Monday, April 10, 2006



129. The second grand result from the principle of Equity—Cost the Limit of Price—is that the value of labor or of a commodity has nothing whatever legitimately with fixing the PRICE of the labor or commodity. This proposition would be deduced partially form what has been already shown; it requires, however, to be more explicitly stated and more conclusively demonstrated. It is, as well as the result considered in the last chapter in relation to natural skill or talent, quite new, and therefore surprising.

130. There is certainly nothing more reasonable, according to existing ideas, than that “a thing ought to bring what it is worth.” No proposition could be more seemingly innocent upon the face of it than that. (19.) There is no statement upon any subject upon which mankind would more generally concur, and yet that statement covers a fallacy which lies at the basis of the prevalent system of exploitation or civilized cannibalism. It is precisely at this point that the whole world has committed its most fatal blunder. It will be the purpose of this chapter to expose that error so obviously that it can no longer lurk in obscurity even in the least enlightened mind. To that end I beg the especial attention of the reader to the technical distinction between Value and Cost,--a point of great importance to this whole discussion.

131. “What a thing is worth” is another expression for the Value of a commodity or labor. The Value of a commodity or labor is the degree of benefit which it confers upon the person who receives it, or to whose use it is applied. The Cost of it is, on the other hand, as already explained, the degree of burden which the production of the commodity or the performance of the labor imposed upon the person who produced or performed it. They are therefore by no means the same. No two things can possibly be more distinct. The burden or cost may be very great and the benefit or value very little, or vice versa. In the case of an exchange or transfer of an article from one person to another, the Cost relates to the party who makes the transfer, the burden of the production falling on him, and the Value to the party to whom the transfer is made, the article going to his benefit. It is the same if the object exchanged is labor directly. It follows, therefore, that to say that a “thing should bring what it is worth,” which is the same as to say that its price should be measured by its value, is quite the opposite of affirming that it should bring as much as it cost the producer to produce it. Hence, both rules cannot be true, for they conflict with and destroy each other. But we have already seen that it is exactly equitable that Cost be adopted as the universal limit of price,--in other words, that as much burden shall be assumed by each party to the exchange as is imposed upon the opposite party. Consequently the accepted axiom of trade that “a thing should bring what it is worth” provides, when tested by simply balancing the scales of Equity, to be not only erroneous, but, so to speak, the antipodes of the true principle. Such is the result when we recur to fundamental investigation. It will be rendered equally obvious in the sequel, by a comparison of the consequences of the two principles in operation. That Cost is the true and Value the false measure of price.

132. But although Value is not the legitimate limit of Price nor even an element in the price, it is, nevertheless,, an element in the bargain. It is the Value of the thing to be acquired which determines the purchaser to purchase. It belongs to the man who labors or produces an article, estimating for himself, as we have seen, the amount of burden he has assumed, to fix the price, measured by that burden or Cost. He alone knows it, and he alone, therefore, can determine it. It belongs, on the other hand, to the purchaser to estimate for himself the Value of the labor or commodity to him. He alone can do so in fact, for he alone knows the nature of his own wants. By the settlement for the first point—-the Cost to the producer-—the Price becomes a fixed sum. If the Value then exceeds that sum in the estimation of the other party, he will purchase; otherwise, not. Hence the Value, though not an element in the Price, is an element in the bargain. The Price is a consideration wholly for the vendor, and the Value a consideration wholly for the purchaser.

133. As this is also a point of great importance, let us state it again. If you require and desire to obtain one hour or one year of my services, or the results of those services in commodities, which is the same thing, it is a matter which does not concern me,--it is impertinence on my part to concern myself with the question of the degree of benefit you will derive from such services. That is purely a question for your own consideration, and determines you whether the value to you equals the cost to me,--that is, it determines the demand. Your estimate of that value or benefit to you may be based on considerations obvious to others, or upon a mere whim or caprice to the gratification of which others would attach no importance. But it belongs to the Sovereignty of the Individual to gratify even one's whims or caprices without hindrance or interference from others, at his own cost, which is, when the services of others are required to that end, by paying to them the cost to them of such services.

