Political Economy for the People

4. No solitary exchange affords certain evidence of the precise value of the articles exchanged, even in the estimation of the parties, as the buyer might have given more and the seller have taken less, if necessary to the bargain. Thus, a horse is sold for one hundred dollars, but the seller might have taken ninety dollars rather than have missed the sale; and the buyer might have given an hundred and ten dollars or more, rather than not have made the purchase. But where there is a free competition among both sellers and buyers, as is the case with articles extensively consumed, the conflicting efforts of the parties settle down on what is called the market price.

5. For an article to have a value that may be exchanged for another value -- called, hence, its value in exchange, or exchangeable value -- it must have desirableness, and be acquired with some difficulty, that is, at some cost of labor or privation. If the latter element be wanting, the article, whatever may be its utility, has no exchangeable value or price in the market. Thus air, light, and water are indispensable to men's comfort, and two of them even vital to his existence; yet, from the abundance with which they have been furnished by nature, they generally have no exchangeable value. Let, however, the supply of these natural bounties be intercepted, and immediately their natural value gives them value in exchange. Thus, water, which in some of the West Indies is supplied wholly by rain, and is kept in cisterns or tanks, becomes, in times of long drought, an article of traffic, so that a hogshead of rum has been exchanged for a hogshead of water. Even in New York, before the Croton aqueduct, water, of a purer quality than was furnished by the neighboring springs was regularly sold. So, too, light, which, during the day, is furnished gratuitously by nature, has immense exchangeable value in the night, as is evinced by the sums expended for gas, lamps, oil, and candles. Even in the day, much is spent for the same object, in glass windows, and in lighting cellars and dark passages. Air, also, which is so abundant as to fill all space on our globe, may, under peculiar circumstances, have great exchangeable value; and there was no one of the Englishmen suffocated in the Black Hole of Calcutta, who would not have gladly given his estate for a few gallons of pure air. The same fact is manifested by the money which is occasionally expended for the ventilation required by our mansions and public edifices.

In like manner, heat, which is essential to human comfort, and which is gratuitously and profusely supplied to the inhabitants of the Torrid Zone, is purchased in the other regions of the earth at an enormous expense in fuel, warm clothing, and the construction of our buildings, public and private.

6. The difficulty of obtaining an article, which we have seen to be one of its elements of exchangeable value, is of two kinds: one consists in the labor, skill, and capital expended in its production; the other, in its relative scarcity. In the first case, the value depends upon the cost of producing it; and, supposing the labor and skill expended to be those of ordinary men, commodities will have value according to the time or labor required for their production. Thus, an article which it has cost one day to produce, will exchange for another produced in the same time. If it take as long to make a pair of shoes as a hat, supposing the materials to be of equal value, so will be the value of the hat and the shoes. Supposing it costs twice as much labor to produce a bushel of wheat as a bushel of corn, a bushel of the former will be worth two bushels of the latter.