Front Page Titles (by Subject) Summary of Principles illustrated in this Volume. - Illustrations of Political Economy, vol. 4
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Summary of Principles illustrated in this Volume. - Harriet Martineau, Illustrations of Political Economy, vol. 4 
Illustrations of Political Economy (3rd ed) in 9 vols. (London: Charles Fox, 1834). Vol. 4.
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Summary of Principles illustrated in this Volume.
There are two kinds of Value: value in use, and value in exchange.
Articles of the greatest value in use may have none in exchange; as they may be enjoyed without labour; and it is labour which confers Exchangeable Value.
This is not the less true for capital as well as labour being employed in production; for capital is hoarded labour.
When equal quantities of any two articles require an equal amount of labour to produce them, they exchange exactly against one another. If one requires more labour than the other, a smaller quantity of the one exchanges against a larger quantity of the other.
If it were otherwise, no one would bestow a larger quantity of labour for a less return; and the article requiring the most labour would cease to be produced.
Exchangeable value, therefore, naturally depends on cost of production.
Naturally, but not universally; for there are influences which cause temporary variations in exchangeable value.
These are, whatever circumstances affect demand and supply.
But these can act only temporarily; because the demand of any procurable article creates supply; and the factitious value conferred by scarcity soon has an end.
When this end has arrived, cost of production again determines exchangeable value.
Its doing so may, therefore, stand as a general rule.
Though labour, immediate and hoarded, is the regulator, it is not the measure of exchangeable value: for the sufficient reason, that labour itself is perpetually varying in quality and quantity, from there being no fixed proportion between immediate and hoarded labour.
Since labour, the primary regulator, cannot serve as a measure of exchangeable value, none of the products of labour can serve as such a measure.
There is, therefore, no measure of exchangeable value.
Such a measure is not needed; as a due regulation of the supply of labour, and the allowance of free scope to the principle of competition ensure sufficient stability of exchangeable value for all practical purposes.
In these requisites are included security of property, and freedom of exchange, to which political tranquillity and legislative impartiality are essential.
Price is the exponent of exchangeable value.
Natural or necessary price, — regulated by cost of production,—includes the wages of the labourer, and the profits of the capitalist.
Market price varies from natural price with variations of demand and supply, and in proportion to the oppressiveness of public burdens and commercial restrictions.
The more nearly and permanently market prices approach natural prices, the more prosperous is the state of commerce; and the two most essential requisites to this prosperity are social tranquillity and legislative impartiality.
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