to price regulated by what will produce x-all this (which is but the same idea under three different formula) will appear at once by the following reflection : - What is it that Theophrastus imputes to him as the form of his trickery? (whatever might be its drift.) It is that he evaded a question to himself, and turned round upon the company with a question of his own. Now, it is evident that the question of price, when thrown into the negative form as a question about the cost, was a question for him to answer, and not for the company. The cost could be known only to himself. But, when our friend has taken his resolution of translating the onus to the buyers, the only way to accomplish this is by throwing that question about price into a shape which only the company could answer. "Nay, gentleman, how can I tell the value? Every man knows best what pleasure or what benefit he will draw from an article. Do you mind your own business: the cost is my business; but yours is-the worth of the thing for use; for your uses, not for mine." Scamp seems to have the best of it: their benefit from the article could not be affected by the terms on which he had acquired it. And thus even Hellas was up to this elementary distinction.*

* Salmasius subsequently explained his view of the passage in a short paraphrastic commentary, which agrees exactly with the present in pointing to the double form of exchange value, except as to the temper of the vender, whom Salmasius (doubtless warped by the title of the particular chapter in Theophrastus, viz. IIeg

SECTION VII.-MODES OF CAPITAL AS
AFFECTING VALUE.

FINALLY, there arises a modification, first indicated by Ricardo, of value, from the different proportions in which capital, fixed or circulating, predominates in the production of the articles. In this case, it can very often no longer be said that the prices of the resulting articles, according to the general rule of Ricardo, vary as the quantities of the producing labour-a disturbance of that law occurs.

The difference between what is called fixed capital and what is called circulating capital, has often been represented as shifting and shadowy. However, without entering upon that dispute further at this point, it will be sufficient to say, that they may be distinguished essentially. Circulating capital, in its normal idea,

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Avladaras) conceives to be acting in the spirit of insolence. This is part of what Salmasius says, "Superbus et contumax venditor designatur his notis a Theophrasto-qui” [i. e. venditor] merces suas quanti vendat indicare dedignatus, emptorem interrogetquanti valeant, et quo pretio emi dignæ sint ?" True: this is the nature of the substitution which he makes, but not the spirit in which he makes it. Not as disdaining to declare at what price he sells, but fraudulently, as seeing an interest in evading that question, does Scamp transfer the right of question to himself, and the duty of answer, to the other side. He transfers it from negative

value to affirmative.

H

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means any agent whatever used productively which perishes in the very act of being used. Thus, wages are conveniently said to be for a month, a week, or a day; but, in fact, a commensurate moment" of wages perishes upon every instant of time. So of candlelight or gas, so of the porter or drink of any kind allowed by the master of a manufacturing establishment-none of it holds over for a second act of consumption. That part which may accidentally survive, is a part wholly distinct, not concerned at all in the first act. But in fixed capital this is otherwise. The workman's tools hold over from one act of production to a thousandth act. The same identical chisel, saw, grindstone, and not successive parts of them, have operated on many hundreds of cases; and by how much larger has been the range of these iterations, by so much the more intensely is the tool, engine, or machinery, entitled to the denomination of fixed. The leading case under circulating capitalwhat we chiefly think of is wages; the leading case under fixed capital is machinery.

Now, in practice, although one kind of capital often preponderates, rarely is it found altogether to exclude the other. Where wages, for instance, form the main element of cost, there will yet be implements required; and, inversely, the most extensive machines require human vigilance, direction, and sometimes very considerable co-operation. But, though this is always the practical case, for the sake of trying the question, it is

ments.

better to suppose an extreme case, in which alternately the products arise exclusively from a machine, demanding no aid whatever from circulating capital, and again exclusively from human labour, demanding no aid whatever from capital fixed in stationary machines or instruOn such an assumption, Ricardo undertakes to show that the commodities produced in the first case could sustain a far greater fall in price under the same change in the circumstances, and with the same injury (no more and no less) to the manufacturing capitalists, than those produced in the second.

He bids us suppose a case of circulating capital, where, for the production of certain articles, two thousand pounds annually are paid in wages. We are to suppose an opposite case, in which two thousand pounds have been sunk in a very durable machine for producing a particular set of articles. Now, the annual profits will be the same for both parties: say, at ten per cent, two hundred pounds. Consequently we may say of the total products turned out from either establishmentthat they will sell for two thousand two hundred pounds in the first case, for two hundred pounds in the second. Some trifle should be added for current repairs on the machine, and also another trifle as a sinking-fund for replacing the machine finally-yet, as this machine is of variable duration, and in one case calculated to last for a century, both provisions are uncertain, and frequently too inconsiderable to affect the results, so that they may be safely neglected.

Now then, such being the circumstances of the two cases, suppose a rise in wages of two per cent to affect the prices of articles issuing from the first establishment. For a time this is peculiar to that establishment; it does not reach the second at first, because that by the case pays no wages. But at last it reaches the second set of products also, through the rebound upon profits. The two per cent extra on wages will be forty pounds in the whole. Now, the loss upon wages must be borne by profits. But the forty pounds levied upon two hundred pounds will reduce the prices of the articles by that amount, i. e. twenty per cent; whereas the forty pounds levied upon the two thousand two hundred pounds, is simply transferred to the labourers, and the price continues as it was.

The case here imagined by Ricardo, and which is subsequently varied through lower stages of durability, greatly disturbing the violence of the results as to price, is exceedingly important by its tendency. And he goes on to show, what will naturally have suggested itself to the student, that between different sorts of fixed capital there is the same difference of tendency as between fixed and circulating. And why? Because the durability, which forms the ground of the generic distinction between fixed and circulating, varies also, and therefore becomes a ground for a special distinction, between any different orders of the fixed. When a man sows corn, which is intensely circulating capital, he seems absolutely and violently to throw it away. But this eventually