The Online Library of Liberty

A project of Liberty Fund, Inc.

• Preface.
• Conversation I.: Introduction.
• Conversation II.: Introduction — Continued.
• Conversation III.: On Property.
• Conversation IV.: On Property— Continued.
• Conversation V.: On the Division of Labour.
• Conversation VI.: On Capital.
• Conversation VII.: On Capital — Continued.
• Conversation VIII.: On Wages and Population.
• Conversation IX.: On Wages and Population. Continued.
• Conversation X.: On the Condition of the Poor.
• Conversation XI.: On Revenue.
• Conversation XII.: On Revenue Derived From Property In Land.
• Conversation XIII.: On Revenue Derived From the Cultivation of Land.
• Conversation XIV.: On the Revenue of Those Who Do Not Employ Their Capital Themselves.
• Conversation XV.: On Value and Price.
• Conversation XVI.: On Money.
• Conversation XVII.: Subject of Money Continued.
• Conversation XVIII.: On Commerce.
• Conversation XIX.: On Foreign Trade.
• Conversation XX.: Continuation of Foreign Trade.
• Conversation XXI.: Subject of Foreign Trade Continued.
• Conversation XXII.: On Expenditure.

CONVERSATION XV.

ON VALUE AND PRICE.

mrs. b.

Before we proceed to the subject of trade, it is necessary that you should understand what is meant by the value of commodities.

caroline.

That cannot be very difficult; it is one of the first things we learn.

mrs. b.

What is learnt at an age when the understanding is not yet well developed, is not always well learnt. What do you understand by the value of commodities?

caroline.

We call things valuable which cost a great deal of money; a diamond-necklace, for instance, is very valuable.

mrs. b.

But if, instead of money, you gave, in exchange for the necklace, silk or cotton goods, tea, sugar, or any other commodity, would you not still call the necklace valuable?

caroline.

Certainly I should; for, supposing the necklace to be worth 1000l., it is immaterial whether I give 1000l. in money, or 1000l. worth of any thing else in exchange for it.

mrs. b.

The value of a commodity is therefore estimated by the quantity of other things generally for which it will exchange, and hence it is frequently called exchangeable value.

caroline.

Or, in other words, the price of a commodity.

mrs. b.

No; price does not admit of so extensive a signification. The price of a commodity is its exchangeable value, estimated in money only. It is necessary that you should remember this distinction.

caroline.

But what is it that renders a commodity valuable? I always thought that its price was the cause of its value; but I begin to perceive that I was mistaken: for things are valuable independently of money; it is their real intrinsic value which induces people to give money for them.

mrs. b.

Certainly; money cannot impart value to commodities; it is merely the scale by which their value is measured; as a yard measures a piece of cloth.

caroline.

I think the value of things must consist in their utility, for we commonly value a commodity according to the use we can make of it. Food, clothing, houses, carriages, furniture, have all their several uses.

mrs. b.

That is true; yet there are some things of the most general and important utility, such, for instance, as light, air, and water, which, however indispensable to our welfare, have no exchangeable value; nothing is given for them, nor can any thing be obtained in exchange for them. Utility, therefore, does not in all cases produce exchangeable value.

caroline.

No one will give any thing for what is so plentiful, and so readily obtained that every one may have as much as he requires, without making any sacrifice: but as light, air, and water, are essential even to our existence, surely they should be esteemed valuable.

mrs. b.

No doubt they are, but it is in a point of view different from that of exchangeable value. Dr. Adam Smith distinguishes two kinds of value; the one arising from utility, the other from what can be obtained in exchange. He says, “The word value, it is to be observed, has two different meanings; it sometimes expresses the utility of some particular object, and sometimes the power of purchasing other goods which the possession of that object conveys. The one may be called value in use, the other value in exchange. The things which have the greatest value in use have frequently little or no value in exchange; and, on the contrary, those that have the greatest value in exchange, have frequently little or no value in use. Nothing is more useful than water, but it will purchase scarce any thing; scarce any thing can be had in exchange for it. A diamond, on the contrary, has scarce any value in use, but a very great quantity of other goods may frequently be had in exchange for it.”