134. On the other hand, it is equally an impertinence for you, in the case supposed, to attempt to settle for me the degree of attraction or repugnance which there is to me in the performance of the services which you require. No one else but myself can possibly know that. No one else can therefore fix a just price upon my labor. Hence it follows that both value and cost enter into a bargain, even when legitimately made. But value goes solely to determine the demand, and is solely cognizable by the purchaser or consumer,--by him who receives, while cost (or burden) goes to determine the price, and is solely cognizable by the seller or producer,--by him who renders. By this means the cost of one's acts is made to fall on himself, which is the essential condition to the rightful exercise of the Sovereignty of the Individual. If you overestimate the value to you of my services, you endure the cost or disagreeable consequences of your mistake or want of judgment. If I, on the other hand, underestimate the cost or endurance of the performance to me, the cost of that error falls on me, submitting each of us to the government of consequences, the only legitimate corrective. If, again, I overestimate the cost to me and ask a price greater than your estimate of the value to you, there is no bargain, and I have lost the opportunity of earning a price measured by the real cost of the performance, so that the cost of my mistake falls again on me; while-—the market being open, and a thorough adjustment of supply to demand being established—-others will make a juster estimate, whose services you will procure, and you will suffer no inconvenience. Competition will regulate any disposition on my part to overcharge. (160.)

135. All this is reversed in our existing commerce. The vendor adjusts his price to what he supposes to be its value to the purchaser,--that is, to the degree of want in which the purchaser is found,--never to what the commodity cost himself; thus interfering with what cannot concern him, except as a means of taking an undue advantage. The purchaser, on the other hand, offers a price based upon his knowledge or surmise of what the degree of want of the vendor may force him to consent to take. Hence the cannibalism of trade.

136. But it is objected that in the case supposed above, while nominally adjusting my price to the degree of repugnance to myself, I may in fact take into account the degree of your want, and charge you as much as I think you will endure. This objection, otherwise stated, is simply this,--that the Individual, in the exercise of his sovereign freedom, may abandon the Cost Principle, or, in other words, the true principle, and return to the value, or false principle. This is, in other words, again, simply to affirm that there is nothing in the true principle to force the Individual to comply with it, to the extent of depriving him of his freedom to do otherwise. This is granted. Any such compulsion would infringe upon the principle of the Sovereignty of the Individual, which is, if possible, still more important than the Cost Principle itself. Once for all let it be distinctly understood that the principles of Equitable Commerce do not serve directly and mainly to coerce men into true or harmonic relations when destitute of the desire for such relations. Their first office is, on the other hand, to inform those who do desire such relations, how they may be attained. If it is assumed that there are no such persons, then, certainly, the supply of true principles, of any sort, is a supply without a demand,--but not otherwise.

137. The secondary or indirect effect of true commercial principles in operation will be, however, correctional, and in one sense coercive, but coercive in a sense entirely compatible with freedom. It will be to throw the consequences of each one's deviation from right practice upon himself, leaving him free to exercise his own Sovereignty, but free to do so, as he ought, at his own cost, while they will surround him with a public sentiment in favor of honesty more potent than laws, at the same time that they will remove the temptations now existing to infringe the rights of others. It will be seen at another point that competition, which is now the tyrant that forces men to be dishonest, will, under these principles, operate with equal power to induce them to be honest. (160, 206.)

138. An illustration of the entire disconnection between Price and the Value to the purchaser is found in the one-price store, in existing commerce. Upon this plan of trade the prices are fixed by the merchant-vendor of the goods, and each article is labeled at a fixed and invariable amount. The customer has nothing whatever to do with fixing those prices. On the other hand, it is the purchaser alone who determines whether the Value of an article to him is sufficient to induce him to purchase at the price fixed. In these particulars the operation is the same as that of Equitable Commerce. It differs, however, in the essential particular that the merchant, in fixing his prices, is governed by no scientific principle. The prices are not adjusted by any equitable standard. They rest upon an uncertain and fluctuating basis, partly Cost, partly the necessities or cupidity of the vendor, and partly the supply and demand or the supposed Value to the purchaser. Value is thus made actually an element of the price in a general way, though not in the particular case. The vendor refuses to vary his price according to the particular Value to the particular purchaser, but he has previously taken into the account the general value to purchasers at large. The case is only good, therefore, to illustrate the single point for which it was adduced,--namely, the separability of Price and Value to the purchaser,--the fact that they are not necessarily commingled with each other. The ticket at the theater, the public lecture, the railroad, etc., furnishes another illustration of the same fact. The price is invariable, and the purchaser is left to determine for himself whether the Value equals the Cost; if so in his opinion, there is a bargain, otherwise not.

139. As respects the propriety of measuring Price by Value, in the first place, it is essentially impossible to measure Value EXACTLY, or, in other words, to ascertain the precise WORTH of labor of commodities.

