There is, however, one of our wants, very special in its nature, the cement of society, at once the cause and the effect of all our transactions, and the everlasting problem of Political Economy, of which it is necessary to say something in this place—I allude to the want of Exchanging.

In the preceding chapter we have described the marvellous effects of Exchange. They are such that men must naturally feel a desire to facilitate it, even at the expense of considerable sacrifices. It is for this end that we have roads, canals, railways, carriages, ships, merchants, tradesmen, bankers; and it is impossible to believe that society would submit to such enormous draughts upon its forces for the purpose of facilitating [p151] exchange, if it did not find in exchange itself an ample compensation.

We have also seen that direct barter could give rise only to transactions at once inconvenient and restrained.

It is on that account that men have thought of resolving barter into two factors, sale and purchase, by means of an intermediate commodity, readily divisible, and, above all, possessed of value, in order to secure public confidence. This intermediate commodity is Money.

And it is worthy of remark that what, by an ellipsis or metonymy, we designate the value of gold and silver rests on exactly the same foundation as that of the air, the water, the diamond, the sermons of our old missionary, or the roulades of Malibran—that is to say, upon services rendered and received.

The gold, indeed, which we find spread on the favoured banks of the Sacramento, derives from nature many precious qualities—ductility, weight, beauty, brilliancy, utility even, if you will. But there is one quality which nature has not given it, because nature has nothing to do with that—Value. A man knows that gold supplies a want which is sensibly felt, and that it is much coveted. He goes to California to seek for gold, just as my neighbour went to the spring to fetch water. He devotes himself to hard work—he digs, he excavates, he washes, he melts down—and then he comes to me and says: I will render you the service of transferring to you this gold; what service will you render me in return? We discuss the matter, we weigh all the circumstances which should influence our determination;—at last we conclude a bargain, and Value is manifested and fixed. Misled by this curt form of expression, “Gold is valuable,” we might suppose that the value resides in the gold, just as the qualities of ductility and specific gravity reside in it, and that nature has put it there. I hope the reader is already satisfied that this is a mistake. By-and-by he will be convinced that it is a deplorable fallacy.

Another misconception exists on the subject of gold, or rather of money. As it is the constant medium which enters into all transactions, the mean term between the two factors of compound barter, it is always with its value that we compare the value of the two services to be exchanged; and hence we are led to regard gold or money as a measure of value. In practice it cannot be otherwise. But science ought never to forget that money, so far as its value is concerned, is subject to the same fluctuations as any other product or service. Science does forget this sometimes; nor is it surprising. Everything tends to make us consider money [p152] as the measure of value, in the same way as the litre (or quart) is the measure of capacity. It plays an analogous part in actual business. One is not aware of its own fluctuations, because the franc, like its multiples and sub-multiples, always retains the same denomination. And arithmetic itself tends to propagate the confusion by ranking the franc as a measure, along with the measures of quantity in daily use.

I have given a definition of Value, at least of value according to my idea of it. I have subjected that definition to the test of divers facts. None of them, so far as I can see, contradict it; and the scientific signification which I have given to the word agrees with its vulgar acceptation, which is no small advantage, no slight guarantee—for what is science but experience classified? What is theory but the methodical exposition of universal practice?

I may now be permitted to glance rapidly at the systems which have hitherto prevailed. It is not in a spirit of controversy, much less of criticism, that I enter upon this examination, and I should willingly avoid it were I not convinced that it will throw new light upon the fundamental principles which I am advocating.

We have seen that writers on Political Economy have sought for the principle of Value in one or more of the accidents which exercise a notable influence over it, such as materiality, conservability, utility, rarity, labour, etc.; just like a physiologist who should seek the principle of life in one or more of the external phenomena which are necessary to its development, as air, water, light, electricity, etc.

Materiality.—“Man,” says M. de Bonald, “is mind served by organs.” If the economists of the materialist school had simply meant that men can render reciprocal services to each other only through the medium of their bodily organs, and had thence concluded that there is always something material in these services, and, consequently, in Value, I should not have proceeded a step farther, as I have a horror at word-catching and subtilties, which wit revels in.

But they have not thus understood it. What they believe is that Value has been communicated to matter, either by the labour of man or by the action of nature. In a word, deceived by the elliptical form of expression, gold is worth so much, corn is worth so much, they think they see in matter a quality called Value, just as the natural philosopher sees in it resistance and weight—and yet these attributes have been disputed.

Be that as it may, I dispute formally the existence of Value as an attribute of matter. [p153]

And first of all, it cannot be denied that Matter and Value are often found separated. When we say to a man—Carry that letter to its destination—fetch me some water—teach me this science or that manufacturing process—give me advice as to my sickness, or my law-suit—watch over my security, while I give myself up to labour or to sleep,—what we demand is a Service, and in that service we acknowledge in the face of the world that there resides a Value, seeing that we pay for it voluntarily by an equivalent service. It would be strange that we should refuse to admit in theory what universal consent admits in practice.

True, our transactions have reference frequently to material objects; but what does that prove? Why, that men, by exercising foresight, prepare to render services which they know to be in demand. I purchase a coat ready made, or I have a tailor to come to my house to work by the day; but does that change the principle of Value, so as to make it reside at one time in the coat and at another time in the service?

One might ask here this puzzling question—Must we not see the principle of Value first of all in the material object, and then attribute it by analogy to the services? I say that it is just the reverse. We must recognise it first of all in the services, and attribute it afterwards, if we choose, by a figure of speech, by metonymy, to the material objects.

The numerous examples which I have adduced render it unnecessary for me to pursue this discussion further. But I cannot refrain from justifying myself for having entered on it, by showing to what fatal consequences an error, or, if you will, an incomplete truth, may lead, when placed at the threshold of a science.

The least inconvenience of the definition which I am combating has been to curtail and mutilate Political Economy. If Value resides in matter, then where there is no matter there can be no Value. The Physiocrates31 designated three-fourths of the entire population as sterile, and Adam Smith, softening the expression, as unproductive classes.

But as facts in the long run are stronger than definitions, it became necessary in some way to bring back these classes, and make them re-enter the circle of economic studies. They were introduced by way of analogy; but the language of the science, formed beforehand on other definitions, had been so materialized as to render this extension repulsive. What mean such phrases as these: “To consume an immaterial product? Man is accumulated capital? Security is a commodity?” etc., etc. [p154]

Not only was the language of the science materialized beyond measure, but writers were forced to surcharge it with subtile distinctions, in order to reconcile ideas which had been erroneously separated. Hence Adam Smith’s expression of Value in use, in contradistinction to Value in exchange, etc.