Nature works for us gratuitously; and when she supplies us with articles in such abundance, that no labour is required to procure them, those articles, however useful they may be, have not exchangeable value: but when the labour of man becomes necessary to procure us the enjoyment of any commodity, he must be remunerated, and that commodity acquires a value; either a price is paid for it in money, or other things are given in exchange for it. Light, air, and water are the free and bountiful gifts of nature, but if a man constructs a lamp, we must pay for the light it diffuses; if we are indebted to his labours for a ventilator, or even a fan, we pay for the air they procure us: and when water is conveyed through pipes into our houses, raised by pumps, or brought to us in any manner by the art of man, a price is paid for it.

Utility may therefore be considered as the sole cause of value in use, whilst value in exchange may be produced by any circumstance which renders the possession of an object so difficult of attainment, and at the same time so desirable, that men are willing to give something in exchange for it. Thus not only utility, but beauty, curiosity, fashion, rarity, and many other qualities, may create exchangeable value; and it is to this value that, in political economy, we chiefly confine our attention.

caroline.

There are many articles of luxury which are perfectly devoid of utility, such, for instance, as pictures, jewels, artificial flowers, and other ornaments; these are valued either for their beauty, their curiosity, or their rarity.

But, Mrs. B., if an object is valuable in proportion as we are desirous to obtain it, its value will vary with respect to different persons to whom its possession may be more or less desirable. Thus, medicine to the sick, and food to the hungry, will be more valuable than to the healthy and the well fed.

mrs. b.

The value of a commodity is not estimated by the sacrifice which those in the most urgent want would make rather than be deprived of it; but by what is requisite to be given in exchange, in order to obtain it. The apothecary knows that if he endeavoured to take advantage of the sick man’s necessity to raise the price of his medicine, it would be procured at another shop; and that instead of making an exorbitant profit he would lose a customer; and if the hungry man were attempted to be imposed upon in a similar manner, he would purchase food elsewhere: thus competition (under ordinary circumstances) prevents undue advantage being taken of the wants of individuals.

caroline.

What is it, then, which regulates the exchangeable value of commodities? you have said that it was estimated by the quantity of things given in exchange for them, but I wish to know what it is that determines the specific quantity to be given?

mrs. b.

It is fundamentally regulated by the cost of production of the commodity, that is to say, the expense laid out upon it in order to bring it to a saleable state. A great deal of labour has been bestowed upon that book-case; if the workmen who made it were not repaid, they would no longer make book-cases, but seek some more profitable employment. The price of a commodity, therefore, must be sufficient to defray the cost of production.

caroline.

But, Mrs. B., the money which this book-case cost does not all go to the workmen who made it; the materials of which it is made must be paid for: the upholsterer who sold it derives a profit from it.

mrs. b.

It was his capital which purchased the raw materials, which furnished the tools, and set the journeymen to work; without this aid the book-case could not have been made. The price of commodities is the reward not only of those who prepared or fabricated them, but also of every productive labourer who has been employed in bringing them to a saleable state, for each of these concurred in giving value to the commodity.

We have formerly observed that no work can be undertaken without the use of capital, as well to maintain the labourer as to supply him with the implements to work with, and the materials to work upon. Subsisting upon this maintenance, and working with these implements, he is to transform the useless trunk of a tree into a useful or beautiful piece of furniture, which acquires value in proportion as it becomes an object of desire. The profit of capital is, therefore, a component part of the value of a commodity, as well as the wages of labour. There remains yet a third component part of the value of a commodity, which a little reflection will, I think, enable you to discover.

caroline.

Agricultural produce must, besides the wages of labour, and profit of capital, pay the rent of the land on which it is raised. But this will not be the case with manufactured goods.

mrs. b.

The raw materials for manufactures are all, or almost all, the produce of land, and consequently must defray the expense of rent, the same as corn or hay. But rent does not enter into the price of commodities in the same manner as the profit of capital, or the wages of labour, because, as you may recollect, rent is the effect, not the cause of the high price of commodities. Dr. Smith observes, that “high or low wages are the causes of high or low price; high or low rent is the effect of it. It is because high or low wages or profit must be made, in order to bring a particular commodity to market, that its price is high or low. But it is because its price is high or low, a great deal more, or very little more, or no more than what is sufficient to pay those wages and profit, that it affords a high rent, or a low rent, or no rent at all.”

Let us now observe how the value of a commodity resolves itself into these three component parts. Take, for instance, a load of hay; its price pays, first, the wages of the labourer who cut down the grass and made it into hay; then the profits of the farmer who sells it; and, lastly, the rent of the field in which it grew. This, therefore, constitutes the whole cost of production of the load of hay; and may be called its natural value.

caroline.

