Definitions In Political Economy, - free ebook by T. R. (Thomas Robert) Malthus

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Definitions In Political Economy,

T. R. (Thomas Robert) Malthus

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PREFACE.

PREFACE.

The differences of opinion among political economists have of late been a frequent subject of complaint; and it must be allowed, that one of the principal causes of them may be traced to the different meanings in which the same terms have been used by different writers. The object of the present publication is, to draw attention to an obstacle in the study of political economy, which has now increased to no inconsiderable magnitude. But this could not be done merely by laying down rules for the

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Chapter I. RULES FOR THE DEFINITION AND APPLICATION OF TERMS IN POLITICAL ECONOMY.

Chapter I. RULES FOR THE DEFINITION AND APPLICATION OF TERMS IN POLITICAL ECONOMY.

In a mathematical definition, although the words in which it is expressed may vary, the meaning which it is intended to convey is always the same. Whether a straight line be defined to be a line which lies evenly between its extreme points, or the shortest line which can be drawn between two points, there never can be a difference of opinion as to the lines which are comprehended, and those which are not comprehended, in the definition. The case is not the same with the definitions in the less s

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Chapter II. ON THE DEFINITION OF WEALTH BY THE FRENCH ECONOMISTS.

Chapter II. ON THE DEFINITION OF WEALTH BY THE FRENCH ECONOMISTS.

It will not be worth while to advert to the misnomers of the mercantile system; but the system of the French Economists was a scientific one, and aimed at precision. Yet it must be acknowledged that their definition of wealth violated the first and most obvious rule which ought to guide men of science, as well as others, in the use of terms. Wealth and riches are words in the commonest use; and though all persons might not be able at once to describe with accuracy what they mean when they speak

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Chapter III. ON THE DEFINITION AND APPLICATION OF TERMS BY ADAM SMITH.

Chapter III. ON THE DEFINITION AND APPLICATION OF TERMS BY ADAM SMITH.

In adverting to the terms and definitions of Adam Smith, in his “Wealth of Nations,” I think it will be found that he has less frequently and less strikingly deviated from the rules above laid down, and that he has more constantly and uniformly kept in view the paramount object of explaining in the most intelligible manner the causes of the wealth of nations, according to the ordinary acceptation of the expression, than any of the subsequent writers in the science, who have essentially differed

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Chapter IV. APPLICATION OF THE TERM UTILITY BY M. SAY.

Chapter IV. APPLICATION OF THE TERM UTILITY BY M. SAY.

It would lead me too far and into too many repetitions, if I were to go through the principal definitions of the continental political economists, and examine the manner in which they have used their terms in reference to the obvious rules above laid down; but I cannot resist noticing one very signal deviation from them in the justly distinguished work of M. Say. It relates to the term utility . It must be allowed by those who are acquainted with M. Say’s work, first, that he has used the term u

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Chapter V. ON THE DEFINITION AND APPLICATION OF TERMS BY MR. RICARDO.

Chapter V. ON THE DEFINITION AND APPLICATION OF TERMS BY MR. RICARDO.

Although it must be allowed that the criterion of value which Mr. Ricardo has endeavoured to establish is an incomplete one, yet I cannot but think that he has conferred an important benefit on the science of political economy, by drawing a marked line of distinction between riches and value. A difference had perhaps been felt by most writers, but none before him had so strongly marked it, and attached so much importance to it. He agrees entirely with Adam Smith in the following definition of ri

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Chapter VI. ON THE DEFINITION AND APPLICATION OF TERMS BY MR. MILL, IN HIS “ELEMENTS OF POLITICAL ECONOMY.”

Chapter VI. ON THE DEFINITION AND APPLICATION OF TERMS BY MR. MILL, IN HIS “ELEMENTS OF POLITICAL ECONOMY.”

