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Show 78 ON THE NATUHE AND [ CH. II. limiting their an1ount. 1\!Ir. Ricardo's adn1irable and efficient plan for this purpose proceeds upon the just principle, that, if you can limit' the supply of notes, so that they shall not exceed the quantity of gold which would have circulated, if the currency had been n1etallic, you will keep the notes always of the sa1ne value as gold. And I a1n confident he vvould allow that if this lin1itation could be con1- pletely effected without the paper being exchangeable for gold, the value of the notes 'vould not be altered. But, if an article which costs con1paratively nothing in tnaking, though it performs one of the n1ost in1portant functions of gold, can be kept to the value of gold by being supplied in the san1e quantity, it is the clearest of all possible proofs that the value of gold itself no further depends upon the cost of its production, than as this cost influences its supply, and th3;t if the cost vvere to cease, provided the supply vvere not increased, the value of gold in this co;untry would still remain the same. It does not, however, in any degree 'follow fron1 what has been said, that labour and the costs of production have not a most po\lverful effect upon prices.. But the true 'vay of considerino· these ~ costs 1s, as the necessary condition of the supply of the objects wanted. Although, at the titne of the actual exchano-e of t\\70 connnodities, no circun1stance affects it 0 bu1 the relation of the supply to the demand; yet, as aln1ost all the objects of human desire arc obtained by the instruinentality~ of hun1an exertion, it is SEC. III.] :MEASURES OF VALUE. 79 clear that the supply of these objects must be .regulated-first, by the quantity and direction of this exertion ; secondly, by the assistance which it may :eceive from the results of previous labour; and t?Irdly, by_ the abundance or scarcity of the n1ater1als on which it has to work, and of the food of t~e labourer. It is of importance, therefore, to consider the different conditions \vhich must be f~lfilled, in order that any comn1odity .should continue to be brought to market. The first condition is, that the labour vvhich has been expended on it should be so remunerated in the value of the objects given in exchange, as to ~ncourag~ the e~erti~n of a suf-ficient quantity of Industry 111 the direction required, as without such a?equate remuneration the supply of the con1modity must necessarily fail. If this labour should be of a very ~e~ere kind, fe\V con1paratively would be able or ~vill_tng to engage in it; and, upon the con1n1on pnnc1ples of exchano·eabh~ value before explained, it would rise in p~ice. If the work were of a nature to require an uncommon deo-ree of dexterit~ and ingenuity, a rise of price w~uld take place In a greater degree; but not certainly as s_tated by Adatn Snlith, on account of the estee~ \Vhtch .men ?ave for such talents,* but on account of their ranty, and the consequent rarity of the effects pro?uce~ by thenl. In all these cases the remt~~eratlon Will be regulated, not by the intrinsic qualities of the conlmoditics produced, but by the state of the detnand for them compared vvith the supply, and of course by the den1and and supply * 'Vealth of Nat ions, Book I. c. vi. p. 71. 6th edit. |