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portion of these stocks is held by foreigners, the aggregate wealth of the community does not consist even of the whole amount of those articles within its territory which are properly considered as wealth, but only of that amount minus the evidences of indebtedness to foreigners. If I buy $1,000 worth of government securities, I really lend $1,000 to the government, which, in return, mortgages to me a portion of its revenues, or of the sum which it annually raises by taxation. This sum is that portion of the valuable articles annually created by the labor of the community which the government appropriates to itself, as a compensation for the care and protection which it affords. What I really own, then, is this share of the useful articles annually produced by the labor of the whole people, which is transferred, first by the people to the government, and then by the government to me. The scrap of paper, called “public stock,” which I hold, is of no value whatever, except as it enables me to claim without dispute my share of this annual product.

These truths are elementary and sufficiently obvious; but it was necessary to state them in order to clear the ground for the solution of the problem with which we are now concerned: - What are the essential qualities of wealth, and how is it created? How is it, that the national stock of wealth, which we are perpetually consuming, is yet perpetually reproduced, and that, too, with a profit, or constant enlargement, so that the stock at the end of the year is considerably larger than it was at the year's commencement ?

As soon as we clearly perceive that wealth consists exclu sively of those useful articles, chiefly material or tangible, which have been indicated, and that we have nothing to do with the intricate complications of property which arise from the dealings of men in the banks and the stock market, the answer to this question becomes very easy. Wealth is created by devoting human labor to the production and fashioning of these useful articles ; — by tilling the ground and raising harvests of food and of the raw materials for manufacture; by spinning, weaving, and sewing; by erecting houses, working mines, and building ships; by any and every application of industry which is essential to the full enjoyment of these articles, or which has directly or indirectly concurred in their formation.

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Human labor, whether skilful or unskilful, whether applied alone or artfully assisted by natural agents, is the means; wealth is the product. Whatever is necessary in order that the workman may apply himself more directly and successfully, and with less interruption, to his task, must be considered as a portion of the industry which concurs in the formation of the article produced by that workman.

Thus, he must feel secure in his employment, against violence, robbery, or any improper or wrongful interruption of his labor. Government affords him this security, and is, to this extent, a fellow-producer with him, so that it rightfully claims a share - a very small share — of the finished product. “ On the governor, and those with whom he is associated, or whom he appoints," says Mr. Senior, “is devolved the care of defending the community from violence and fraud; and so far as internal violence is concerned, and that is the evil most dreaded in civilized society, it is wonderful how small a number of persons can provide for the security of multitudes. About 15,000 soldiers, and not 15,000 policemen, watchmen, and officers of justice, protect the persons and property of the 18 millions of inhabitants of Great Britain. There is scarcely a trade that does not engross the labor of a greater number of persons than are employed to perform this most important of all services."

The coöperation which the laborer requires, in a highly civilized community, for the completion of his task, in order to present the article in a state fit for use, is far more extensive than we are apt, at first sight, to imagine. Thus, bread is a finished product, the total value of which must compensate a long line of laborers who have concurred in its formation. The tradesman who brings it to your door ; the baker; the miller; the farm laborers who plough, sow, and reap; the farmer or land-owner; and all the artisans who have fabricated all the tools and instruments used by these persons, - must all have their share of the price finally paid for the bread which is fully prepared to be eaten. The extensive coöperation of employments, produced by the minute subdivision of labor, is the most striking feature of modern civilization. The object of this immense subdivision is to secure the greatest possible efficiency of labor, – that everything may be produced on the spot best

suited for its production; that every step in the process of its manufacture may be taken by the person most capable of taking it to advantage, and under the most favorable circumstances; and that the article itself, when finished, may be adapted, even in the slightest particulars, to the wants, tastes, and convenience of those who are to use it.

The value which may be added to the article by the numerous steps of this long process may be very great. “We should probably be 'understating the difference,” says Mr. Senior, “if we were to say that the last price was a thousand times the first. The price of a pound of the finest cotton-wool, as it is gathered, is less than two shillings. A pound of the finest cotton lace might easily be worth more than a hundred guineas."