Mr. Mill, in his Elements of Political Economy , professedly lays no claim to discovery. His main object seems to have been to give the substance of Mr. Ricardo’s work in a more concentrated form, and with a better arrangement; and this object he has accomplished. In the definition and application of his terms he nearly follows Mr. Ricardo; but it may be useful to notice a few cases, where he has either made the errors of Mr. Ricardo’s definitions more prominent, or has altered without improving

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Chapter VII. ON THE DEFINITION AND APPLICATION OF TERMS, BY MR. MACCULLOCH, IN HIS “PRINCIPLES OF POLITICAL ECONOMY.”

Chapter VII. ON THE DEFINITION AND APPLICATION OF TERMS, BY MR. MACCULLOCH, IN HIS “PRINCIPLES OF POLITICAL ECONOMY.”

However incautious Mr. Ricardo and Mr. Mill may have been in the definition and application of their terms, I fear it will be found that Mr. Macculloch has been still more so; and that, instead of growing more careful, the longer he considers the subject, he seems to be growing more rash and inconsiderate. The expositors of any science are in general desirous of calling into their service definite and appropriate terms; and for this purpose their main object is to look for characteristic differe

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Chapter VIII. ON THE DEFINITION AND USE OF TERMS BY THE AUTHOR OF “A CRITICAL DISSERTATION ON THE NATURE, MEASURE, AND CAUSES OF VALUE.”

Chapter VIII. ON THE DEFINITION AND USE OF TERMS BY THE AUTHOR OF “A CRITICAL DISSERTATION ON THE NATURE, MEASURE, AND CAUSES OF VALUE.”

It might be thought that I was not called upon to notice the deviations from the most obvious rules for the use of terms in a Critical Dissertation on the Nature, Measure, and Causes of Value , by an anonymous writer. But the great importance of the subject itself at the present moment, when it may be said to be sub judice , the tone of scientific precision in which the dissertation is written, notwithstanding its fundamental errors, and the impression which it is understood to have made among s

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Chapter IX. SUMMARY OF THE REASONS FOR ADOPTING THE SUBJOINED DEFINITION OF THE MEASURE OF VALUE.

Chapter IX. SUMMARY OF THE REASONS FOR ADOPTING THE SUBJOINED DEFINITION OF THE MEASURE OF VALUE.

As a preliminary, it may be proper to state, that it seems absolutely essential to the language of political economy, that the expression value of a commodity , like the expression price of a commodity , should have some fixed and determined sense attached to it. Every person who has either written or talked on the subject of political economy, has been constantly in the habit of using the term without specifically expressing the object of comparison intended: and if it were true, that we might

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WEALTH.

WEALTH.

1. The material objects necessary, useful or agreeable to man, which have required some portion of human exertion to appropriate or produce....

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UTILITY.

UTILITY.

2. The quality of being serviceable or beneficial to mankind. The utility of an object has generally been considered as proportioned to the necessity and real importance of these services and benefits. All wealth is necessarily useful; but all that is useful is not necessarily wealth....

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VALUE.

VALUE.

3. Has two meanings—value in use, and value in exchange....

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VALUE IN USE.

VALUE IN USE.

4. Is synonymous with Utility. It rarely occurs in political economy, and is never implied by the word value when used alone....

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VALUE, OR VALUE IN EXCHANGE.

VALUE, OR VALUE IN EXCHANGE.

5. The relation of one object to some other, or others in exchange, resulting from the estimation in which each is held. When no second object is specified, the value of a commodity naturally refers to the causes which determine this estimation, and the object which measures it. Value is distinguished from wealth in that it is not confined to material objects, and is much more dependent upon scarcity and difficulty of production....

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PRODUCTION.

PRODUCTION.

6. The creation of objects which constitute wealth....

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PRODUCT, PRODUCE.

PRODUCT, PRODUCE.

7. The portion of wealth created by production....

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SOURCES OF WEALTH.

SOURCES OF WEALTH.

8. Land, labour, and capital. The two original sources, are land and labour; but the aid which labour receives from capital is applied so very early, and is so very necessary in the production of wealth, that it may be considered as a third source....

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LAND.

LAND.

9. The soil, mines, waters, and fisheries of the habitable globe. It is the main source of raw materials and food....

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LABOUR.

LABOUR.

10. The exertions of human beings employed with a view to remuneration. If the term be applied to other exertions, they must be particularly specified....