A greater evil still has been that, in consequence of this confusion of two great social phenomena, property and community, the one has seemed incapable of justification, and the other has been lost sight of.

In fact, if Value resides in matter, it becomes mixed up with the physical qualities of bodies which render them useful to man. Now, these qualities are frequently placed there by nature. Then nature co-operates in creating Value, and we find ourselves attributing value to what is essentially common and gratuitous. On what basis, then, do you place property? When the remuneration which I give in order to obtain a material product, corn for example, is distributed among all the labourers, near or at a distance, who have rendered me a service in the production of that commodity,—who is to receive that portion of the value which corresponds to the action of nature, and with which man has nothing to do? Is it Providence who is to receive it? No one will say so, for we never heard of Nature demanding wages. Is man to receive it? What title has he to it, seeing that, by the hypothesis, he has done nothing?

Do not suppose that I am exaggerating, and that, for the sake of my own definition, I am torturing the definition of the economists, and deducing from it too rigorous conclusions. No, these consequences they have themselves very explicitly deduced, under the pressure of logic.

Thus, Senior has said that “those who have appropriated natural agents receive, under the form of rent, a recompense without having made any sacrifice. They merely hold out their hands to receive the offerings of the rest of the community.” Scrope tells us that “landed property is an artificial restriction imposed upon the enjoyment of those gifts which the Creator has intended for the satisfaction of the wants of all.” J. B. Say has these words: “Arable lands would seem to form a portion of natural wealth, seeing that they are not of human creation, and that nature has given them to man gratuitously. But as this description of wealth is not fugitive, like air and water,—as a field is a space fixed and marked out which certain men have succeeded in appropriating, to the exclusion of all others who have given their consent to this appropriation, land, which was natural [p155] and gratuitous property, has now become social wealth, the use of which must be paid for.”

Truly, if it be so, Proudhon is justified in proposing this terrible question, followed by an affirmation still more terrible:—

“To whom belongs the rent of land? To the producer of land, without doubt. Who made the land? God. Then, proprietor, begone!”

Yes, by a vicious definition, Political Economy has handed over logic to the Communists. I will break this terrible weapon in their hands, or rather they shall surrender it to me cheerfully. The consequences will disappear when I have annihilated the principle. And I undertake to demonstrate that if, in the production of wealth, the action of nature is combined with the action of man, the first—gratuitous and common in its own nature—remains gratuitous and common in all our transactions; that the second alone represents services, value; that the action of man alone is remunerated; and that it alone is the foundation, explanation, and justification of Property. In a word, I maintain that, relatively to each other, men are proprietors only of the value of things, and that in transferring products from hand to hand, what they stipulate for exclusively is value, that is to say, reciprocal services:—all the qualities, properties, and utilities, which these products derive from nature being obtained by them into the bargain.

If Political Economy hitherto, in disregarding this fundamental consideration, has shaken the guardian principle of property, by representing it as an artificial institution, necessary, indeed, but unjust, she has by the same act left in the shade, and completely unperceived, another admirable phenomenon the most touching dispensation of Providence to the creature—the phenomenon of progressive community.

Wealth, taking the word in its general acceptation, results from the combination of two agencies—the action of nature, and the action of man. The first is gratuitous and common by the destination of Providence, and never loses that character. The second alone is provided with value, and, consequently, appropriated. But with the development of intelligence, and the progress of civilisation, the one takes a greater and greater part, the other a less and less part, in the realization of each given utility; whence it follows that the domain of the Gratuitous and the Common is continually expanding among men relatively to the domain of Value and Property; a consoling and suggestive view of the subject, entirely hidden from the eye of science, so long as we continue to attribute Value to the co-operation of nature. [p156]

Men of all religions thank God for His benefits. The father of a family blesses the bread which he breaks and distributes to his children—a touching custom, that reason would not justify were the liberality of Providence other than gratuitous.

Durableness, conservability—that pretended sine quâ non of Value, is connected with the subject which I have just been discussing. It is necessary to the very existence of value, as Adam Smith thinks, that it should be fixed and realized in something which can be exchanged, accumulated, preserved, consequently in something material.

“There is one sort of labour which adds32 to the value of the subject upon which it is bestowed. There is another which has no such effect.”

“The labour of the manufacturer,” he adds, “fixes and realizes itself in some particular subject or vendible commodity, which lasts for some time at least after the labour is past. The labour of the menial servant, on the contrary” (to which the author assimilates in this respect that of soldiers, magistrates, musicians, professors, etc.), “does not fix or realize itself in any particular subject or vendible commodity. His services perish in the very instant of their performance, and leave no trace of value behind them.”

Here we find Value connected rather with the modifications of matter than with the satisfactions of men—a profound error; for the sole good to be obtained from the modification of material things is the attainment of that satisfaction which is the design, the end, the consommation33 of every Effort. If, then, we realize that satisfaction by a direct and immediate effort, the result is the same; and if that effort can be made the subject of transactions, exchanges, estimation, it includes the principle of Value.

As regards the interval which may elapse between the effort and the satisfaction, surely Adam Smith attributes far too much importance to it, when he says that the existence or non-existence of Value depends upon it. “The value of a vendible commodity,” he says, “lasts for some time at least.” Undoubtedly it lasts until the commodity has answered its purpose, which is to satisfy a want; and exactly the same thing may be said of a service. As long as that plate of strawberries remains on the sideboard it preserves its value. Why? Because it is the result of a service [p157] which I have designed to render to myself, or that another has rendered to me by way of compensation, and of which I have not yet made use. The moment I have made use of it, by eating the strawberries, the value will disappear. The service will vanish and have no trace of value behind. The very same thing holds of personal services. The consumer makes the value disappear, for it has been created only for that purpose. It is of little consequence, as regards the principle of value, whether the service is undertaken to satisfy a want to-day, to-morrow, or a year hence.

Take another case. I am afflicted with a cataract. I call in an oculist. The instrument he makes use of has value, because it has durability; the operation he performs, it is said, has none, and yet I pay for it, and I have made choice of one among many rival operators, and arranged his remuneration beforehand. To maintain that this service has no value is to run counter to notorious facts and notions universally received. And of what use, I would ask, is a theory which, far from taking universal practice into account, ignores it altogether?

