of which we are now speaking; and this is the principal feature in the portion of scientific history which we have mentioned. For almost all that was to be done by reference to observation, was executed by Galileo and his disciples. What remained was the task of generalization and simplification. And this was promoted in no small degree by the various controversies which took place within that period concerning mechanical conceptions: as, for example, the questions concerning the measure of the Force of Percussion:-the war of the Vis Viva; the controversy of the Centre of Oscillation;-of the independence of Statics and Dynamics;-of the principle of Least Action;of the evidence of the Laws of Motion;-and of the number of Laws really distinct. None of these discussions was without its influence in giving generality and clearness to the mechanical ideas of mathematicians: and therefore though remote from general apprehension, and dealing with very abstract notions, they were of eminent use in the perfecting the Science of Mechanics. Similar controversies concerning fundamental notions, those, for example, which Galileo himself had to maintain, were no less useful in the formation of the Science of Hydrostatics. And the like struggles and conflicts, whether they take the form of controversies between several persons, or only operate in the efforts and fluctuations of the discoverer's mind, are always requisite before the conceptions acquire that clearness which makes them fit to appear in the enunciation of scientific truth." These remarks of the historian of the Inductive Sciences are an ample vindication of the discussions we have gone through; and it may be as well to conclude this chapter by presenting shortly the results of our investigations :

SUMMARY of DEFINITIONS.

ECONOMICS, or POLITICAL ECONOMY, or, as it is sometimes called, the SCIENCE OF WEALTH, is the Science which treats of the Laws which govern the relations of Exchangeable Quantities.

WEALTH, or EXCHANGEABLE QUANTITIES, or ECONOMIC QUANTITIES, are EXCHANGEABLE RIGHTS.

Economic Quantities are of three species:

1. Rights to material or corporeal things already acquired, such as lands, houses, corn, cattle, money, &c., usually called Corporeal or Material Property.

2. Rights to personal services of all sorts, or Labour; usually called Immaterial Property.

3. Rights to things only to be acquired at some future time; usually called Incorporeal Property.

VALUE.-The Value of any Economic Quantity is any other Economie Quantity for which it can be exchanged. MONEY is any Economic Quantity which a Debtor can by Law compel his Creditor to take in discharge of a debt. CREDIT is a Right of Action against a person for a sum of money. AN INSTRUMENT OF CREDIT is the written evidence of a Debt (See Chap. VII.).

DEBT is, properly speaking, the Duty to pay a sum of money to another person; but it is also often used in the sense of a right to demand a sum.

CURRENCY is a name applied to Money and Instruments of Credit, because the Property in them passes by delivery. EXCHANGE is where Economic Quantities of a like nature

are interchanged, as goods for goods, when it is often called BARTER: or currency for currency.

SALE, or CIRCULATION, is an exchange of any Economie Quantity for Currency.

CIRCULATING MEDIUM is the medium by which circula

tion, or sales, are effected—i. e., where goods are exchanged for currency it includes Money and Credit.

PRICE is the quantity of Money, or Credit, given for any Economic Quantity.

INTEREST is the sum paid for the use of a sum of money at the end of the agreed on period.

RATE OF INTEREST is the sum paid for the use of a sum

of money for a given period.

PROFIT is the excess of the price realized above the cost of any Economic Quantity offered for sale.

RATE OF PROFIT is the above excess made in a given time.

DISCOUNT is the difference between the Present Value of a Debt and its amount.

RATE OF DISCOUNT is the above difference with regard to a certain time.

A SECURITY FOR MONEY is the Right to demand a sum of money from a certain person.

A CONVERTIBLE SECURITY is any property which may be readily sold.

CAPITAL is any Economic Quantity used for the purpose of Profit.

FIXED CAPITAL is that which remains in the possession

of the owner while being used, and whose value is replaced by instalments in the price of the products. FLOATING CAPITAL is that which he parts with, and whose value is restored to him in one operation, in the price of the product.

PRODUCE; PRODUCER; PRODUCTION.

TO PRODUCE is to offer any Economic Quantity for sale or exchange.

The PRODUCER is the seller.

PRODUCTION is the offering any Economic Quantity for sale or exchange.

CONSUME; CONSUMER; CONSUMPTION.

To CONSUME is to purchase any Economic Quantity.
The CONSUMER is the buyer, or customer.

CONSUMPTION.-The purchase of any Economic Quantity. SUPPLY is the amount of any Economic Quantity offered for sale or exchange.

DEMAND is the Desire and the Power to purchase any Economic Quantity.

PRODUCTIVE LABOUR is Labour which produces a Profit, or draws forth something in exchange for it. UNPRODUCTIVE LABOUR is Labour which produces no profit, or an inadequate profit.

CHAPTER V.

THE THEORY OF VALUE.

PRELIMINARY REMARKS.

SECTION I.

AND

DEFINITION OF VALUE-ERROR OF THE EXPRES-
SION INTRINSIC VALUE DEPRECIATION
DIMINUTION IN VALUE- IMPOSSIBILITY OF A
STANDARD OF VALUE.

SECTION II. ON THE ORIGIN, SOURCE, OR CAUSE OF VALUE.
SECTION III. TO INVESTIGATE A GENERAL LAW OF VALUE:
OR THE GENERAL EQUATION OF ECONOMICS.

We have seen in the preceding chapter that writers in ancient times and all the principal Economists since Adam Smith have recognized the fact that there are three distinct species of Exchangeable Quantities, proceeding from three different sources, the Earth, the Human Mind, and the Human Will. It is also a matter of positive knowledge that there are no more than these three species: consequently, having applied the principles of Inductive Logic as laid down by Bacon, to generalize our fundamental Conceptions, so as to grasp all these three species, we are sure that our Conceptions cannot be overthrown or modified, because it is not possible that there should be any Economic Quantity which is not of the form of Money, Labour, or Credit.

The Physiocrates, who only admitted the material products of the earth to be wealth, said that all Products were ultimately exchanged against Products; a formula which was very incautiously adopted by J. B. Say. Beccaria, who would have attained a very high repute as an Economist if his lectures delivered in 1769 had not been suppressed until 1804, says ':"In every age there has been an exchange of products for products reciprocally superfluous and necessary, of services for products, and of services for services. Thus Beccaria only treated of two species of Exchangeable Quantities, and of three 1 Elementi di Economia pubblica; Prolusione.

kinds of exchange.

But we have shewn that there are three species of Exchangeable Quantities and Six different kinds of Exchange, which constitute the domain of the pure science of Economics, or Political Economy in its most modern definition. We have defined the Value of any Economic Quantity to be any other Economic Quantity for which it can be exchanged. Hence to investigate the Theory of Value is to investigate the laws which govern the relations of Exchangeable or Economic Quantities.

The complete Theory of Value comprises the following:1. The Definition of Value.

2. The Origin, Source, or Cause of Value.

3.

The General Law of Value: or the General Equation of Economics.

On each of these points there has been the most extraordinary conflict of opinion among writers. We shall, therefore, have to investigate each branch of the subject separately, as we have already done the general conceptions of the science. We shall have to generalize each of these branches by ascertaining and eliminating the accidental and intrusive ideas, so as to include the three different species of quantities; and we shall then have to investigate a general Law of Value, or a General Equation of Economics which must be applicable to all the six species of exchange, equally and indifferently: by the same Baconian Laws of Inductive Logic which have been held universally supreme in all other Physical Sciences.