Cost is a thing which looks to the past, and is therefore certain. Value is a thing which looks to the future, and is therefore contingent and uncertain. A bushel of potatoes lies before us. It is possible to estimate with accuracy how much human labor it ordinarily takes to produce that amount of that article, and how disagreeable the labor is as compared with other kinds, and then we have the standard cost of the article, but who will undertake to say what the value of that bushel of potatoes is as it stands in the market? Value, remember, is the degree of benefit it will confer upon the person or persons who are to consume it. That value, it is obvious, will vary with every one of the fifty thousand persons in the city who may chance to purchase it, and will vary with the extremes of saving twenty human lives (as it may do on shipboard, for example) and nothing at all, for the potatoes may stock a larder already overstocked and be permitted to decay, appropriated to no beneficial purpose whatsoever. As every one of the twenty starving persons would gladly have given at least ten thousand dollars for his share of the potatoes rather not have had them, the value of the bushel of potatoes is anything between cipher and two hundred thousand dollars.

Take a more complicated case. It is possible to calculate how much it costs, down to the fraction of a cent (or, more properly, of an hour's labor), to convey a man from New York to Albany on a first-class steamboat,--the Isaac Newton or the Hendrick Hudson for example,--taking into account the cost of construction, the cost of running, the number of persons regularly traveling among whom the expense is to be divided, etc. But who will undertake to calculate the different values of a trip up the Hudson to the eight hundred or a thousand persons who gather at the wharf at the departure of one of those magnificent boats? One is neglecting his business at home and going on a speculation in which he will lose a thousand dollars. How much is the trip worth to him? There is a bridegroom and bride going off to enjoy the honeymoon. How much in hard money is the trip worth to them? There stands a poor invalid who hopes to recover a little health by the cool breezes on the quiet river. There is a young man fresh from school, just starting out to see the world and gratify his curiosity. There is a sharper who will cheat somebody out of a few hundreds before he gets back, and so on. What is the Value to each of these of a trip up the Hudson? Value is the benefit to be done to each. How big is a piece of chalk? How much is considerable? How far is a good way? And yet all the political economy, all the calculations of finance, all the banking, all the trading and commercial transactions in the world, are based upon the idea of the measurement and comparison of Values. Even Mr. Kellogg, Mr. Gray, and others who write as financial reformers, and whose labors in demonstrating the oppressive operation of interest or rent on many are invaluable, fall into the same error. Mr. Kellogg has a chapter “On the Power of Money to Measure Value,” and assert without question that this is one of the legitimate functions of a circulating medium.

140. It is possible, it is true, for parties to form an estimate of relative values, based upon their present knowledge of all future contingencies, and thus to prefer one thing to another in a certain ratio; but the very next event which occurs may show the calculation of chances to have been entirely different from what was anticipated. Hence, every change, based upon the comparison of values, is a speculation upon the probabilities of the future, and not a scientific measurement of that which already exists. All trade under the existing system is therefore speculation, in kind, the uncertainty differing in degree, and all speculation, in kind, the uncertainty differing in degree, and all speculation is gambling or the staking of risks against risks. The instrument of measurement is equally defective, as has been already shown in discussing the nature of money. (77, 215.)

141. In the next place, if it were possible to measure Values precisely, the exchange of commodities according to Value would still be a system of mutual conquest and oppression,--not a beneficent reciprocation of equivalents. This will appear by one or two simple illustrations.

142. I.--Suppose I am a wheelwright in a small village, and the only one of my trade. You are traveling with certain valuables in your carriage, which breaks down opposite my shop. It will take an hour of my time to mend the carriage. You can get no other means of conveyance, and the loss to you, if you fail to arrive at the neighboring town in season for the sailing of a certain vessel, will be five hundred dollars, which fact you mention to me, in good faith, in order to quicken my exertions. I give one hour or my work and mend the carriage. What am I in equity entitled to charge—-what should be the limit of price upon my labor?

Let us apply the different measures, and see how they will operate. If Value is the limit of price, then the price of the hours labor should be five hundred dollars That is the equivalent of the value of the labor to you. If cost is the limit of price, then you should pay me a commodity, or commodities, or a representative in currency which will procure me commodities, having in them one hour's labor equally as hard as the mending of the carriage without the slightest reference to the degree of benefit which that labor has bestowed on you; or, putting the illustration in money, thus; assuming the twenty-five cents to be an equivalent for an hour's labor of an artisan in that particular trade, then according to the Cost Principle I should be justified in asking only twenty-five cents, but according to the Value Principle I should be justified in asking five hundred dollars.