I would not have the reader suppose that I am carried away by an inordinate love of controversy. If I dwell upon these elementary notions, it is to prepare his mind for consequences of the highest importance, which will be afterwards developed. I know not whether it be to violate the laws of method to indicate these consequences by anticipation, but I venture to depart slightly from the regular course, in order to obviate the danger of becoming tedious. This is the reason why I have spoken prematurely of Property and Community; and for the same reason I shall here say a word respecting Capital.

As Adam Smith made value to reside in matter, he could not conceive Capital as existing otherwise than in an accumulation of material objects. How, then, can we attribute Value to Services not susceptible of being accumulated or converted into capital?

Among the different descriptions of Capital, we give the first place to tools, machines, instruments of labour. They serve to make natural forces co-operate in the work of production, and, attributing to these forces the faculty of creating value, people were led to imagine that instruments of labour, as such, were endowed with the same faculty, independently of any human services. Thus the spade, the plough, the steam-engine, were supposed to co-operate simultaneously with natural agents and human forces in creating not only Utility, but Value also. But all value is remunerated by exchange. Who, then, is to receive that portion of value which is independent of all human service? [p158]

It is thus that the school of Proudhon, after having brought the rent of land into question, has contested also the interest of capital—a larger thesis, because it includes the other. I maintain that the Proudhonian error, viewed scientifically, has its root in the prior error of Adam Smith. I shall demonstrate that capital, like natural agents, considered in itself, and with reference to its own proper action, creates utility, but never creates value. The latter is essentially the fruit of a legitimate service. I shall demonstrate also that, in the social order, capital is not an accumulation of material objects, depending on material durability, but an accumulation of Values, that is to say, of services. This will put an end (virtually at least, by removing its foundation) to the recent attack upon the productiveness of capital, and in a way satisfactory to the objectors themselves; for if I prove that there is nothing in the business of exchange but a mutuality of services, M. Proudhon must own himself vanquished by my victory over his principle.

Labour.—Adam Smith and his disciples have assigned the principle of Value to Labour under the condition of Materiality. This is contrary to the other opinion that natural forces play a certain part in the production of Value. I have not here to combat the contradictions which become apparent in all their fatal consequences when these authors come to discuss the rent of land and the interest of capital.

Be that as it may, when they refer the principle of Value to Labour, they would be very near the truth if they did not allude to manual labour. I have said, in fact, at the beginning of this chapter, that Value must have reference to Effort,—an expression which I prefer to the word Labour, as more general, and embracing the whole sphere of human activity. But I hasten to add that it can spring only from efforts exchanged—from reciprocal Services; because value is not a thing having independent existence, but a relation.

There are then, strictly speaking, two flaws in Adam Smith’s definition. The first is, that it does not take exchange into account, without which value can be neither produced nor conceived. The second is, that it makes use of too restricted a term—labour; unless we give to that term an unusual extension, and include in it the ideas not only of intensity and duration, but of skill, sagacity, and even of good or bad fortune.

The word service, which I substitute in my definition, removes these defects. It implies, necessarily, the idea of transmission, for no service can be rendered which is not received; and it implies [p159] also the idea of Effort, without taking for granted that the value is proportionate.

It is in this, above all, that the definition of the English Economists is vicious. To say that Value resides in Labour induces us to suppose that Value and Labour are proportional, and serve as reciprocal measures of each other. This is contrary to fact, and a definition which is contrary to fact must be defective.

It often happens that an exertion, considered insignificant in itself, passes with the world as of enormous value. (Take, for example, the diamond, the performance of the prima donna, a dash of a banker’s pen, a fortunate privateering adventure, a touch of Raphael’s pencil, a bull of plenary indulgence, the easy duty of an English queen, etc.) It still more frequently happens that laborious and overwhelming labour tends to what is absolutely valueless; and if it be so, how can we establish co-relation and proportion between Value and Labour?

My definition removes the difficulty. It is clear that in certain circumstances one can render a great service at the expense of a very small exertion, and that in others, after great exertion, we render no service at all. And this is another reason why, in this respect, it is correct to say that the Value is in the Service rendered, rather than in the Labour bestowed, seeing that it bears proportion to the one and not to the other.

I go further. I affirm that value is estimated as much by the labour saved to the recipient as by the labour performed by the cédant [the man who cedes or makes it over]. Let the reader recall the dialogue which we supposed to take place between the two parties who bargained for the diamond. In substance, it has reference to no accidental circumstances, but enters, tacitly, into the essence and foundation of all transactions. Keep in mind that we here take for granted that the two parties are at entire liberty to exercise their own will and judgment. Each of them, in making the exchange, is determined by various considerations, among which we must certainly rank, as of the greatest importance, the difficulty experienced by the recipient in procuring for himself, by a direct exertion, the satisfaction which is offered to him. Both parties have their eyes on that difficulty, the one with the view of being more yielding, the other with the view of being more exacting. The labour undergone by the cédant also exerts an influence on the bargain. It is one of the elements of it, but it is not the only one. It is not, then, exact to say that value is determined by labour. It is determined by a multitude of considerations, all comprised in the word service. [p160]

What may be affirmed with great truth is this; that, in consequence of competition, Value tends to become more proportioned to Effort—recompense to merit. It is one of the beautiful Harmonies of the social state. But, as regards Value, this equalizing pressure exercised by competition is quite external, and it is not allowable in strict logic to confound the influence which a phenomenon undergoes, from an external cause, with the phenomenon itself.34

Utility.—J. B. Say, if I am not mistaken, was the first who threw off the yoke of materiality. He made out value very expressly [p161] to be a moral quality,—an expression which perhaps goes too far, for value can scarcely be said to be either a physical or a moral quality—it is simply a relation.

But the great French Economist has himself said, that “It is not given to any one to reach the confines of science, and Philosophers mount on each other’s shoulders to explore a more and more extended horizon.” Perhaps the glory of M. Say (in what regards the special question with which we are now occupied, for his titles to glory in other respects are as numerous as they are imperishable) is to have bequeathed to his successors a view of the subject which is prolific and suggestive.

