491

XXV. _On Currency and Banks_ 499

XXVI. _On the comparative Value of Gold, Corn, and Labour,
in Rich and in Poor Countries_ 527

XXVII. _Taxes paid by the Producer_ 538

XXVIII. _On the Influence of Demand and Supply on Prices_ 542

XXIX. _Mr. Malthus's Opinions on Rent_ 549

CHAPTER I.

ON VALUE.

It has been observed by Adam Smith, that "the word Value has two
different meanings, and sometimes expresses the utility of some
particular object, and sometimes the power of purchasing other goods
which the possession of that object conveys. The one may be called
_value in use_; the other, _value in exchange_. The things," he
continues, "which have the greatest value in use, have frequently little
or no value in exchange; and, on the contrary, those which have the
greatest value in exchange, have little or no value in use." Water and
air are abundantly useful; they are indeed indispensable to existence,
yet, under ordinary circumstances, nothing can be obtained in exchange
for them. Gold, on the contrary, though of little use compared with air
or water, will exchange for a great quantity of other goods.

Utility then is not the measure of exchangeable value, although it is
absolutely essential to it. If a commodity were in no way useful,--in
other words, if it could in no way contribute to our gratification,--it
would be destitute of exchangeable value, however scarce it might be, or
whatever quantity of labour might be necessary to procure it.

Possessing utility, commodities derive their exchangeable value from two
sources: from their scarcity, and from the quantity of labour required
to obtain them.

There are some commodities, the value of which is determined by their
scarcity alone. No labour can increase the quantity of such goods, and
therefore their value cannot be lowered by an increased supply. Some
rare statues and pictures, scarce books and coins, wines of a peculiar
quality, which can be made only from grapes grown on a particular soil,
of which there is a very limited quantity, are all of this description.
Their value is wholly independent of the quantity of labour originally
necessary to produce them, and varies with the varying wealth and
inclinations of those who are desirous to possess them.

These commodi