But, Mrs. B., if rent does not raise the price of commodities, how can you consider it as forming a component part of their value?

mrs. b.

That part of the value of commodities which goes to the landlord in the form of rent would, were there no rent, go to the cultivator in the form of profit; it is, therefore, immaterial under which head you consider it.

caroline.

Or should the commodity be produced on land of too poor a quality to afford a rent, rent could no longer be considered as entering into the cost of its production.

mrs. b.

Certainly not; these three component parts of the natural value of a commodity are not always essentially necessary to its production; one or other of them may occasionally be deficient.

caroline.

Pray let me try whether I could trace the various payments made to the several persons concerned in the production of a loaf of bread. — Its price must first pay the wages of the journeyman baker who made it; then the profits of capital of the master-baker who sells it; next the wages of the miller who ground the corn, and the profits of the master who employs him; afterwards the wages of the several husbandmen who cultivated the field of corn; the profits of the farmer; and, lastly, a portion of the rent of his farm.

mrs. b.

Exactly so. Thus you see that the value of a commodity is composed of three parts, rent, profit, and wages; the rent of the proprietor of the land, the profits of the several employers of capital, and the wages of the various labourers who give it qualities which render it an object of desire, and consequently a saleable commodity.

It sometimes happens that the proprietor of land, the farmer, and even the labourer, are united in one individual. We have already observed, that in many countries of Europe, and more especially in America, the cultivators of the land are frequently both proprietors and labourers, and reap the reward of rent, profit, and wages.

caroline.

And in this country a cottager who possesses a little garden cultivated by his own hands, and of which he brings the produce to market, likewise concentrates in himself all the advantages of proprietor, capitalist, and labourer; for he sells his vegetables for the same price as a market-gardener, who has to deduct from the price the rent of the garden and the wages of the labourer.

mrs. b.

But he is not, therefore, the greater gainer, for if he has no rent to pay, it is because he has laid out a capital in the purchase of the land; and if he pays no wages, it is because he works himself, and employs that labour which might otherwise bring him wages: then some capital is used to purchase garden-tools, manure, or whatever may be requisite for the culture of his garden.

caroline.

I think I now understand perfectly well how rent, profit, and wages enter into the value of commodities. I may say, for instance, so much rent, profit, and wages has been expended in the production of this carpet, and therefore I must pay a sum of money for it, if I wish to purchase it; but how am I thence to infer what sum of money it is worth?

mrs. b.

By applying the same scale or measure to estimate the value of money, that you have applied to estimate the value of the carpet. Examine what quantity of rent, profit, and wages was bestowed upon the production of the money, and you will be able to ascertain how much of it should be given in exchange for the carpet, or, in other words, what the carpet is worth in money. I paid 20 guineas for this carpet; I conclude therefore that the cost of production of the carpet is equal to the cost of production of 20 guineas.

caroline.

But it would be impossible to calculate with any degree of accuracy the quantity of rent, profit, and wages which a commodity cost, and still less that of the gold or silver for which it is sold.

mrs. b.

Nor is it necessary to enter into this calculation; it is by long experience only that the world forms an estimation of the relative value of different commodities, sufficiently accurate for the purposes of exchange. The calculations to which we have been alluding, though true in principle, are by no means susceptible of being brought into practical use.

caroline.

Yet when barter was first introduced, one savage might say to another, ‘It is not just to offer me a hare, which is the produce of a day’s hunting, in exchange for a bow which I have spent three days in making; I will not part with it unless you give me also the fruit which you gathered in the woods yesterday, and the fish you caught the day before; in short, I will not exchange the produce of my toil and trouble for less than the produce of an equal share of your toil and trouble.’ And surely this is much more clear and simple reasoning than to say that the bow is worth so much money?

mrs. b.

To a savage unacquainted with money it certainly is; but I believe that in the present times people understand better the value of a commodity estimated in money.

caroline.

But if it were practicable to calculate with precision the quantity of rent, profit, and wages which had been expended on the production of commodities, that, I suppose, would constitute an accurate measure of their value.

mrs. b.