M. Say’s principle was this—“Value is founded on Utility.”

If we had here to do with utility as connected with human services, I should not contest this principle. At most I could only observe that it is superfluous, as being self-evident. It is very clear, as matter of fact, that no one consents to remunerate a service, unless right or wrong, he judges it to be useful. The word service includes the idea of utility—so much so that it is nothing else than a literal reproduction of the Latin word uti; in French, servir.

But, unfortunately, it is not in this sense that Say understands it. He discovers the principle of value not only in human services, rendered by means of material things, but in the useful qualities put by nature into the things themselves. In this way he places himself once more under the yoke of materiality, and is very far, we are obliged to confess, from clearing away the mist in which the English Economists had enveloped the question of Property.

Before discussing Say’s principle on its own merits, I must explain its logical bearing, in order to avoid the reproach of landing myself and the reader in an idle discussion.

We cannot doubt that the Utility of which Say speaks is that which resides in material objects. If corn, timber, coal, broad cloth, have value, it is because these products possess qualities which render them proper for our use, fit to satisfy the want we experience of food, fuel, and clothing.

Hence, as nature has created Utility, it is inferred that she has created also Value—a fatal confusion of ideas, out of which the enemies of property have forged a terrible weapon.

Take a commodity, corn for example. I purchase it at the Halle au Blé for sixteen francs. A great portion of these sixteen francs is distributed—in infinite ramifications, and an inextricable complication of advances and reimbursements—among all the men, [p162] here or abroad, who have co-operated in furnishing this corn. Part goes to the labourer, the sower, the reaper, the thrasher, the carter,—part to the blacksmith and plough-wright, who have prepared the agricultural implements. Thus far all are agreed, whether Economists or Communists.

But I perceive that four out of the sixteen francs go to the proprietor of the soil, and I have a good right to ask if that man, like the others, has rendered me a Service to entitle him incontestably, like them, to remuneration.

According to the doctrine which the present work aspires to establish, the answer is categorical. It consists of a peremptory yes. The proprietor has rendered me a service. What is it? This, that he has by himself, or his ancestor, cleared and enclosed the field—he has cleared it of weeds and stagnant water—he has enriched and thickened the vegetable mould—he has built a house and a homestead. All this presupposes much labour executed by him in person; or, what comes to the same thing, by others whom he has paid. These are services, certainly, which, according to the just law of reciprocity, must be reimbursed to him. Now, this proprietor has never been remunerated, at least to the full extent. He cannot be so by the first man who comes to buy from him a bag of corn. What is the arrangement, then, that takes place? Assuredly the most ingenious, the most legitimate, the most equitable arrangement which it is possible to imagine. It consists in this—That whoever wishes to purchase a sack of corn shall pay, besides the services of the various labourers whom we have enumerated, a small portion of the services rendered by the proprietor. In other words, the Value of the proprietor’s services is spread over all the sacks of corn which are produced by this field.

Now, it may be asked if the supposed remuneration of four francs be too great or too small. I answer that Political Economy has nothing to do with that. That science establishes that the value of the services rendered by the landed proprietor are regulated by exactly the same laws as the value of other services, and that is enough.

It may be a subject of surprise, too, that this bit-by-bit reimbursement should not at length amount to a complete liquidation, and, consequently, to an extinction of the proprietor’s claim. They who make this objection do not reflect that it is of the nature of Capital to produce a perpetual return, as we shall see in the sequel.

I shall not dwell longer on that question in this place; and shall [p163] simply remark, that there is not in the entire price of the corn a single farthing which does not go to remunerate human services,—not one which corresponds to the value that nature is supposed to have given to the corn by imparting to it utility.

But if, adhering to the principle of Say and the English Economists, you assert that, of the sixteen francs, there are twelve which go to the labourers, sowers, reapers, carters, etc.—two which recompense the personal services of the proprietor; and finally, that there are two others which represent a value which has for its foundation the utility created by God, by natural agents, and without any co-operation of man, do you not perceive that you immediately lay yourself open to be asked, Who is to profit by this portion of value? Who has a title to this remuneration? Nature does not demand it, and who dare take nature’s place.

The more Say tries to explain Property on this hypothesis, the more he exposes himself to attack. He sets out by justly comparing nature to a laboratory, in which various chemical operations take place, the result of which is useful to man. “The soil, then,” he adds, “is the producer of utility, and when IT (the soil) receives payment in the form of a profit or a rent to its proprietor, it is not without giving something to the consumer in exchange for what he pays IT (the soil). It (still the soil) gives him the utility it has produced, and it is in producing this utility that the earth is productive as well as labour.”

This assertion is unmistakable. Here we have two pretenders, who present themselves to share the remuneration due by the consumer of corn—namely, the earth and labour. They urge the same title, for the soil, M. Say affirms, is productive as well as labour. Labour asks to be remunerated for a service; the soil demands to be remunerated for a utility, and this remuneration it demands not for itself (for in what form should we give it?) but for its proprietor.

Whereupon Proudhon summons the proprietor, who represents himself as having the powers of the soil at his disposal, to exhibit his title.

You wish me to pay; in other words, to render a service, in order that I may receive the utility produced by natural agents, independently of the assistance of man, already paid for separately.

But, I ask again, Who is to profit by my service?

Is it the producer of utility,—that is to say, the soil? That is absurd—the fear of any demand from that quarter need give no great uneasiness. [p164]

Is it man? but by what title does he demand it? If for having rendered me a service, well and good. In that case, we are at one. It is the human service which has value, not the natural service; and that is just the conclusion to which I desire to bring you.

That, however, is contrary to your hypothesis. You say that all the human services are remunerated with fourteen francs, and that the two francs which make up the price of the corn correspond to the value created by nature. In that case, I repeat my question—By what title does any one present himself to receive them? Is it not, unfortunately, too clear that if you give specially the name of proprietor to the man who claims right to these two francs, you justify the too famous saying that Property is theft?

And don’t imagine that this confusion between utility and value shakes only the foundation of landed property. After having led you to contest the rent of land, it leads you to contest also the interest of capital.

In fact, machines, the instruments of labour, are, like the soil, producers of utility. If that utility has value, it is paid for, for the word value implies right to payment. But to whom is the payment made? To the proprietor of the machine, without doubt. Is it for a personal service? Then say at once that the value is in the service. But if you say that it is necessary to make a payment first for the service, and a second payment for the utility produced by the machine independently of the human action, which has been already recompensed, then I ask you to whom does this second payment go, and how has the man who has been already remunerated for all his services a right to demand anything more?