143. The Value Principle, in some form of expression, is, as I have said, the only recognized principle of trade throughout the world. “A thing is worth what it will bring in the market.” Still if I were to charge you five hundred dollars, or a fourth part of that sum, and, taking advantage of your necessities, force you to pay it, everybody would denounce me, the poor wheelwright, as an extortioner and a scoundrel. Why? Simply because this is an unusual application of the principle. Wheelwrights seldom have a chance to make such a “speculation,” and therefore it is not according to the “established usages of trade.” Hence its manifest injustice shocks, in such a case, the common sense of right. Meanwhile you, a wealthy merchant, are daily rolling up an enormous fortune by doing business upon the same principle which you condemn in the wheelwright, and nobody finds fault. At every scarcity in the market you immediately raise the price of every article you hold. It is your business to take advantage of the necessities of those with whom you deal, by selling to them according to the Value to them, and not according to the Cost to you. You go further. You, by every means in your power, create those necessities by buying up particular articles and holding them out of the market until the demand becomes pressing, by circulating false reports of short crops, and by other similar tricks known to the trade. This is the same in principle as if the wheelwright had first dug the rut in which your carriage upset and then charged you the five hundred dollars.

Yet hitherto no one has thought of seriously questioning the principle,--namely, that “Value is the limit of Price,” or, in other words, that it is right to take for a thing what it is worth. It is upon this principle or maximum that all honorable trade professes now to be conducted, until instances arise in which its oppressive operation is so glaring and repugnant to the moral sense of mankind that those who carry it out are denounced as rogues and cheats. In this manner a sort of conventional limit is placed upon the application of a principle which is equally the principle of every swindling transaction, and of what is called legitimate commerce. The discovery has not hitherto been made that the principle itself is essentially vicious, and that in its infinite and all-pervading variety of applications this various principle is the source of the injustice, inequality of condition, and frightful pauperism and wretchedness which characterize the existing state of our so-called civilization. Still less has the discovery been made that there is another simple principle of traffic which, once understood and applied in practice, will effectually rectify all those monstrous evils, and introduce into human society the reign of absolute equity in all property relations, while it will lay the foundations of universal harmony in the social and moral relations as well.

144. II.--Suppose it costs me ten minutes' labor to concoct a pill which will save your life when nothing else will; and suppose, at the same time, to render the case simple, that the knowledge of the ingredients came to me by accident, without labor or cost. It is clear that your life is worth to you more than your fortune. Am I, then, entitled to demand of you for the nostrum the whole of your property, more or less? Clearly so, if it is right to take for a thing what it is worth, which is theoretically the highest ethics of trade.

145. Forced, on the one hand, by the impossibility, existing in the nature of things, of ascertaining and measuring positive values, or of determining, in other words, what a thing is really worth, and rendered partially conscious by the obvious hardship and injustice of every unusual or extreme application of the principle that it is either no rule or a bad one, and not guided by the knowledge of any true principle out of the labyrinth of conflicting rights into which the false principle conducts, the world has practically abandoned the attempt to combine Equity with Commerce, and lowered its standard of morality to the inverse statement of the formula,--namely that “A thing is worth what it will bring,” or, in other words, that it is fitting and proper to take for a thing when sold whatever can be got for it. This, then, is what is denominated the Market Value of an article, as distinguished from its actual value. Without being more equitable as a measure of price, it certainly has a great practical advantage over the more decent theoretical statement, in the fact that it is possible to ascertain by experiment how much you can force people, through their necessities, to give. The principle, in this form, measures the price by the degree of want on the part of the purchaser,--that is, by the degree of want on the part of the purchaser,--that is, by what he supposes will provide to be the value or benefit to him of the commodity purchased, in comparison with that of the one with which he parts in the transaction. Hence it becomes immediately and continually the interest of the seller to place the purchaser in a condition of as much want as possible, to “corner” him, as the phrase is in Wall Street, and force him to buy at the dearest rate. If he is unable to increase his actual necessity, the resorts to every means of creating an imaginary want by false praises bestowed upon the qualities and uses of his goods. Hence the usages of forestalling the market, of confusing the public knowledge of Supply and Demand, of advertising and puffing worthless commodities, and the like, which constitute the existing commercial system,--a system which in our age, is ripening into putrefaction, and coming to offend the nostrils of good taste no less than the innate sense of right, which, dreadfully vitiating as it is, has failed wholly to extinguish.