No; because there are other circumstances, which, as we shall presently observe, affect the value of commodities. Besides, it would be impossible to calculate with any degree of accuracy the cost of production of a commodity, since rent, profit, and wages are all liable to vary in their own value; and we cannot adopt, as a fixed standard, a measure which is itself subject to change. If we were to measure a piece of cloth by a yard measure, which lengthened at one season of the year and shortened at another, it would not enable us to ascertain the length of the piece of cloth. Now, rent varies much according to the situation of the land, and the nature of the soil. Profit, according to the abundance or scarcity of capital; but nothing fluctuates more than the wages of labour; it differs not only in different countries, but even in the same town, according to the demand for labour, the strength, the skill, and the ingenuity of the labourer. A skilful artisan may not only do more work, but may do it in a superior manner, and he will require payment in the articles of his workmanship, not only for the labour he has bestowed on them, but also for the pains he has taken, and the time he has spent in acquiring his skill; the wages of a superior workman are for this reason much higher than those of a common labourer. Since, therefore, neither the quantity nor the quality of the labour bestowed on a commodity can be determined by the number of days or hours employed in producing it, time is not a measure of the value of labour; we must take into account the degrees of skill and attention which the work may require, as also the healthy, pleasant or unpleasant, easy or severe nature of the employment, all of which are to be paid accordingly.

caroline.

Thus the bow which employed the savage during three days might be worth twice the labour of the other savage during the same period of time; for much less skill is required to be a huntsman than to be a fabricator of bows and arrows.

mrs. b.

On the other hand, we find that eight hours of the labour of a coal-heaver will be paid much higher than the same number of hours of a weaver’s labour, because, although the latter requires more skill, the first is much more severe and unpleasant labour. But the weaver will receive greater wages than a farmer’s labourer, because the work of the latter is both more healthy and requires less skill.

Now, since it is impossible to enter into a calculation of all the shades of these various difficulties, rent, profit, and labour can never form an accurate standard of value.

caroline.

They have at least enabled me to acquire a much more clear and precise idea of value than I had before.

mrs. b.

Your idea of value is, however, yet far from being complete; for there are, as I have just observed, other circumstances to be considered independently of the cost of production, which materially influence the value of commodities. In a besieged town, for instance, provisions have frequently risen to twenty or thirty times their natural value, and have increased proportionally in price.

caroline.

Their increased price in this case is owing merely to the scarcity, not to any increase of value, for were they as plentiful as usual they would sell at the usual price.

mrs. b.

Their high price is the consequence of their increased value, for they would not only sell for a greater sum of money, but also exchange for a greater quantity of any commodities, except such as are convertible into food.

caroline.

Unless perhaps it were gunpowder, or any kind of ammunition, which in a besieged town might be as much in request as food.

mrs. b.

Certainly; in that case ammunition would rise in value as well as provisions.

Plenty and scarcity are, then, circumstances which considerably affect the value of commodities. Tell me whether you understand the meaning of the words, plenty and scarcity.

caroline.

Yes, surely; when there is a great quantity of any thing, it is said to be plentiful; — when very little, it is scarce.

mrs. b.

If there was very little corn in a desert island, should you say there was a scarcity of corn there?

caroline.

No; because as there would be no one to eat it, none would be wanted; and scarcity implies an insufficiency.

mrs. b.

And when a few years ago there was a scarcity of corn in this country, do you think that the whole of the island produced only a small quantity?

caroline.

No; not positively a small quantity, but a smaller quantity than was required to supply the whole of the population of the country with bread.

mrs. b.

Plenty and scarcity are therefore relative terms: a scarcity neither implies a small quantity, nor plenty a large one; but the first implies an insufficiency, or less than is wanted; the last as much, or perhaps more than is required. When there is plenty, the supply of the commodity being at least equal to the demand, every one who can pay the cost of its production will be able to purchase it. If, on the contrary, the commodity be scarce, some of these must go without it, and the apprehension of this privation produces competition amongst those who are desirous of buying the commodity, and this raises its value above the cost of production.

caroline.

This, then, is the cause of the rise in the price of provisions in a besieged town?

mrs. b.

Yes; or during a famine, or in any case of scarcity. Whenever, on the contrary, the supply exceeds the demand, the price will fall below the natural value of the commodity.

You see, therefore, that the natural value and exchangeable value do not always coincide.

caroline.

The exchangeable value appears to me to consist of the natural value, subject either to augmentation or diminution, in proportion as the commodity is scarce or plentiful.

mrs. b.