The truth is, that the utility which is produced by nature is gratuitous, and therefore common, like that produced by the instruments of labour. It is gratuitous and common on one condition, that we take the trouble, that we render ourselves the service of appropriating it; or, if we give that trouble to or demand that service from another, that we cede to him in return an equivalent service. It is in these services, thus compared, that value resides, and not at all in natural utility. The exertion may be more or less great—that makes a difference in the value, not in the utility. When we stand near a spring, water is gratuitous for us all on condition that we stoop to lift it. If we ask our neighbour to take that trouble for us, then a convention, a bargain, a value makes its appearance, but that does not make the water otherwise than gratuitous. If we are an hour’s walk from the spring, the basis of the transaction will be different; but the difference is one of degree, not of principle. The value has not, on that account, passed into [p165] the water or into its utility. The water continues still gratuitous on condition of fetching it, or of remunerating those who, by a bargain freely made and discussed, agree to spare us that exertion by making it themselves.

It is the same thing in every case. We are surrounded by utilities, but we must stoop to appropriate them. That exertion is sometimes very simple, and often very complicated. Nothing is more easy, in the general case, than to draw water, the utility of which has been prepared by nature beforehand. It is not so easy to obtain corn, the utility of which nature has equally prepared. This is why these two efforts differ in degree though not in principle. The service is more or less onerous; therefore more or less valuable—the utility is, and remains always, gratuitous.

Suppose an instrument of labour to intervene, what would be the result? That the utility would be more easily obtained. The service has thus less value. We certainly pay less for our books since the invention of printing. Admirable phenomenon, too little understood! You say that the instruments of labour produce Value—you are mistaken—it is Utility, and gratuitous Utility, you should say. As to Value, instead of producing it, they tend more and more to annihilate it.

It is quite true that the person who made the machine has rendered a service. He receives a remuneration by which the value of the product is augmented. This is the reason why we fancy we recompense the utility which the machine produces. It is an illusion. What we remunerate is the services which all those who have co-operated in making and working the machine have rendered to us. So little does the value reside in the utility produced, that even after having recompensed these new services, we acquire the utility on easier and cheaper terms than before.

Let us accustom ourselves to distinguish Utility from Value. Without this there can be no Economic science. I give utterance to no paradox when I affirm that Utility and Value, so far from being identical, or oven similar, are ideas opposed to one another. Want, Effort, Satisfaction: here we have man regarded in an Economic point of view. The relation of utility is with Want and Satisfaction. The relation of Value is with Effort. Utility is the Good, which puts an end to the want by the satisfaction. Value is the Evil, for it springs from the obstacle which is interposed between the want and the satisfaction. But for these obstacles, there would have been no Effort either to make or in exchange; Utility would be infinite, gratuitous, and common, without condition, and the notion of Value would never have [p166] entered into the world. In consequence of these obstacles, Utility is gratuitous only on condition of Efforts exchanged, which, when compared with each other, give rise to Value. The more these obstacles give way before the liberality of nature and the progress of science, the more does utility approximate to the state of being absolutely common and gratuitous, for the onerous condition, and, consequently, the value, diminish as the obstacles diminish. I shall esteem myself fortunate if, by these dissertations, which may appear subtle, and of which I am condemned to fear at once the length and the conciseness, I succeed in establishing this encouraging truth—the legitimate property of value,—and this other truth, equally consoling—the progressive community of utility.

One observation more. All that serves us is useful (uti, servir), and in this respect it is extremely doubtful whether there be anything in the universe (whether in the shape of forces or materials) which is not useful to man.

We may affirm at least, without fear of mistake, that a multitude of things possess a utility which is unknown to us. Were the moon placed either higher or lower than she is, it is very possible that the inorganic kingdom, consequently the vegetable kingdom, consequently also the animal kingdom, might be profoundly modified. But for that star which shines in the firmament while I write, it may be that the human race had not existed. Nature has surrounded us with utilities. The quality of being useful we recognise in many substances and phenomena;—in others, science and experience reveal it to us every day,—in others, again, it may exist in perfection, and yet we may remain for ever ignorant of it.

When these substances and phenomena exert upon us, but independently of us, their useful action, we have no interest in comparing the degree of their utility to mankind; and, what is more, we have scarcely the means of making the comparison. We know that oxygen and azote are useful to us, but we don’t try, and probably we should try in vain, to determine in what proportion. We have not here the elements of appreciation—the elements of value. I should say as much of the salts, the gases, the forces which abound in nature. When all these agents are moved and combined so as to produce for us, but without our co-operation, utility, that utility we enjoy without estimating its value. It is when our co-operation comes into play, and, above all, when it comes to be exchanged,—it is then, and then only, that Estimation and Value make their appearance, in connexion not with the utility of the substances or phenomena, of which we are often ignorant, but with the co-operation itself. [p167]

This is my reason for saying that “Value is the appreciation of services exchanged.” These services may be very complicated; they may have exacted a multitude of operations recent or remote; they may be transmitted from one generation or one hemisphere to another generation or another hemisphere, embracing countless contracting parties, necessitating credits, advances, various arrangements, until a general balance is effected. But the principle of value is always in the services, and not in the utility of which these services are the vehicle,—utility which is gratuitous in its nature and essence, and which passes from hand to hand, if I may be allowed the expression, into the bargain.

After all, if you persist in seeing in Utility the foundation of Value, I am very willing, but it must be distinctly understood that it is not that utility which is in things and phenomena by the dispensation of Providence or the power of art, but the utility of human services compared and exchanged.

Rarity.—According to Senior, of all the circumstances which determine value, rarity is the most decisive. I have no objection to make to that remark, if it is not that the form in which it is made presupposes that value is inherent in things themselves—a hypothesis the very appearance of which I shall always combat. At bottom, the word rarity, as applied to the subject we are now discussing, expresses in a concise manner this idea, that, cæteris paribus, a service has more value in proportion as we have more difficulty in rendering it to ourselves; and that, consequently, a larger equivalent is exacted from us when we demand it from another. Rarity is one of these difficulties. It is one obstacle more to be surmounted. The greater it is, the greater remuneration do we award to those who surmount it for us. Rarity gives rise frequently to large remunerations, and this is my reason for refusing to admit with the English Economists that Value is proportional to Labour. We must take into account the parsimony with which nature treats us in certain respects. The word service embraces all these ideas and shades of ideas.

