Political Economy for the People

IN laying down the following principles, I have, in most instances, conformed to the most approved theories of value; carefully avoiding, however, those subtle questions to which speculations on the subject have sometimes given rise.

1. Value, in its largest sense, is that emotion of complacency by which we regard any of our qualities or possessions that, in any way, may minister to our gratification; as health, accomplishments of body or mind, the affection or esteem of others, land, money, or goods. The most precious of these are not transferable; and while the different values set on those priceless gifts by different persons, and yet more the difference in the modes of exhibiting them, cause great diversities of moral character, they are not at all regarded by the political economist. His speculations are limited to such objects of value as can pass from individual to individual, and which thus constitute the materials of exchange.

2. The practice of exchanging commodities is so universal, and of such frequent recurrence among men, that Adam Smith has regarded it as the result of a peculiar instinct; but it seems to require no other explanation than a reference to the predominant sway of man's self-love, in seeking to promote his interest, or add to his enjoyment, by exchanging what he values less for what he values more.

In civilized life these exchanges are indispensable not merely to man's comfort, but even to his subsist once. There, nearly all that he eats, drinks, or wears, is procured by exchanges, which it is the great use of money to facilitate; and, great as is its agency in this way, the use of credit -- that is, promises, written or oral, to pay money -- is far greater. If we look into the various occupations of men, we shall find that a main business of life consists either in making exchanges, or in preparing to make them. The agriculturist, by one set of exchanges, sells his raw produce, and, by another, buys comforts and luxuries for himself and his family. The manufacturer buys the raw material he requires, together with the services of his workmen and sells the fabric he has wrought. The merchant does nothing but buy and sell. The lawyer or physician exchanges his time and skill for money, or promises to pay it. The divine, too, exchanges his efforts to make men better and wiser, for the means of supporting his household. However human efforts may be directed, they terminate in exchanging what is possessed for what is more desired.

3. In all exchanges, whether by barter (commodity for commodity), or by sale (commodity for money), each party obtains as much, and parts with as little, as he can. Each one, however obtains more value than he gives, but as this is the case with both parties, the articles exchanged may commonly be considered as equivalents.