True; and it is this proportion, that is to say, the proportion of the supply to the demand, which regulates the market price.

caroline.

That is very clear: if there are fewer chickens brought to market than are wanted, the supply being inadequate to the demand, the market price will rise; if more than are wanted, the demand exceeds the supply, and the market price will fall.

mrs. b.

There is some little difficulty in forming a clear conception of the meaning of the word demand; what do you understand by it?

caroline.

I understand that those who go to market to buy chickens, by offering a price make a demand for them; that if there are more persons wanting to buy chickens than there are chickens to be sold, the demand is greater than the supply; if the contrary, the supply is greater than the demand.

mrs. b.

So far you are right; but when chickens, in consequence of scarcity, rise considerably in price, will those who intended to purchase chickens, but who are not willing to give the advanced price, still make a demand for them?

caroline.

Why, no — it would be absurd to say that they demanded a thing at market for which they would not pay the market price; yet as they would have bought chickens had they been at a reasonable price, the offer they had previously made must have tended to raise the market price.

mrs. b.

No doubt; they formed part of the competition of bidders; but when once the market price is fixed, the demand of all those, who either will not or cannot pay it, ceases.

caroline.

Certainly; I may either not be able to afford to pay the market price, in which case I want the means to purchase; or finding chickens too dear, I may prefer buying butcher’s meat; if so, I want the will to purchase; but in either case my demand ceases.

mrs. b.

What demand then remains? That of those alone who have both the power and the will to pay the market price.

This, which has been distinguished by the name of effective demand, will exactly coincide with the supply. It cannot exceed it, else you would have the will and the power to purchase more chickens than there are to be sold; and it cannot be inferior to it, otherwise the competition of buyers and sellers would have fixed the market price lower, in order to have disposed of all the supply.

caroline.

But should the supply prove so abundant as to reduce the market price below the natural value; if chickens, for instance, should sell for only sixpence each; surely the owners, rather than dispose of them to such a disadvantage, would take them back, and run the chance of selling them better another day, or at another market. And if the whole were not sold, it appears to me that the supply would exceed the demand.

mrs. b.

If a seller is not distressed for ready money, and if he think the market price likely to improve, he will very naturally withdraw his goods, rather than sell them under the usual profits. But he who withdraws his goods from sale no longer furnishes a supply, any more than he who will not pay the market price offers a demand. The withdrawing a commodity which is in excess prevents the market price from falling so low as it would otherwise do; but the market price being once settled, the supply and demand, you see, will coincide.

caroline.

But this is not the case with the demand and supply which regulates the market price; for if these coincided, commodities would always sell for their natural value, and there would never be any fluctuation in the market price.

mrs. b.

You must, however, recollect, that it is the cost of production of a commodity which constitutes its exchangeable value; the proportion of supply and demand should be considered as only accidentally affecting it.

caroline.

Yet when once the commodity is brought to market, it is the proportion of the supply to the demand which alone regulates the price. It is in vain that the owner of the chickens should declare that they cost him so much to rear and fatten; if the supply exceed the demand, he must sell them for less, or not sell them at all.

mrs. b.

True; but at a future period the market will suffer an alteration, for a commodity which will not fetch its natural value will cease to be produced.

To illustrate this, let us suppose that, by the breaking out of a continental war, our foreign trade should meet with such obstructions, that great part of the manufactured goods we had prepared for exportation will remain at home and overstock the market. The supply in this case exceeding the demand, the goods will fall in price below their natural value, in order to attract a greater number of purchasers; the consumption will thus be increased, but the manufacturers and dealers, having been obliged to sell the goods for less than they cost to produce, will be losers instead of gainers by their industry.

caroline.

I recollect that calicoes and English muslins were much cheaper during the last war than they are at present; and the shopkeepers then said that, at the price at which they sold them, they did not pay for the workmanship, independently of the materials.

mrs. b.

The cheapness of these goods, although it arose from plenty, so far from being a sign of prosperity, entailed ruin on the manufacturers and their labourers.

caroline.

But you observed that if the price of a commodity would not defray all the expenses of production, it would not be made.

mrs. b.

In the case we have alluded to, the fall in price did not take place till after the production of the commodities; and the expense of labour having been already bestowed on them, it is better to sell them at any price than to lose entirely their value. But the manufacturers would in future take care to fabricate a smaller quantity, in consequence of which many of their labourers would be deprived of work, and part of their capital be thrown out of employ.