Judgment.—Storch sees value in the judgment by which we recognise it. Undoubtedly, whenever we have to do with relation, it is necessary to compare and to judge. Nevertheless, the relation is one thing and the judgment is another. When we compare the height of two trees, their magnitude, and the difference of their magnitude, are independent of our appreciation.

But in the determination of value, what is the relation of which we have to form a judgment? It is the relation of two services exchanged. The business is to discover what the services rendered [p168] are worth in relation to those received, in connexion with acts or things exchanged, and taking all circumstances into account,—not what intrinsic utility resides in these acts or things, for this utility may, to some extent, be altogether independent of human exertion, and, consequently, devoid of value.

Storch falls into the error which I am now combating when he says,—

“Our judgment enables us to discover the relation which exists between our wants and the utility of things. The determination which our judgment forms upon the utility of things constitutes their value.”

And, farther on, he says,—

“In order to create a value, we must have the conjunction of these three circumstances:—1st, That man experiences or conceives a want; 2d, That there exists something calculated to satisfy that want; and, 3d, That a judgment is pronounced in favour of the utility of the thing. Then the value of things is their relative utility.”

During the day I experience the want of seeing clearly. There exists one thing calculated to satisfy that want—namely, the light of the sun. My judgment pronounces in favour of the utility of that thing, and . . . it has no value. Why? Because I enjoy it without calling for the services of any one.

At night I experience the same want. There exists one thing capable of satisfying it very imperfectly, a wax candle. My judgment pronounces in favour of the utility, but far inferior utility, of that thing—and it has value. Why? Because the man who has taken the trouble to make the candle will not give it to me except upon condition of my rendering him an equivalent service.

What we have, then, to compare and to judge of, in order to determine Value, is not the relative utility of things, but the relation of two services.

On these terms, I do not reject Storch’s definition.

Permit me to recapitulate a little, in order to show clearly that my definition contains all that is true in the definitions of my predecessors, and eliminates everything in them which is erroneous either through excess or defect.

The principle of Value, we have seen, resides in a human service, and results from the appreciation of two services compared.

Value must have relation to Effort. Service implies a certain Effort.

Value supposes a comparison of Efforts exchanged, at least exchangeable. Service implies the terms to give and to receive. [p169]

Value is not, however, in fact proportional to the intensity of the Efforts. Service does not necessarily imply that proportion.

A multitude of external circumstances influence value without constituting value itself. The word service takes all these circumstances in due measure into account.

Materiality.—When the service consists in transferring a material thing, nothing hinders us from saying, by metonymy, that it is the thing which has value. But we must not forget that this is a figure of speech, by which we attribute to things themselves the value of the services which produced them.

Conservability.—Without reference to the consideration of materiality, value endures until the satisfaction is obtained, and no longer. Whether the satisfaction follows the effort more or less nearly—whether the service is personal or real, makes no change in the nature of value.

Capability of Accumulation.—In a social point of view, what is accumulated by saving is not matter, but value or services.35

Utility.—I admit, with M. Say, that Utility is the foundation of Value, provided it is granted me that we have no concern with the utility which resides in commodities, but with the relative utility of services.

Labour.—I admit, with Ricardo, that Labour is the foundation of Value, provided, first of all, the word labour is taken in the most general sense, and that you do not afterwards assert a proportionality which is contrary to fact; in other words, provided you substitute for the word labour the word service.

Rarity.—I admit, with Senior, that rarity influences value. But why? Because it renders the service so much more precious.

Judgment.—I admit, with Storch, that value results from a judgment formed, provided it is granted me that the judgment so formed is not upon the utility of things, but on the utility of services.

Thus I hope to satisfy Economists of all shades of opinion. I [p170] admit them all to be right, because all have had a glimpse of the truth in one of its aspects. Error is no doubt on the reverse of the medal; and it is for the reader to decide whether my definition includes all that is true, and rejects all that is false.

I cannot conclude without saying a word on that quadrature of Political Economy—the measure of value; and here I shall repeat, and with still more force, the observation with which I terminated the preceding chapters.

I said that our wants, our desires, our tastes, have neither limit nor exact measure.

I said also that our means of providing for our wants—the gifts of nature, our faculties, activity, discernment, foresight—had no precise measure. Each of these elements is variable in itself—it differs in different men—it varies from hour to hour in the same individual,—so that the whole forms an aggregate which is mobility itself.

If, again, we consider what the circumstances are which influence value—utility, labour, rarity, judgment—and reflect that there is not one of these circumstances which does not vary ad infinitum, we may well ask why men should set themselves so pertinaciously to try to discover a fixed measure of Value?

It would be singular, indeed, if we were to find fixity in a mean term composed of variable elements, and which is nothing else than a Relation between two extreme terms more variable still!

The Economists, then, who go in pursuit of an absolute measure of value are pursuing a chimera; and, what is more, a thing which, if found, would be positively useless. Universal practice has adopted gold and silver as standards, although practical men are not ignorant how variable is the value of these metals. But of what importance is the variability of the measure, if, affecting equally and in the same manner the two objects which are exchanged, it does not interfere with the fairness and equity of the exchange? It is a mean proportional, which may rise or fall, without, on that account, failing to perform its office, which is to show the Relation of two extremes.

The design of the science is not, like that of exchange, to discover the present Relation of two services, for, in that case, money would answer the purpose in view. What the science aims at discovering is the Relation between Effort and Satisfaction; and for this purpose, a measure of value, did it exist, would teach us nothing, for the effort brings always to the satisfaction a varying proportion of gratuitous utility which has no value. It is because this element of our well-being has been lost sight of that the [p171] majority of writers have deplored the absence of a measure of Value. They have not reflected that it would not enable them to answer the question proposed—What is the comparative Wealth or prosperity of two classes, of two countries, of two generations?

In order to resolve that question, the science would require a measure which should reveal to it not only the relation of two services, which might be the vehicle of very different amounts of gratuitous utility, but the relation of the Effort to the Satisfaction, and that measure could be no other than the effort itself, or labour.

But how can labour serve as a measure? Is it not itself a most variable element? Is it not more or less skilful, laborious, precarious, dangerous, repugnant? Does it not require, more or less, the intervention of certain intellectual faculties, of certain moral virtues? and, according as it is influenced by these circumstances, is it not rewarded by a remuneration which is in the highest degree variable?