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PRODUCTIVE LABOUR.

PRODUCTIVE LABOUR.

11. The labour which is so directly productive of wealth as to be capable of estimation in the quantity or value of the products obtained....

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UNPRODUCTIVE LABOUR.

UNPRODUCTIVE LABOUR.

12. All labour which is not directly productive of wealth. The terms productive and unproductive are always used by political economists in a restricted and technical sense exclusively applicable to the direct production or non-production of wealth....

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INDUSTRY.

INDUSTRY.

13. The exertion of the human faculties and powers to accomplish some desirable end. No very marked line is drawn in common language, or by political economists, between industry and labour; but the term industry generally implies more superintendence and less bodily exertion than labour....

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STOCK.

STOCK.

14. Accumulated wealth, either reserved by the consumer for his consumption, or kept, or employed with a view to profit....

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CAPITAL.

CAPITAL.

15. That portion of the stock of a country which is kept or employed with a view to profit in the production and distribution of wealth....

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FIXED CAPITAL.

FIXED CAPITAL.

16. That portion of stock employed with a view to profit which yields such profit while it remains in the possession of the owner....

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CIRCULATING CAPITAL.

CIRCULATING CAPITAL.

17. That portion of stock employed with a view to profit which does not yield such profit till it is parted with....

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REVENUE.

REVENUE.

18. That portion of stock or wealth which the possessor may annually consume without injury to his permanent resources. It consists of the rents of land, the wages of labour, and the profits of stock....

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ACCUMULATION OF CAPITAL.

ACCUMULATION OF CAPITAL.

19. The employment of a portion of revenue as capital. Capital may therefore increase without an increase of stock or wealth....

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SAVING.

SAVING.

20. In modern times, implies the accumulation of capital, as few people now lock up their money in a box....

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RENT OF LAND.

RENT OF LAND.

21. That portion of the produce of land which remains to the owner after all the outgoings belonging to its cultivation are paid, including the ordinary profits of the capital employed....

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MONEY-RENT OF LAND.

MONEY-RENT OF LAND.

22. The average rent of land as before defined, estimated in money....

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GROSS SURPLUS OF THE LAND.

GROSS SURPLUS OF THE LAND.

23. That portion of the produce of land which is not actually consumed by the cultivators....

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WAGES OF LABOUR.

WAGES OF LABOUR.

24. The remuneration paid to the labourer for his exertions....

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NOMINAL WAGES.

NOMINAL WAGES.

25. The wages which the labourer receives in the current money of the country....

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REAL WAGES.

REAL WAGES.

26. The necessaries, conveniences, and luxuries of life which the wages of the labourer enable him to command....

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THE RATE OF WAGES.

THE RATE OF WAGES.

27. The ordinary wages paid to the labourer by the day, week, month, or year, according to the custom of the place where he is employed. They are generally estimated in money....

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THE PRICE OF LABOUR.

THE PRICE OF LABOUR.

28. Has generally been understood to mean the average money-price of common day-labour, and is not therefore different from the rate of wages, except that it more specifically refers to money....

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THE AMOUNT OF WAGES.

THE AMOUNT OF WAGES.

29. The whole earnings of the labourer in a given time, which may be much more or much less than the average rate of wages, or the price of common day-labour....

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THE PRICE OF EFFECTIVE LABOUR.

THE PRICE OF EFFECTIVE LABOUR.

30. The price in money of a given quantity of human exertion of a given strength and character, which may be essentially different from the common price of day-labour, or the whole money-earnings of the labourer in a given time....

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ACCUMULATED LABOUR.

ACCUMULATED LABOUR.

31. The labour worked up in the raw materials and tools applied to the production of other commodities....

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PROFITS OF STOCK.

PROFITS OF STOCK.

32. When stock is employed as capital in the production and distribution of wealth, its profits consist of the difference between the value of the capital advanced, and the value of the commodity when sold or used....

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THE RATE OF PROFITS.

THE RATE OF PROFITS.

33. The per centage proportion which the value of the profits upon any capital bears to the value of such capital....

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THE INTEREST OF MONEY.

