Equivalence (economics)

“ Hence, equal right here is still in principle -- bourgeois right, although principle and practice are no longer at loggerheads, while the exchange of equivalents in commodity exchange exists only on the average and not in the individual case. ”

“ These commodities, which the paper stands in the place of, are the price of what was received. The equitable limit of price it is contended is the cost of the articles received. The promise is, therefore, rightly the equivalent of, or goes to the extent of, the cost of the articles received. But the cost of an article is, we have seen, the labour there is in it, rightly measured. Every issue of the circulating medium should therefore be a representative of, or pledge for, a certain amount of human labour, or for some commodity which has in it an equal amount of human labour ”

“ In an equitable exchange, the exchange value of the products would have to equal the quantity of labour needed for producing them, and an exchange of products would always mean an exchange of equal quantities of labour. Even assuming, however, that everybody produced just those use-values which another person requires, yet, ‘since we are here concerned with human discernment and human volition, there must always be for a start a correct calculation, adjustment and allocation of the labour quantities contained in the products for exchange, there must be a law to which the facts will conform’. ”

“ But since the cost of production to the capitalist is not labour but wages, and since wages may be either greater or less, the quantity of labour being the same; it would seem that the value of the product cannot be determined solely by the quantity of labour, but by the quantity together with the remuneration ”

“ Presumably, then, as Production of Wealth has two Basic factors—in technical terms Labor and Land, in other terms Man and Natural Resources—so Distribution of Wealth has two basic apportionments, one corresponding to the Labor or Man factor in Production, the other to the Land or Natural Resource factor—Wages for Labor, Rent for permission to use Land.
That there can be neither Wages for Labor nor Rent for Land unless Wealth has been produced, is a manifest law of nature. The nonexistent being naturally indivisible, Production of Wealth must precede Distribution of Wealth. ”

“ Inequality of wages, like the right of increase, is economically impossible. Take the most favorable case,—that where each laborer has furnished his maximum production; that there may be an equitable distribution of products, the share of each must be equal to the quotient of the total production divided by the number of laborers. ”

“ In the early stages of society, the exchangeable value of these commodities, or the rule which determines how much of one shall be given in exchange for another, depends solely on the comparative quantity of labour expended on each. ”

“ If we examine, on what the pecuniary value of labour, and the pecuniary value of the use of land, depend, we shall find that it is on the very same causes by which we found that wages and rent would be regulated if there were no money and no exchange of commodities. ”

“ As human services naturally tend to exchange at par for equally desirable human services, so do different forms of Wealth, each product of human service, tend to exchange at par for equally desirable forms of Wealth; and as Wealth in the Rent category and Wealth in the Wages category are alike service-products of Labor applied to Land, exchanges of every kind of Wealth tend to be effected on the basis of equality in the expenditure of Labor for their Production. ”

“ When two things, though made by equal labour, are of unequal value because the one is called upon to yield profit for a greater number of years or months than the other; this difference of value will be greater when profits are greater, and less when they are less. The wine which has to yield five years' profit more than the cloth, will surpass it in value much more if profits are 40 per cent, than if they are only 20. The commodities A and C, which, though made by equal quantities of labour, were sold for 1200l. ”

“ We have investigated the laws which determine the value of two classes of commodities: the small class which, being limited to a definite quantity, have their value entirely determined by demand and supply, save that their cost of production (if they have any) constitutes a minimum below which they cannot permanently fall; and the large class, which can be multiplied ad libitum by labour and capital, and of which the cost of production fixes the maximum as well as the minimum at which they can permanently exchange. ”

“ VI. Commerce has for its necessary conditions the liberty of contractors [141] and the equivalence of products exchanged; now, value having for its expression the sum of the time and of the expense which each product costs, and liberty being inviolable, the laborers necessarily remain equal in wages, as they are in duties and in rights.
“VII. Products are purchased only by products; now, the condition of every exchange being the equivalence of products, profits from exchange are impossible and unjust. ”

“ If all commodities were produced directly by the expenditure of labour, and in such a way that capital need not be considered, as in the simple natural state of society taken by Ricardo, then the only element to consider in value would be the quantity of labour. And in a society of a more developed character, in which wages are Elements of expenses production. ”

“ If a hammer will exchange for a chisel in the processes of Trade, they are of equal value—not price, but value. If the Money price of one is two dollars and that of the other is also two25 dollars, they are of equal price as well as equal value. And except as Money may vary in purchasing power through lack of stabilization, or commodities may vary in relative desirability or industrial cost, the price level and the value level tend to rise and fall together. ”

“ He who produces from and upon better grades will naturally achieve greater or better results with the same expenditure of Labor than he who produces from poorer grades. This difference is measureable by variations in the productive grades of Land, from nothing in excess of production cost on the lower side of the Margin of Production—the poorest in demand, the Economic frontier—to something in excess of production cost on the higher side of the Margin, the hither side of the Economic frontier, and to more and more for higher and higher grades up to the best. ”

“ The laws which elsewhere govern the distribution of the proceeds of labor, must apply in your case with equal force. Looking at them, we see that, with the growth of population and of wealth, there is everywhere a tendency to diminution in the proportion of the product that is allowed to the men who stand between the producer and the consumer. In new settlements, trade is small and the shopkeeper requires large profits to enable him to live; and, while the consumer pays a high price, the producer is compelled to be content with a low one. ”