146. The Value Principle in this form, as in the other, is therefore felt, without being distinctly understood, to be essentially diabolical, and hence it undergoes again a kind of sentimental modification wherever the sentiment for honesty is most potent. This last and highest expression of the doctrine of honesty, as now known in the world, may be stated in the form of the hortatory precept, “Don't be too bad,” or “Don't gouge too deep.” No Political Economist, Financier, Moralist or Religionist has any more definite standard of right in commercial transactions than that. It is not too much to affirm that neither Political Economist, Financier, Moralist, nor Religionist knows at this day, nor ever has known, what it is to be honest. The religious teacher, who exhorts his hearers from Sabbath to Sabbath to be fair in their dealings with each other and with the outside world, does not know, and could not for his life tell, how much he is, in fair dealing or equity, bound to pay his washerwoman or his housekeeper for any service whatever which they may render. The sentiment of honesty exists, but the science of honesty is wanting. The sentiment is first in order. The science must be an outgrowth, a consequential development, of the sentiment. The precepts of Christian Morality deal properly with that which is the soul of the other, leaving to intellectual investigation the discovery of its scientific complement.

147. It follows from what has been said that the Value Principle is the commercial embodiment of the essential element of conquest and war,--war transferred from the battlefield to the counter,--none the less opposed, however, to the spirit of Christian Morality or the sentiment of human brotherhood. In bodily conflict the physically strong conquer and subject the physically weak. In the conflict of trade the intellectually astute and powerful conquer and subject those who are intellectually feeble, or whose intellectual development is not of the precise kind to fit them for the conflict of wits in the matter of trade. With the progress of civilization and development we have ceased to think that superior physical strength gives the right of conquest and subjugation. We have graduated, in idea, out of the period of physical dominion. We remain, however, as yet in the period of intellectual conquest or plunder. It has not been questioned hitherto, as a general proposition, that the man who has superior intellectual endowments to others has a right resulting therefrom to profit thereby at the cost of others. In the extreme applications of the admission only is the conclusion ever denied. In the whole field of what are denominated the legitimate operations of trade there is no other law recognized than the relative “smartness” or shrewdness of the parties, modified at most by the sentimental precept stated above.

148. The intrinsic wrongfulness of the principal axioms and practice of existing commerce will appear to every reflecting mind from the preceding analysis. It will be proper, however, before dismissing the consideration of the Value Principle, to trace out a little more in detail some of its specific results.

The principle itself being essentially iniquitous, all the fruits of the principle are necessarily pernicious.

149. I.--It renders falsehood and hypocrisy a necessary concomitant of trade. Where the object is to by cheap and sell dear, the parties find their interest in mutual deception. It is taught, in theory, that “honesty is the best policy,” in the long run, but in practice the merchant discovers speedily that he must starve if he acts upon the precept—-in the short run. Honesty-—even as much honesty as can be arrived at—-is not the best policy under the present unscientific system of commerce, if by the best policy is meant that which tends to success in business. Professional merchants know the fact well, and conscientious merchants deplore it; but they see no remedy. The theory of trade taught to innocent youths in the retired family, or the Sunday school, would ruin any clerk, if adhered to behind the counter, in a fortnight. Hence it is uniformly abandoned and a new system of morality acquired the moment a practical application is to be made of the instruction. A frank disclosure, by the merchant, of all the secret advantages in his possession would destroy his reputation for sagacity as effectually as it would that of the gambler among this associates. Both commerce and gambling, as professions, are systems of strategy. It is the business of both parties to a trade to overreach each other,--a fact which finds its unblushing announcement in the maxim of the Common Law, Caveat emptor (let the purchaser take care).

150. II—It makes the rich richer, and the poor poorer. Trade being, under this system, the intellectual correspondence to the occupation of the cut-throat or conqueror under the reign of physical force, the stronger consequently accumulating more than his share at the cost of the destruction of the weaker,--the consequence of the principle is that the occupation of trade, for those who possess intellectual superiority, with other favorable conditions, enables them to accumulate more than their share of wealth, while it reduces those whose intellectual development—of the precise kind requisite for this species of contest—and whose material conditions are less favorable, to wretchedness and poverty.

151. III.--It creates trade for trade's sake, and augments the number of non-producers, whose support is chargeable upon labor. As trade, under the operation of this principle, offers the temptation of illicit gains and rapid wealth at the expense of others, it creates trade where there is no necessity for trade,--not as a beneficent interchange of commodities between producers and consumers, but as a means of speculation. Hence thousands are withdrawn from actual production and thrust unnecessarily into the business of exchanging, mutually devouring each other by competition, and drawing their subsistence and their wealth from the producing classes, without rendering any equivalent service. Hence the interminable range of intermediates between the producer and consumer, the total defeat of organization and economy in the distribution of products, and the intolerable burden of the unproductive classes upon labor, together with a host of the frightful results of pauperism and crime.

