PJ^OCEEDTNGS OP SECTION G. 457 



Although Ricardo and Adam Smith did not, at first, suffi- 

 ciently qualify their observations so as to avoid adverse criticism, 

 it is now quite manifest that their ideas regarding the origin of 

 price, and equivalence of exchange values, require very little 

 modification to be accepted as true by the most advanced economic 

 thinkers of the present day. If we simply substitute " Cost of 

 man's services," which embraces variable quality and effectiveness 

 of labour, in place of their original expression, " Quantity of 

 labour," even Guntou, one of the most recent of thorough ex- 

 ponents of the " Primary law of price," would give assent to 

 Ricardo's original statement regarding " The equivalence of ex- 

 change values." Ricardo clearly expresses his views as to this 

 equivalence of exchange values in the following words: — 



" The rule which determines how much of one (commodity) shall 

 be given for another depends almost exclusively on the quantity of 

 labour expended on each." Substitute " cost of man's service " 

 for " quantity of labour," and we have the true interpretation of 

 the genesis of econom.ic price, or of the primary law which regu- 

 lates and determines the respective ratios and prices by which 

 commodities and services exchange with each other." (See 

 Appendix I.) 



Ricardo very clearly and succinctly establishes this fundamental 

 truth, as to the origin of value and ratio of exchange, in his Prin- 

 ciples of Political Economy (McCullocli's new edition — 1888 — chap. 

 1, pp. 9, 10) in the following words :- 



" 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 in- 

 creased supply. Some rare picture, 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 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 inclination of those who are desirous to possess 

 them." ... " These commodities, however, form a very 

 small part of the mass of commodities daily exchanged in the 

 market. By far the greatest part of these goods which are the 

 objects of desire are procured by labour; and they may be multi- 

 plied, not in one country alone, but in many, almost without any 

 assignable limit, if we are disposed to bestow the labour necessary 

 to obtain them." 



" In speaking, then, of commodities, of their exchangeable 

 value, and of the laws which regulate their relative prices, we 

 mean always such commodities, only, as can be increased, in quan- 

 tity, by the exertion of human industry, and on the production of 

 which competition operates without restraint." Elsewhere, 

 Ricardo goes on to say ..." That this is really the founda- 

 tion of the exchangeable value of all things, excepting those which 