Plenty and cheapness are really advantageous only when they arise from a diminution of the cost of production. Thus when the use of any new machinery, or other improvement in the process of labour, enables farmers or manufacturers to produce commodities at less expense, the reduction of price is beneficial both to the producer and the consumer; to the former, because cheapness increases the number of purchasers; to the latter, because he obtains the commodity at less expense.

caroline.

But when nature gives us a superbundant supply of corn, the fall in price it occasions, is not, I suppose, attended with disadvantage?

mrs. b.

If the supply should be so great as to produce a glut in the market, and that the farmer should be under the necessity of selling his crops below the cost of production, the low price is not a benefit; for the evil arising from the check given to industry surpasses the immediate advantage of cheapness of corn. The farmers and their labourers would be the first sufferers; but it is probable that, in the end, the whole community would feel the effects the following season.

caroline.

True: for farmers would grow cautious, and cultivate less wheat, in order that it might not sell below its natural value; and, whilst they would be endeavouring exactly to proportion the supply to the demand, the season might chance to be less productive than usual, so as to occasion a scarcity of corn, which would be followed by a rise in the price of bread above the expense of its production.

mrs. b.

Very well. Tell me now whether the demand for bread is greatest when wheat is scarce or when it is plentiful?

caroline.

The demand which regulates the market price is greatest when wheat is scarce, for the utmost price that purchasers can afford will then be given for bread. But the effective demand is greatest when bread is plentiful; because then it is cheap, and more people have the power to purchase it.

mrs. b.

Thus, you see, when the supply equals the demand, the commodity is sold for its natural value, the producer making just the usual rate of profit. If the supply exceed the demand, it is sold below that value, the competition of producers or dealers to dispose of their goods, lowering the price. If the supply is less than the demand, the competition of purchasers raises the price of the commodity above its natural value, and the dealers make extraordinary profits.

caroline.

It must, then, be the interest of the farmer that corn should sell above its natural value; and the interest of the people that it should sell below it?

mrs. b.

If we extend our views beyond the present moment, it will appear that the interest of the producer and consumer of any commodity are the same; and that it is for the advantage of both that the price and natural value should coincide. If the consumers pay less for a commodity than its cost of production, the producers will take care to diminish the quantity in future, in order that competition may raise the price; for they could not, without exposing themselves to ruin, continue to supply the public with a commodity which did not repay them. If, on the other hand, the consumers pay more for an article than its natural value, the producers will be encouraged by their great profits to increase the supply, and the price will consequently fall until it is reduced to the natural value.

caroline.

I do not understand why the producers of a commodity should increase the supply, if the consequence is to lessen their profits?

mrs. b.

We are arguing under the supposition that competition is free and open, and in that case, you know, capital will immediately flow towards any branch of industry that affords extraordinary profits. If, therefore, the original producers of the profitable commodity did not increase the supply, they would soon meet with competitors, which would compel them to lower their price without increasing their sale.

“Price,” Mr. Buchanan observes, with great happiness of expression, “is the nicely poised balance with which nature weighs and distributes to her children their respective shares of her gifts, to prevent waste, and make them last out till re-produced.”

You will now be able to understand, that when you consider labour as a measure of value, you must estimate, not the quantity of labour bestowed on the production of any commodity, but the quantity of labour it can command; that is, that can be obtained in exchange for it. The former represents its natural value; the latter its market price, which is certainly the more accurate measure of value.

We have dwelt a long time upon the subject of value; and we may now conclude, that though a fluctuation in the exchangeable value of commodities may be occasioned by various circumstances, it will seldom deviate much from the natural value, or cost of production, which is a variable quantity, to which (when the employment of capital is left open) the exchangeable value will always tend to approximate.

caroline.

Value and wealth, I perceive, are far from being synonymous terms; for the increased value of food, in times of scarcity, indicates a diminution of wealth?

mrs. b.

Certainly. Wealth depends upon the abundance of commodities possessed, no matter what their production cost, whether the result of manual labour or machinery, whether obtained by fair or fraudulent means. The Romans were wealthy by conquest; the Carthaginians, by industry. Machinery augments the wealth of a country by facilitating the production of commodities, whilst, by reducing the cost of production, it reduces the value of those commodities.