152. IV.--It degrades the dignity of labor. Inasmuch as trade, under the operation of this principle, is more profitable or at any rate is liable to be, promises to be, and in a portion of cases is more profitable than productive labor, it follows that the road to wealth and social distinction lies in that direction. Hence “Commerce is King.” Hence, again, productive labor is depreciated and condemned. It holds the same relation to commerce in this age-—under the reign of intellectual superiority—-that commerce itself held a few generations since—-under the reign of physical force—-to military achievement, personal or hereditary. Thus the degradation of labor, and all the innumerable evils which follow in its train, in our existing civilization, find their efficient cause in this same false principle of exchanging products. The next stage of progress will be the inauguration of Equity,--equality in the results of every species of industry according to burdens and the consequent accession of labor to the highest rank of human estimation. Commerce will then sink to a mere brokerage, paid, like any other species of labor, according to its repugnance, as the army is now sinking to a mere police force. It will be reduced to the simplest and most direct methods of exchange, and made to be the merest servant of production, which will come, in its turn, to be regarded as conferring the only true patents of nobility.

153. V.--It prevents the possibility of a scientific Adjustment of Supply to Demand. It has been already shown that speculation is the cause why there has never been, and cannot now be, any scientific Adaptation of Supply to Demand. (35, 36.) It has also been partially shown, at various points, that speculation, or trading in chances and fluctuations in the market, has its root in the Value Principle, and that the Cost Principle extinguishes speculation. It will be proper, however, in this connection to define exactly the limits of speculation, and to point out more specifically how the Value Principle creates it, and how the Cost Principle extinguishes it.

154. By speculation is meant, in the ordinary language of trade, risky and unusual enterprises entered upon for the sake of more than ordinary profits, and in that sense there is attached to it, among merchants, a slight shade of imputation of dishonesty or disreputable conduct. As we are seeking now, however, to employ language in an exact and scientific way, we must find a more precise definition of the term. The line between ordinary and more than ordinary profits is too vague for a scientific treatise. At one extremity of the long succession of chance-dealing and advantage-taking transactions stands gambling, which is denounced by the common verdict of mankind as merely a more specious form of robbery. It holds the same relation to robbery itself that dueling holds to murder. Where is the other end of succession? At what point does a man begin to take an undue advantage of his fellow-man in a commercial transaction? It clearly appears, from all that has been shown, that he does so from the moment that he receives from him more than an exact equivalent of cost. But it is the constant endeavor of every trader, upon any other than the Cost Principle, to do that. The business of the merchant is profit-making. Profit signifies, etymologically, something made over and above,--that is, something beyond an equivalent, or, in its simplest expression, something for nothing.

155. It is clear, then, that there is no difference between profit-making in its mildest form, speculation in its opprobrious sense as the middle term, and gambling as the ultimate, except in degree. There is simply the bad gradation of rank which there is between the slaveholder, the driver on the slave plantation, and the slave dealer, or between the man of pleasure, the harlot, and the pimp.

156. The philanthropy of the age is moving heaven and earth to the overthrow of the institution of slavery. But slavery has no scientific definition. It is thought to consist in the feature of chattelism, but an ingenious lawyer would run his pen through every statute upon slavery in existence, and expunge that fiction of the law, and yet leave slavery, for all practical purposes, precisely what it is now. It needs only to appropriate the services of the man by operation of law, instead of the man himself. The only distinction, then, left between his condition and that of the laborer who is robbed by the operation of a false commercial principle would be in the fact of the oppression being more tangible and undisguisedly degrading to his manhood.

157. If, in any transaction, I get from you some portion of your earnings without an equivalent, I begin to make you my slave,--to confiscate you in my uses; if I get a larger portion of your services without an equivalent, I make you still further my slave; and, finally, I obtain the whole of your services without an equivalent,--except the means of keeping you in working condition for my sake,--I make you completely my slave. Slavery is merely one development of a general system of human oppression, for which we have no comprehensive term in English, but which the French Socialists denominate exploitation,--the abstraction, directly or indirectly, from the working classes of the fruits of their labor. In the case of the slave the instrument of that abstraction is force and legal enactment. In the case of the laborer, generally, it is speculation in the large sense, or profit-making. The slaveholder will be found, therefore, upon a scientific analysis, to hold the same relation to the trader, which the freebooter holds to the blackleg. It is a question of taste which to admire most, the dare-devil boldness of the one, or the oily and intriguing propensities and performances of the other.