There is one species of labour which, at all times, and in all places, is identically the same, and it is that which must serve as a type. I mean labour the most simple, rude, primitive, muscular,—that which is freest from all natural co-operation—that which every man can execute—that which renders services of a kind which one can render to himself—that which exacts no exceptional force or skill, and requires no apprenticeship,—industry such as is found in the very earliest stages of society: the work, in short, of the simple day-labourer. That kind of labour is everywhere the most abundantly supplied, the least special, the most homogeneous, and the worst remunerated. Wages in all other departments are proportioned and graduated on this basis, and increase with every circumstance which adds to its importance.

If, then, we wish to compare two social states with each other, we cannot have recourse to a standard of value, and for two reasons, the one as logical as the other—first, because there is none; and, secondly, because, if there were, it would give a wrong answer to our question, neglecting, as it must, a considerable and progressive element in human prosperity—gratuitous utility.

What we must do, on the contrary, is to put Value altogether out of sight, particularly the consideration of money; and ask the question, What, in such and such a country, and, at such and such an epoch, is the amount of each kind of special utility, and the sum total of all utilities, which correspond to a given amount of unskilled labour? In other words, what amount of material comfort and prosperity can an unskilled workman earn as the reward of his daily toil? [p172]

We may affirm that the natural social order is harmonious, and goes on improving, if, on the one hand, the number of unskilled labours, receiving the smallest possible remuneration, continues to diminish; and if, on the other, that remuneration, measured not in value or in money, but in real satisfactions, continues constantly on the increase.36

The ancients have well described all the combinations of Exchange:—

Do ut des (commodity against commodity), Do ut facias (commodity against service), Facio ut des (service against commodity), Facio ut facias (service against service).37

Seeing that products and services are thus exchanged for one another, it is quite necessary that they should have something in common, something by which they can be compared and estimated—namely, Value.

But value is always identically the same. Whether it be in the product or in the service, it has always the same origin and foundation.

This being so, we may ask, is Value originally and essentially in the commodity, and is it only by analogy that we extend the notion to the service?

Or, on the contrary, does Value reside in the service, and is it not mixed up and amalgamated with the product, simply and exclusively because the service is so?

Some people seem to think that this is a question of pure subtilty. We shall see by-and-by. At present I shall only observe, that it would be strange if, in Political Economy, a good or a bad definition of Value were a matter of indifference.

I cannot doubt that, at the outset, Political Economists thought they discovered value rather in the product, as such, than in the matter of the product. The Physiocrates [the Économistes of Quesnay’s school] attributed value exclusively to land, and stigmatized as sterile such classes as added nothing to matter,—so strictly in their eyes were value and matter bound up together.

Adam Smith ought to have discarded this idea, since he makes value flow from labour. Do not pure services, services per se, exact labour, and, consequently, do they not imply value? Near to the truth as Smith had come, he did not make himself master of it; for, besides pronouncing formally that labour, in order to possess value, must be applied to matter, to something physically [p173] tangible and capable of accumulation, we know that, like the Physiocrates, he ranked those who simply render services among the unproductive classes.

These classes, in fact, occupy a prominent position in the Wealth of Nations. But this only shows us that the author, after having given a definition, found himself straitened by it, and, consequently, that that definition is erroneous. Adam Smith would not have gained his great and just renown had he not written his magnificent chapters on Education, on the Clergy, and on Public Services, and if he had, in treating of Wealth, confined himself within the limits of his own definition. Happily, by this inconsistency, he freed himself from the fetters which his premises imposed upon him. This always happens. A man of genius who sets out with a false principle never escapes inconsistency, without which he would get deeper and deeper into error, and, far from appearing a man of genius, would show himself no longer a man of sense.

As Adam Smith advanced a step beyond the Physiocrates, Jean Baptiste Say advanced a step beyond Smith. By degrees Say was led to refer value to services, but only by way of analogy. It is in the product that he discovers true value, and nothing shows this better than his whimsical denomination of services as “immaterial products”—two words which absolutely shriek out on finding themselves side by side. Say, in the outset, agrees with Smith; for the entire theory of the master is to be found in the first ten lines of the work of the disciple.38 But he thought and meditated on the subject for thirty years, and he made progress. He approximated more and more to the truth, without ever fully attaining it.

Moreover, we might have imagined that Say did his duty as an Economist as well by referring the value of the service to the product, as by referring the value of the product to the service, if the Socialist propaganda, founding on his own deductions, had not come to reveal to us the insufficiency and the danger of his principle.

The question I propose, then, is this:—Seeing that certain products are possessed of value, seeing that certain services are possessed of value, and seeing that value is one and identical, and can have but one origin, one foundation, one explanation,—is this origin, this explanation to be found in the product or in the service?

The reply to that question is obvious, and for this unanswerable [p174] reason, that every product which has value implies service, but every service does not necessarily imply a product.

This appears to me mathematically certain—conclusive.

A service, as such, has value, whether it assume a material form or not.

A material object has value if, in transferring it to another, we render him a service,—if not, it has no value.

Then value does not proceed from the material object to the service, but from the service to the material object.

Nor is this all. Nothing is more easily explained than this pre-eminence, this priority, given to the service over the product, so far as value is concerned. We shall immediately see that this is owing to a circumstance which might have been easily perceived, but which has not been observed, just because it is under our eyes. It is nothing else than that foresight which is natural to man, and in virtue of which, in place of limiting himself to the services which are demanded of him, he prepares himself beforehand to render those services which he foresees are likely to be demanded. It is thus that the facio ut facias transforms itself into the do ut des, without its ceasing to be the dominant fact which explains the whole transaction.

John says to Peter, I want a cup. I could make it for myself, but if you will make it for me, you will render me a service, for which I will pay you by an equivalent service.

Peter accepts the offer, and, in consequence, sets out in quest of suitable materials, mixes them, manipulates them, and, in fine, makes the article which John wants.

It is very evident that here it is the service which determines the value. The dominant word in the transaction is facio. And if, afterwards, the value is incorporated with the product, it is only because it flows from the service, which combines the labour executed by Peter with the labour saved to John.

Now, it may happen that John may make frequently the same proposal to Peter, and that other people may also make it; so that Peter can foresee with certainty the kind of services which will be demanded of him, and prepare himself for rendering them. He may say, I have acquired a certain degree of skill in making cups. Experience tells me that cups supply a want which must be satisfied, and I am therefore enabled to manufacture them beforehand.