“ For example, it has been greatly the custom of English political economists to discuss the laws of the distribution of the produce of industry, on a supposition which is scarcely realized anywhere out of England and Scotland, namely, that the produce is "shared among three classes, altogether distinct from one another, laborers, capitalists, and landlords; and that all these are free agents, permitted in law and in fact to set upon their labor, their capital, and their land, whatever price they are able to get for it. ”

“ If a million tons of grain are lying ready for distribution among the citizens, each ton, assuming it is of equal quality, will have to be held equal in value to any other. In consumption the several tons will not afford equal degrees of utility, but equal utility will be imputed to them as their value. I admit that, when goods are not sold to citizens, but distributed among them, equal prices will not come to be paid for equal items, nevertheless equality in judgments on value would manifest itself in many other directions, chiefly in the calculus of production. ”

“ From the unequal proportion in which, in different employments, profits enter into the advances of the capitalist, and therefore into the returns required by him, two consequences follow in regard to value. One is, that commodities do not exchange in the ratio simply of the quantities of labour required to produce them; not even if we allow for the unequal rates at which different kinds of labour are permanently remunerated. ”

“ Whatever things a man makes with his own hands, out of such materials as his proportionate share of land yields, must be allowed to be his own; and these may be accumulated, if they are not consumed by the maker of them; or they may be exchanged for other things, made by and belonging to other people, of an equal value; to be strictly estimated by the quantity of the labour employed in making the things exchanged. ”

“ That money, therefore, which constantly preserves an equal value, which poises itself, as it were, in a just equilibrium between the fluctuating proportion of the value of things, is the only permanent and equal scale, by which value can be measured. ”

“ It is evident, in the first place, that the law of Wages is not affected by the existence or non-existence of Exchange or Money. Wages depend on the ratio between population and capital; and would do so if all the capital in the world were the property of one association, or if the capitalists among whom it is shared maintained each an establishment for the production of every article consumed in the community, exchange of commodities having no existence. ”

“ In distributing the profits of industry we have adopted a law of equitable proportion, so that when the facts are presented, we have initiated the measure of attaining to practical justice, or in the formula of Fourier, 'equitable distribution of profits.' We claim also that we guarantee the sale of the products of industry; that is, we secure the means of converting any and every form of product or fruit of labor at the cost thereof, into any other form also at cost. For all our labor is paid for in a domestic currency. ”

“ He starts with the proposition—"That the essential element of beneficent commerce is Equity, or that which is just and equal between man and man." He then proceeds:—"The fundamental inquiry, therefore, upon the answer to which alone a science of commerce can be erected, is the true measure of equity, or, what is the same thing, the measure of price in the exchange of labour and commodities. ”

“ If the quantity of labour realized in commodities, regulate their exchangeable value, every increase of the quantity of labour must augment the value of that commodity on which it is exercised, as every diminution must lower it. ”

“ If we had then an invariable standard, by which we could measure the variation in other commodities, we should find that the utmost limit to which they could permanently rise, was proportioned to the additional quantity of labour required for their production; and that unless more labour were required for their production, they could not rise in any degree whatever. ”

“ THE COMPARISON OF VALUES IS EFFECTED WITH OUT A POINT OF COMPARISON BETWEEN THEM, AND WITHOUT A UNIT OF MEASURE,—such is the proposition which the economists of the nineteenth century, rather than accept the revolutionary idea of equality, have resolved to maintain against all comers. ”

“ But if, at the same time, the efficiency of labor has been doubled by improvements [Pg 100] in production, B can produce with the same labor twice as many commodities as before; and he returns to A the product of the same quantity of labor as he received. The classic economists and the socialists (at least some schools of socialists) have maintained alike that the ideally perfect standard of justice in the exchange of commodities and services is equality of sacrifice or labor ”

“ In the former respect, there is a beneficent principle of equalization or compensation which decreases the price-variations of money, no matter of what kind, in the necessity, when the number of business transactions remains the same and money becomes cheaper, to use more of it, and less when it becomes dearer.741 The supply of money is, in the long run, dependent chiefly on the cost of production. ”

“ I consider an article is increased in value by passing through several processes of manufacture; but, in exchange, do two equal values cease to be equal because the one comes from the plough and the other from the power-loom? ”

“ The primary object of this order shall be to organize exchange on the largest scale that may be practicable, with a view to the establishment of equitable relations between producers and consumers, by eliminating as rapidly as possible, every element of cost that does not go to the producers of the wealth exchanged, less an equitable compensation to the labor, physical and mental, that is necessary to an economical management of the business. ”

“ It is impossible, perhaps, to formulate this point, as wages are habitually estimated in quantity and interest in a ratio; but if we suppose a given quantity of wealth to be the produce of a given amount of labor, cooperating for a stated time with a certain amount of capital, the proportion in which the produce would be divided between the labor and the capital would afford a comparison. ”

“ The greater the difference, in the one trader's judgment, between the marginal utilities of the two goods, the greater is the maladjustment, and the greater, therefore, is the motive to seek readjustment by means of exchange. As the quantity of the good parted with declines, its marginal utility increases; and as more of the other good is acquired, its marginal utility declines. The marginal utility of the two exchangeable units must come to equilibrium in the individual's judgment. ”