158. But, you exclaim, why should I sell at cost? How am I to live as a merchant without profits? Never you mind. That is not the question now up. Perhaps the world has no particular use for you as a merchant. We will take care of all that by and by. Just now all that we are doing is to settle the nature of certain principles. We shall want some merchants after all, and will pay them just what they are equitably entitled to. Do you want more? I shall now be understood when I say that the Cost Principle is merely the mutual abandonment, on all hands, of every species of PROFIT-MAKING,--each contenting himself with simple EQUIVALENTS OF COST in every exchange. It will be perceived, too, that the term speculation is used as synonymous with profit-making, when it is affirmed that that has hitherto defeated the Adaptation of Supply to Demand. With the cessation of profit-making there is no longer any temptation to conceal from each other any species of knowledge bearing upon that subject. At that point gazetteers, catalogs, and statistical publications of all sorts spring into existence, giving exact information upon every point connected with the demand and supply of labor and commodities and the production and distribution of wealth.

159. VI.--The Value Principle renders Competition destructive and desperate. The general subject of Competition will be more fully considered under another head. (202.) The consequence here stated follows in part as a necessary result of the preceding one, the want of Adaptation of Supply to Demand, and in part from the robbery of labor by the system now in operation. In the existing state of things there is an apparent surplus of both commodities and laborers, and the result is that men and women who are able to work, and willing to work, are not able to find employment. Hence, to be thrown out of occupation by competition is a frightful calamity, always implying distress, frequently destitution and wretchedness, and sometimes absolute starvation, while the fear of such a catastrophe is a demon which haunts continually the imagination of the workingman, afflicting him with a misery hardly less real than the occurrence of the calamity itself. It is the tendency and direct effect of competition to throw out the inferior workman from every occupation, and to supply his place by the superior workman in that particular branch of industry. This tendency, direful as its consequences are in the existing state of things, is nevertheless a right tendency, and society ought to be organized upon such principles that it should have full pay-—to an extent far beyond what it now has—-with no other than beneficent results to all. It is perfectly right that the inferior workman should be thrown out of any employment to make room for the superior workman in that employment. To retain the inferior workman in any occupation, while there is in the whole world a superior workman for that occupation, who can do the same work at less cost, and therefore upon the Cost Principle at a less price, is bad economy of means,--as base as it is to employ an inferior machine or process after a superior machine or process has been discovered,--and any system or set of relations which works out bad results from such appropriate substitution of the superior for the inferior instrument must be itself essentially bad.

160. It is now calamitous for any person to be thrown out of his particular occupation for several reasons, all of which either relate directly to the operations of the Value Principle, or indirectly to it, through the general want of the Adaptation of Supply to Demand, which is occasioned by it.

161. The principal of these are: I. Because when one avenue to industry is closed another is not opened; as would be the case if supply and demand were accurately adjusted; and hence apparently there is not enough labor for all. In the existing order, or rather disorder of commerce, there is what is called over-production. More of a given article seems to be produced than is wanted, which is shown by the fact that it cannot be disposed of in the market at any price. With all the irregularities of existing commerce this seldom happens. The evil does not generally go beyond the reduction of price. When it does, it is because there is now no provisory means of adjusting supply and demand. The producer cannot know beforehand, for example, precisely how many persons are engaged in rearing the particular kind of fruit which he cultivates, what number of trees they have, the amount of fruit annually consumed in the city where they find their market, etc. But although the workings of the law of supply and demand are not pointed out to him beforehand, the law is sure to work nevertheless. It is inflexible as the law of the Medes and Persians. It will punish the error, although it did not prevent it. The over-supply may happen one year, but it will not happen the second and the third years. The persons employed in that kind of production will find their way into other pursuits. In a country which should prohibit all change of pursuits, that remedy would not exist. The evil would have to go on, or be remedied by the starvation of the producer of the given article. In America, where the avenues to every pursuit are more open than elsewhere, the remedy is more speedy than elsewhere. Under the reign of Equity, the evil would not exist, because there would be a provisory adjustment of the supply to the demand, and, if it did occur, the remedy would be immediate, because ALL avenues to ALL pursuits would be open to ALL by means of that adjustment, and the general preparedness of all to change rapidly their pursuits, together with the general prevalence of cooperation. (163.)

