quantity by the exertion of human industry, and on the produc- 

 tion (and supply) of which competition operates without 

 restraint" a 



Rieardo having thus clearly defined the particular domain 

 in which the Primary Economic Law of Price operates, 

 and to which all illustrations which relate to Value and 

 Price should be strictly confined, b proceeds to disclose the 

 entry of the basil element of all value and price, which, 

 when incorporated in any material substance by means of 

 detached claim or title, such as money wages or other 

 recognised medium of claim, is thereafter itidissolubly united 

 with it as the almost sole measure of its Exchange Value. 

 This basal element of value he discovers in " the comparative 

 quantity (cost?) of labour expended on each" particular 

 commodity, or in maintaining any particular kind of labour 

 service. 



Thus he goes on to observe: — "In the early stages of 

 society the exchangeable value of commodities, or the rule 

 which determines how much of one shall be given in exchange 

 for another, depends almost exclusively on the comparative 

 quantity (cost Y) of labour expended on each." 



The Elemental Ratio or Unit of Exchange. — Rieardo then 

 proceeds to show, by a quotation fiom Adam Smith, which 

 he accepts, that "The real price of everything, what every- 

 thing really costs to the man who wants to acquire it, it the 

 toil and trouble of acquiring it. What everything is really 

 worth to the man who has acquired it, and who wants to 

 dispose of it, or exchange it for something else, is the toil 

 and trouble which it can save to himself, and which it can 



impose upon other people Labour was the first 



price — ihe original purchase-money that was paid for all 

 things." Again, "in that early and rude state of society 

 which precedes both the accumulation of siock and the 

 appropriation of land, the proportion between the quantities 

 of labour necessary for acquiring different objects seem to be 

 the only circumstances which can afford any rule for exchanging 

 them for one another. If among a nation of hunte s, for 

 example, it usually cost twice the labour to kill a beaver 

 which it does to kill a deer, one beaver should naturally 

 exchange for or be worth two deer. It is natural that what 

 is usually the produce of two days' or two hours' labour 



a. Where abnormal conditions come in, crippling the reasonable choice or free- 

 dom or one of me parties — a forced or absolutely necessary exchange— such as in 

 the exchange of Esau's birthright for a, mess of pottage— it might be convenient to 

 define all such exchange value as The Emu Price or the Final Margin of Pur- 

 chasing Power. 



b. The confusion and opposition of Jevon's and other opponents to Ricardo's 

 theory of " The Primary Law of Economic Price " is due largely to a failure on their 

 part to confine their references and illustrations to the true domain in which the 

 Primary Economic Law of Price operates, and to which Rieardo insisted that it 

 should be confined. 