THE INTEREST OF MONEY.

34. The net profits of a capital in money separated from the risk and trouble of employing it....

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THE PROFITS OF INDUSTRY, SKILL, AND ENTERPRISE.

THE PROFITS OF INDUSTRY, SKILL, AND ENTERPRISE.

35. That portion of the gross profits of capital, independent of monopoly, which remains after deducting the net profits, or the interest of money....

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MONOPOLY PROFITS.

MONOPOLY PROFITS.

36. The profits which arise from the employment of capital where the competition is not free....

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CONDITIONS OF THE SUPPLY OF COMMODITIES.

CONDITIONS OF THE SUPPLY OF COMMODITIES.

37. The advance of the quantity of accumulated and immediate labour necessary to their production, with such a per centage upon the whole of the advances for the time they have been employed as is equivalent to ordinary profits. If there be any other necessary conditions of the supply arising from monopolies of any description, or from taxes, they must be added....

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ELEMENTARY COSTS OF PRODUCTION.

ELEMENTARY COSTS OF PRODUCTION.

38. An expression exactly equivalent to the conditions of the supply....

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MEASURE OF THE CONDITIONS OF THE SUPPLY, OR OF THE ELEMENTARY COSTS OF PRODUCTION.

MEASURE OF THE CONDITIONS OF THE SUPPLY, OR OF THE ELEMENTARY COSTS OF PRODUCTION.

39. The quantity of labour for which the commodity will exchange, when it is in its natural and ordinary state....

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THE VALUE, MARKET VALUE, OR ACTUAL VALUE, OF A COMMODITY AT ANY PLACE OR TIME.

THE VALUE, MARKET VALUE, OR ACTUAL VALUE, OF A COMMODITY AT ANY PLACE OR TIME.

40. The estimation in which it is held at that place and time, determined in all cases by the state of the supply compared with the demand, and ordinarily by the elementary costs of production which regulate that state....

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THE NATURAL VALUE OF A COMMODITY AT ANY PLACE AND TIME.

THE NATURAL VALUE OF A COMMODITY AT ANY PLACE AND TIME.

41. The estimation in which it is held when it is in its natural and ordinary state, determined by the elementary costs of its production, or the conditions of its supply....

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MEASURE OF THE MARKET OR ACTUAL VALUE OF A COMMODITY AT ANY PLACE OR TIME.

MEASURE OF THE MARKET OR ACTUAL VALUE OF A COMMODITY AT ANY PLACE OR TIME.

42. The quantity of labour which it will command or exchange for at that place and time....

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MEASURE OF THE NATURAL VALUE OF A COMMODITY AT ANY PLACE AND TIME.

MEASURE OF THE NATURAL VALUE OF A COMMODITY AT ANY PLACE AND TIME.

43. The quantity of labour for which it will exchange at that place and time, when it is in its natural and ordinary state....

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THE PRICE, THE MARKET PRICE, OR ACTUAL PRICE OF A COMMODITY AT ANY PLACE AND TIME.

THE PRICE, THE MARKET PRICE, OR ACTUAL PRICE OF A COMMODITY AT ANY PLACE AND TIME.

44. The quantity of money for which it exchanges at that place and time, the money referring to the precious metals....

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THE NATURAL PRICE OF A COMMODITY AT ANY PLACE AND TIME.

THE NATURAL PRICE OF A COMMODITY AT ANY PLACE AND TIME.

45. The price in money which will pay the elementary costs of its production, or the money conditions of its supply....

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SUPPLY OF COMMODITIES.

SUPPLY OF COMMODITIES.

46. The quantity offered, or ready to be immediately offered, for sale....

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DEMAND FOR COMMODITIES.

DEMAND FOR COMMODITIES.

47. Has two distinct meanings: one, in regard to its extent, or the quantity of commodities purchased; and the other, in regard to its intensity, or the sacrifice which the demanders are able and willing to make in order to satisfy their wants....

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DEMAND IN REGARD TO ITS EXTENT.

DEMAND IN REGARD TO ITS EXTENT.