Still there is, in the nature of things, and apart from the workings of any particular system, a limit to the demand for every article. When that demand is supplied, must not the demand for labor cease? Certainly, for the production of more of that particular article. We have seen, however, that that labor will go into different avenues,--that is, into the production of other articles. If the question is, whether all the wants of all mankind will not be so completely supplied that there will be no occasion for further labor, the answer is three-fold. First, so soon as the labor ceased, consumption would reproduce the wants and the demand. Secondly, if this were partially so, it would only give additional leisure for mental improvement and other means of enjoyment to all mankind by emancipating them so far from the necessity of labor. Thirdly, the wants of human beings are infinite. As the lower wants are supplied higher wants are developed. As soon as men and women have ordinary food, clothing, and shelter, they demand luxuries, and these of a higher and still higher class. The gratification of every taste creates a new demand. It is impossible, therefore, that the demand for human labor, and for all the labor which can be given, should ever cease. Hence there is no such thing possible as a real overstocking of the world with labor, or the products of labor. There is no such thing possible as a real dearth of labor to be performed. With all the avenues continually open, there will then always be a demand for all the labor that any body is ready to perform, even down to the inferior and lowest grades of skill. It will be still more clearly shown, in treating of the remaining results of the Cost Principle, how, under the true system, the avenues to every pursuit will be open to every individual at all times without artificial obstacles, and how there will be at all times labor enough for all. (213.)

162. 2. Because, when avenues are open to new pursuits, men and women are not now prepared to avail themselves of them. This unpreparedness results from their wretchedly cramped and insufficient industrial education. This results again from speculation. Men now strive, on all hands, to monopolize those occupations which are most profitable, and hence to exclude others from acquiring the necessary knowledge to enable them to enter them. Hence there results from the value or profit-making principle a general embargo on knowledge, and the reduction of all classes to narrowness of information and general ignorance. Information in any trade or pursuit is made a means of speculation. Hence the barbarous system of 7 years' apprenticeship, and other similar absurdities. Hence, when men and women are thrown out of any particular occupation to which they have been bred and molded, they are fitted for nothing but pauperism. Under the operation of the Cost Principle all this will be reversed. Every member of the community will be a MAN or a WOMAN, competent to do various things,--not a mere appendage to a trade, carrying from the cradle to the grave the badge of servitude in the degrading appellation of tailor, weaver, shoemaker, joiner, and the like. Now, shops are fenced in, locked and bolted, to keep out intruders and shut up the information contained in them. Trades are hedged in by the absurd and barbarous system based on Value. Men who have knowledge of any kind hoard it. They look, unnaturally, upon those who would learn of them as if they were enemies. As the result, the avenues to different occupations are everywhere obstructed by artificial obstacles. Then information of all sorts will be freely given to all. Suggestions will be made on all hands, aiding every one to enter that career in which he can most benefit, not himself only, but the whole public. In a word, all the avenues to every occupation will be thrown completely open to all, and all knowledge be freely furnished to all at the mere cost of the labor of communicating it, measured, like any labor, by its repugnance only.

163. VII.--The Value Principle renders the invention of new machinery a widespread calamity, instead of a universal blessing. The hostility so generally felt by laboring men to new inventions is not without reason. It is certainly true that machinery is a great benefit to mankind at large, and that in the aggregate and in the long run it improves the condition even of laboring men as a class. But it is equally true, on the other hand, that every invention of a labor-saving process is, under the present arrangements of society, an immediate individual misfortune, and frequently nothing less than ruin and starvation to a large number of individuals of that class. This result comes from the causes stated above, stated above, which render it impossible for the laborer to pass rapidly and harmoniously from one occupation to another, and from the monopoly of the immediate benefits of the saving secured by the machine, by capital, and all these again from profit-making or the operation of the Value Principle. It is the same with competition and machinery. Competition, even in the present order of things, is productive of far more good than evil, looking to the aggregate and the long run, while it is ruinous and destructive immediately and individually. Under the new order both will become purely harmonic and beneficent. (208, 243.)

164. This catalog of the deleterious results of the false principle of trade might and should be extended, and the details expanded beyond what the limits of this work will allow. The reader will add, for himself, the monopolizing of natural wealth, the perversion of skill to the shamming or adulteration of every species of commodity, the waste of time and exertion in detecting and defeating frauds and cheats, the general want of economy in the production of wealth, the cost of convicting and punishing criminals, constructing poor-houses and prisons, etc., etc., ad infinitum.

It must suffice here to affirm that out of these several consequences of the operation of the Value Principle results that complicated systems of injustice, discord, distrust, and repulsion which harmony, and which characterizes, in the most eminent degree, in the midst of their success, the most commercial and prosperous nations. The comparison of the present is not to be instituted, however, mainly, with any condition of society prior to the commercial age, since different manifestations of the want of equity have characterized them also. The exhibition of relations of truth in human intercourse could not precede the discovery of the principles according to which such relations must be adjusted.

165. The operation of the Cost Principle reverses every one of the consequences which I have pointed out or intimated as the legitimate fruits of the principle which now governs the property relations of mankind. In the next chapter we shall return to the consideration of the results of the true principle.


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