland were once foreign countries to each other, therefore the Values of commodities exchanged between them depended upon the Law of Supply and Demand. But in process of time England and Scotland became one country, and then the Law of Value between them, at that very instant, changed into Cost of Production. Italy was until very recently divided into separate states. According to Mill, Value then depended upon Supply and Demand, but the various petty states of Italy coalesced, and became one state. According to Mill, the Law of Value at the same instant underwent a fundamental change, and became that of Cost of Production. Thus the unification of Italy caused a fundamental change of the Law of Value. It would be just as rational to say that the unification of Italy caused a fundamental change in the Law of Gravitation; or in the principles of Astronomy; or in the laws of Optics.

3. Now let us apply Mill's doctrine to another case, to an exchange between Lille and Ghent, for example. What is the Law of Value between such places? They are near places; therefore, according to Mill, Value depends upon Cost of Production; but they are also foreign places; therefore, according to the same Mill, Value depends upon Supply and Demand. Now, in such a case, what is the bewildered student to believe? But if France were to absorb Belgium, the Law of Value would instantly change from Supply and Demand to Cost of Production!

4. Mill's doctrine that because the Law of Cost of Production fails in exchanges between distant places, we must resort to the Law of Supply and Demand, is as gross an absurdity as if a person were to write a book on Optics, and to say in a certain class of phenomena-here the Emission theory of Light fails us, and therefore we must resort to the Undulatory theory. The Laws of Physical Science shew us that there can be only one general theory of Light, and only one general theory of Value.