(2.iii.16) 2. Mr. Ricardo, in his exposition of the principles of political economy, used theword value in a sense referable, not to purchasing power, but to cost of production. Thus, if two days' labour went to the production of one commodity, and two to the production of anothercommodity, Mr. Ricardo would say, the two commodities were of equal value. In like manner, iftwo days' labour produced at one time a certain amount of commodities, and at another time, byan improvement in the productive powers of that labour, a greater amount of commodities, Mr. Ricardo would say that the value of the smaller quantity, and the value of the greater quantity,were the same.
(2.iii.17) If we use the term value in the sense of exchangeable value, or purchasing power;that is, command over a greater or less quantity of commodities; the case is the same with that whichwe have already considered, wherein rise and fall of wages or profits were taken to mean, agreater or less amount of commodities. When we say that the labourer receives a greater quantityof commodities, and when we say that he receives a greater exchangeable value, we denote bythe two expressions, one and the same thing. In this sense, therefore, nobody has evermaintained that profits necessarily rise when wages fall, and fall when wages rise: because it wasalways easy to see, that, by an alteration in productive power, both may rise or fall together, andalso that one may rise or fall, and the other remain stationary.
(2.iii.18) We come next to consider what language may be correctly used, in the sense whichMr. Ricardo annexed to the word value.
(2.iii.19) It will immediately be seen that, in this sense, the case corresponds exactly. withthe first of those which I have already considered, that of proportions. If what is 'produced, by aninvariable quantity of labour, continues to be divided in the same proportion, say one half to thecapitalist, and one half to the labourers, that half may be a greater or a smaller quantity ofcommodities, but it will always be the produce of the same quantity of labour; and, in Mr. Ricardo's sense, always, for that reason, of the same value. In this sense of the word value,therefore, it is strictly and undeniably true, that profits depend upon wages so as to rise whenwages fall, and fall when wages rise.
(2.iii.20) In the common mode of expressing profits, the reference that is made is not to theproduced commodity, but to the capital employed in producing it; including the wages, which itis necessary to advance, and from which the owner expects of course to derive the sameadvantage as from his other advances. Profits are expressed not in aliquot parts of the produce,but of this capital. It is not so much per cent of the produce that a capitalist is said to receive, butso much per cent upon his capital. Now, the capital may be either of more, or of less value thanthe produce, according to the proportion in which it is capital of the fixed, or the circulatingkind. Suppose a capital of 200 l. of which 50 l. is consumed in the production of a commodity,which sells for 120 l.; we have first to deduct 50 l. for the capital consumed; there then remains70 l. to be divided between the capitalist and the labourers; and if we suppose that 50 l. has beenpaid for wages, in other words, that such is the share of the labourers, the capitalist receives 10per cent upon his capital; including here, in the term capital, what he has advanced as wages; buthe receives 28-1/2 per cent of the produce, or of that which is divided after replacing the capitalconsumed. It is only, however, the language which here is different; the thing expressed isprecisely the same; and whether the capitalist says he receives 10 per cent upon his capital, or28-1/2 per cent of the produce, he means in both cases the same amount, viz. 20 l.
(2.iii.21) There are, therefore, in reality, but two cases. The one, that in which we speak ofproportions; the other, that in which we speak of quantity of commodities. In the one case, it iscorrect to say that profits depend literally and strictly upon wages. In the other case, although itis still correct to say that profits depend upon wages; for the greater the share that goes to thelabourer, the less the share that remains for the capitalist; yet to make the language of quantitycorrespond in meaning with the language of proportions, the form of expression requires to bemodified.
(2.iii.22) There is a great convenience in adapting our language to the rate upon the capital,rather than the shares of the produce; because the rate upon the capital is the same in all thevarieties of produce, but the share of the capitalist is different, according to all the differentdegrees in which capital contributes to the intended result.
(2.iii.23) This, however it is evident, makes no difference in the truth of the doctrine. If inone case capital contributes twice as much, in another three times as much, as it does in a third case,whatever share the capitalist in the third case receives, the capitalist in the first case will receivetwice as great a share, and the capitalist in the second case will receive three times as great; ifthe share of the capitalist in the third case is reduced one third by rise of wages, the share of eachof the other two will also be reduced one third; and whatever, in percentage on his capital, theprofits of the one are reduced, the same in that percentage will the profits of the others hereduced.
