Year: 1876

Price is term ordinarily used by
political economists TO designate the
value Of any commodity, as express
ed in money. Thus We say that the
price Of bushel Of wheat is two dol
lars, or that the price of pound of
butter is fifty cents. The meaning
is that in the one case two dollars
will buy the wheat, and that in the
other case fifty cents will buy the
butter. Those who have the articles
to sell will exchange them for the
money upon these terms. This mon-
etary value is the nominal value
value thus expressed or value in the
nomenclature Of money. 1t is, more
over, the value of ~hich men usually
think, because money is that one
commodity which exchanges for all
others, and, hence, has a universal
purchasing power.


! What, then, is the cost to the man
who pays the sum, of the two dollars
which he pays for the bushel of wheat
II We can answer this question we
can find what is the real price of the
wheat TO him. Let us suppose that,
in order to get the money, he gave a
days labor; and then the price Of the
wheat, as measured by his labor, is
one day of such labor. He worked a
day for the money and then gave the
money for the wheat. That is to say,
ne really bought the wheat with a
days labor, simply using money as
the medium of exchanging his servi-
ces for the commodity. The real
price to him is the labor price, name
ly, the amount Of toll which he must
undergo to procure the thing he
wants. And what is true in this case
is universally true. Money itself is
the product Of labor. The labor
which it takes to get il is the meas
ure of its value. II it costs nothing,
there is nothing for which it would
be exchangeable.


Adam Smith, in his "Wealth Of
Nations Book l, chapter 81, gives
the following lucid statement of this
great economical principle


The reaiprcc Of everything-what
everything really costs to the man
who wants TO acquire it's the toll
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 toll and trouble
which it can save to himself and
which it can impose upon other peo-
pie. What is bought with money or
with goods is purchased by labor. as
much as what we acquire by the toll
Of our own body. That money or
these goods, indeed, save us this toll
They contain the value of certain
quantity Of labor which we exchange
for what is supposed at the time to
contain the value Of an equal quaint
ty. Labor was the first price, the
original purchase money, that was
paid for all things. II was not by
geld or by silver, but by labor, that
all the wealth Of the world was ori gi-
nally purchased; and its value to
those who possess it, ard who want
TO exchange it for some new produc-
tions, is precisely equal to the guam
tity Of labor which it can enable them
to purchase or command"


The elementary conditions Of pro-
ducing wealth are supplied by nature;
but the wealth itself is always the
product Of labor, either of the man
who has il or Of some one else from
whom he las derived it. All ex-
changes, when traced TO their final
analysis, are really exchanges Of labor
in its products. Men buy and sell
labor in this concrete form. 1t, hence,
follows that the real price which is
paid fer everything is, after all, the
idbor.price.


If We suppose a bushel of wheat to
be worth two dollars to- day and next
year worth but one dollar, and that
at the former period labor brings two
dollars day and but one dollar at
the latter period, then, although the
nominal price of both wheat and la
Dor has greatly changed, there is no
real change in the price of either,
considered relatively to the other
At both periods the same amount of
labor will buy the same quantity of
wheat, and the same quantity of
wheat will buy the same amount of
labor. The only change that has oc
cured is in the monetary expression
Of value. The real price remains the
same.


II, on the other hand, the nominal
or monetary price Of wheat were to
change, without any corresponding
change in the nominal price Of labor,
SO that it would take more or less
than days labor to buy bushel Of
wheat, than the relations between
the labor and the wheat would be al
tered. II the money price of the
wheat went up, it would require more
labor to buy it; and if it went down,
less labor would suffice for the pur-
chase. A raise in commodity prices,
as reckoned in money, without cor
responding rise in wages, is always
an oppressive burden to those who
work for wages. 1t costs them more
to live, with no increase Of means.
When this rise is due to the chsrac-
ter of the money in use, the laborer
is sure TO be one Of the chief suffer-
o.c ne II o1o,.o. xha