48. The quantity of the commodity purchased, which generally increases with the increase of the supply, and diminishes with the diminution of it. It is often the greatest when commodities are selling below the costs of production....

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DEMAND IN REGARD TO ITS INTENSITY.

DEMAND IN REGARD TO ITS INTENSITY.

49. The sacrifice which the demanders are able and willing to make in order to satisfy their wants. It is this species of demand alone which, compared with the supply, determines prices and values....

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EFFECTUAL DEMAND, IN REGARD TO ITS EXTENT.

EFFECTUAL DEMAND, IN REGARD TO ITS EXTENT.

50. The quantity of a commodity wanted by those who are able and willing to pay the costs of its production....

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EFFECTUAL DEMAND, IN REGARD TO ITS INTENSITY.

EFFECTUAL DEMAND, IN REGARD TO ITS INTENSITY.

51. The sacrifice which the demanders must make, in order to effectuate the continued supply of a commodity....

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MEASURE OF THE INTENSITY OF THE EFFECTUAL DEMAND.

MEASURE OF THE INTENSITY OF THE EFFECTUAL DEMAND.

52. The quantity of labour for which the commodity will exchange, when in its natural and ordinary state....

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EXCESS OF THE DEMAND ABOVE THE SUPPLY.

EXCESS OF THE DEMAND ABOVE THE SUPPLY.

53. The demand for a commodity is said to be in excess above the supply, when, either from the diminution of the supply, or the increase of the effectual demand, the quantity in the market is not sufficient to supply all the effectual demanders. In this case the intensity of the demand increases, and the commodity rises, in proportion to the competition of the demanders, and the sacrifice they are able and willing to make in order to satisfy their wants....

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EXCESS OF THE SUPPLY ABOVE THE DEMAND, OR PARTIAL GLUT.

EXCESS OF THE SUPPLY ABOVE THE DEMAND, OR PARTIAL GLUT.

54. The supply of a commodity is said to be in excess above the demand, or there is a partial glut, when, either from the superabundance of supply, or the diminution of demand, the quantity in the market exceeds the quantity wanted by those who are able and willing to pay the elementary costs of production. It then falls below these costs in proportion to the eagerness of the sellers to sell; and the glut is trifling, or great, accordingly....

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GENERAL GLUT.

GENERAL GLUT.

55. A glut is said to be general, when, either from superabundance of supply or diminution of demand, a considerable mass of commodities falls below the elementary costs of production....

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A GIVEN DEMAND.

A GIVEN DEMAND.

56. A given demand, in regard to price, is a given quantity of money intended to be laid out in the purchase of certain commodities in a market; and a given demand, in regard to value, is the command of a given quantity of labour intended to be employed in the same way....

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VARIATIONS OF PRICES AND VALUES.

VARIATIONS OF PRICES AND VALUES.

57. Prices and values vary as the demand directly and the supply inversely. When the demand is given, prices and values vary inversely as the supply; when the supply is given, directly as the demand....

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CONSUMPTION.

CONSUMPTION.

58. The destruction wholly or in part of any portions of wealth....

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PRODUCTIVE CONSUMPTION.

PRODUCTIVE CONSUMPTION.

59. The consumption or employment of wealth by the capitalist, with a view to future production....

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UNPRODUCTIVE CONSUMPTION, OR SPENDING.

UNPRODUCTIVE CONSUMPTION, OR SPENDING.

60. The consumption of wealth, as revenue, with a view to the final purpose of all production—subsistence and enjoyment; but not with a view to profit....

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Chapter XI. OBSERVATIONS ON THE DEFINITIONS.

Chapter XI. OBSERVATIONS ON THE DEFINITIONS.

Def. 1. The reader will be aware that, in almost all definitions, the same meaning may be conveyed in different language, and that it is the meaning rather than the mode of expressing it that should be the main object of our consideration. The essential question in the definition of wealth is, whether or not it should be confined to material objects, and the reader is already apprised of my reasons for thinking that it should. Even M. Say, who admits “ les produits immatériels ,” allows, as I ha

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