We gain another view of this marvellous coöperation of individuals, designed to make labor most efficient, by searching out the history, analyzing the cost, and tracing the processes of manufacture, of all the articles of our own daily consumption. We think it little to sit down to a table covered with articles from all quarters of the globe and from the remotest isles of the sea ; — with tea from China, coffee from Brazil, spices from the East and sugar from the West Indies, knives from Sheffield, made with iron from Sweden and ivory from Africa, with silver from Mexico, and cotton from South Carolina, all being lighted with oil brought from New Zealand or the Arctic Circle. Still less do we think of the great number of persons whose united agency is required to bring any one of these finished products to our homes ; — of the merchants, insurers, sailors, ship-builders, cordage and sail-makers, astronomical-instrument makers, men of science, and others, who must concur before a pound of tea can appear in our market. In view of these circumstances, it is no exaggeration to say, that the humble artisan, who spends his life, to adopt Adam Smith's illustration, in making the eighteenth part of a pin, and is hardly fitted for any higher employment, still taxes the industry of half the human race, and lays under contribution the four quarters of the globe, to supply his daily wants.

How is it, that while, in these days, men will not often labor for nothing, and while the artisan himself produces nothing but the fraction of a pin, he is still able to consume so great a variety of products, and to make the industry of so vast a multitude tributary to his comforts. The answer may be given in one word; by exchange. As human labor is the only motive power, so capability of exchange is the sole directing agent, in the great social machine for the production of wealth. The immediate measure of the wealth, when produced, is, not its utility, but its exchangeable value; and Political Economy itself, as I have already remarked, has been denominated Catallactics, or the Science of Exchanges.

We come, then, to an analysis of exchangeable value, in order to find a basis for a theory of wealth. What is it that constitutes value in exchange, and why do various articles possess it in such unequal proportions ? The answer is, that exchangeable value consists of two elements, - utility, and difficulty of attainment. The article valued must in some measure be useful; that is, it must be adapted to satisfy, either directly or indirectly, some natural want or artificial desire of men; and it must also be more or less difficult to be had. These elements may coexist in very different proportions; but in one degree or another they must both be present, or the article has no value in exchange. It may, for instance, be very useful; it may be an article of prime necessity, absolutely essential to the existence of man. Yet if there be no difficulty in the way of its attainment, if, like the air, the water, and the sunlight, the supply of it be inexhaustible and open to all the world, then it has no exchangeable value. It forms no part of what is usually called wealth. Supply the element which was lacking, - only make the article hard to be procured, as water is, in the midst of the sandy desert of Sahara, or as air was to Mr. Holwell and his companions in the Black Hole at Calcutta, and men will give all that they have in the world for a single draught of either. On the other hand, it may be very difficult of attainment; it may, like some of the most refined products of chemical analysis, require the labor of years, the greatest scientific skill, and an expenditure of the most costly materials, before it can be procured. Yet if it be not useful, if it do not satisfy some want or desire, however artificial or irrational that desire may be, it commands no price in the market; it has no exchangeable value.

But we do not here speak of abstract utility, or of that utility which is determined by reason and measured by a philo

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sophical standard. Utility here means nothing but fitness or capability to satisfy any desire of men, however unreasonable, extravagant, or capricious that desire may be. If men are so foolish as to prize highly many articles which answer no purposes but of vain ostentation or gross and sensual enjoyment, it is not for the political economist, who views things only as they are, not as they ought to be, to censure their folly. He leaves this office to the moralist or the preacher. The fact that such articles are coveted, from whatever motive, is enough to bring them within his definition of wealth; which definition, it is evident, only expresses the common sentiment of mankind.

One factitious desire, it is curious to observe, is created solely by the difficulty of obtaining its object. Thus, books, coins, and shells are often prized merely from their rarity, or the difficulty of procuring duplicates of them; and in the case of books this passion has gone so far, that it has been aptly called bibliomania, or book-madness. An old volume, which, for all the proper purposes of a book, is absolutely worthless, since no person in his senses would ever think of reading it, if it happens to be what is called a unique copy, may command a price equal to that of a fine painting by one of the old masters. And this last instance shows also, that the want or taste which the article gratifies, and in grațifying which its utility, and consequently its exchangeable value, consists, may not be a common one, — may be shared, in fact, only by a very few persons in the community. Very few, certainly, are capable of appreciating a Raphael or a Correggio, or of seeing in it those beauties which make it command a price equal to a king's ransom.

As the words value and utility are often used in the moralist's sense, or according to their philosophical import, it is necessary to give this caution once for all; - that whenever in future they are here used, they must be understood only in their politico-economical signification. By value, we mean only exchangeable value ; by utility, we mean only that utility which is an element of wealth, and which consists in fitness to satisfy any want or desire, however irrational, that is felt by any number of men.

This analysis of value, this explanation of what wealth is,

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