Henceforth John says no longer to Peter, facio ut facias, but facio ut des. If he in turn has foreseen the wants of Peter, and laboured beforehand to provide for them, he can then say do ut des. [p175]

But in what respect, I ask, does this progress, which flows from human foresight, change the nature and origin of value? Does service cease to be its foundation and measure? As regards the true idea of value, what difference does it make whether Peter, before he makes the cup, waits till there is a demand for it, or, foreseeing a future demand, manufactures the article beforehand?

There is another remark which I would make here. In human life, inexperience and thoughtlessness precede experience and foresight. It is only in the course of time that men are enabled to foresee each other’s wants, and to make preparations for satisfying them. Logically, the facio ut facias must precede the do ut des. The latter is at once the fruit and the evidence of a certain amount of knowledge diffused, of experience acquired, of political security obtained, of a certain confidence in the future,—in a word, of a certain degree of civilisation. This social prescience, this faith in a future demand, which causes us to provide a present supply; this sort of intuitive acquaintance with statistics which each possesses in a greater or less degree, and which establishes a surprising equilibrium between our wants and the means of supplying them, is one of the most powerful and efficacious promoters of human improvement. To it we owe the division of labour, or at least the separation of trades and professions. To it we owe one of the advantages which men seek for with the greatest ardour, the fixity of remuneration, under the form of wages as regards labour, and interest as regards capital. To it we are indebted for the institution of credit, transactions having reference to the future, those which are designed to equalize risk, etc. It is surprising, in an Economical point of view, that this noble attribute of man, Foresight, has not been made more the subject of remark. This arises, as Rousseau has said, from the difficulty we experience in observing the medium in which we live and move, and which forms our natural atmosphere. We notice only exceptional appearances and abnormal facts, while we allow to pass unperceived those which act permanently around us, upon us, and within us, and which modify profoundly both individual men and society at large.

To return to the subject which at present engages us. It may be that human foresight, in its infinite diffusion, tends more and more to substitute the do ut des for the facio ut facias; but we must never forget that it is in the primitive and necessary form of exchange that the notion of value first makes its appearance, that this primitive form is that of reciprocal service; and that, after all, [p176] as regards exchange, the product is only a service foreseen and provided for.

But although I have shown that value is not inherent in matter, and cannot be classed among its attributes, I am far from maintaining that it does not pass from the service to the product, so as (if I may be allowed the expression) to become incorporated with it. I hope my opponents will not believe that I am pedant enough to wish to exclude from common language such phrase as these—gold has value, wheat has value, land has value. But I have a right to demand of science why this is so? and if I am answered, because gold, wheat, and land possess in themselves intrinsic value, then I think I have a right to say—“You are mistaken, and your error is dangerous. You are mistaken, for there are gold and land which are destitute of value, gold and land which have not yet had any human labour bestowed upon them. Your error is dangerous, for it leads men to regard what is simply a right to a reciprocity of services as a usurpation of the gratuitous gifts of God.”

I am quite willing, then, to acknowledge that products are possessed of value, provided you grant me that it is not essential to them, and that it attaches itself to services, and proceeds from them.

This is so true, that a very important consequence, and one which is fundamental in Political Economy, flows from it—a consequence which has not been, and indeed could not be remarked. It is this:—

Where value has passed from the service to the product, it undergoes in the product all the risks and chances to which it is subject in the service itself.

It is not fixed in the product, as it would have been had it been one of its own intrinsic qualities. It is essentially variable; it may rise indefinitely, or it may fall until it disappears altogether, just as the species of service to which it owes its origin would have done.

The man who makes a cup to-day for the purpose of selling it a year hence, confers value on it, and that value is determined by that of the service—not the value which the service possesses at the present moment, but that which it will possess at the end of the year. If at the time when the cup comes to be sold such services are more in demand, the cup will be worth more, or it will be depreciated in the opposite case.

This is the reason why man is constantly stimulated to exercise foresight, in order to turn it to account. He has always in [p177] perspective a possible rise or fall of value,—a recompense for just and sagacious prevision, and chastisement when it is erroneous. And, observe, his success or failure coincides with the public good or the public detriment. If his foresight has been well directed, if he has made preparations beforehand to give society the benefit of services which are more in request, more appreciated, more efficacious, which supply more adequately wants which are deeply felt, he has contributed to diminish the scarcity, to augment the abundance, of that description of service, and to bring it within the reach of a greater number of persons at less expense. If, on the other hand, he is mistaken in his calculations for the future, he contributes, by his competition, to depress still farther those services for which there is little demand. He only effects, and at his own expense, a negative good,—he advertises the public that a certain description of wants no longer call for the exertion of much social activity, which activity must now take another direction, or go without recompense.

This remarkable fact—that value, incorporated in a product, depends on the value of the kind of service to which it owes its origin—is of the very highest importance, not only because it demonstrates more and more clearly the theory that the principle of value resides in the service, but because it explains, easily and satisfactorily, phenomena which other systems regard as abnormal and exceptional.

When once the product has been thrown upon the market of the world, do the general tendencies of society operate towards elevating or towards depressing its value? This is to ask whether the particular kind of services which have engendered this value are liable to become more or less appreciated, and better or worse remunerated. The one is as possible as the other, and it is this which opens an unlimited field to human foresight.

This we may remark at least, that the general law of beings, capable of making experiments, of acquiring information, and of rectifying mistakes, is progress. The probability, then, is, that at any given period a certain amount of time and pains will effect greater results than were effected by the same agency at an anterior period: whence we may conclude that the prevailing tendency of value, incorporated with a commodity, is to fall. If, for example, we suppose the cup which I took by way of illustration, and as a symbol of other products, to have been made many years ago, the probability is that it has undergone depreciation, inasmuch as we have at the present day more resources for the manufacture of such articles, more skill, better tools, capital [p178] obtained on easier terms, and a more extended division of labour. In this way the person who wishes to obtain the cup does not say to its possessor, Tell me the exact amount of labour (quantity and quality both taken into account) which that cup has cost you, in order that I may remunerate you accordingly. No, he says, Now-a-days, in consequence of the progress of art, I can make for myself, or procure by exchange, a similar cup at the expense of so much labour of such a quality; and that is the limit of the remuneration which I can consent to give you.