(3.iii.12) The case would be precisely the same, if we supposed the 1000 l. of capital, whichis not employed in the payment of wages, to be employed in any proportion, in the shape ofcirculating capital consumed in the course of the productive process, and requiring to bereplaced. Thus, while 1000 l. were employed in the payment of wages, 500 l. might be employedas fixed capital in durable machinery, 500 l. in raw material and other expenses. If this were thestate of the expenditure, the value of the article would be 1700 l.; being the amount of thecapital to be replaced, and 10 per cent. profits upon the whole. Of these 1700 parts, 1000 wouldbe the share of the labourers, though paid in advance, and 700 the share of the capitalist, 200being profits. If, now, wages were to rise 5 per cent., 1050 of the above 1700 parts would be theshare of the labourers, and 650 only would remain to the capitalist, of which, after replacing his500 l. of circulating capital, 150 would remain as profits; a reduction of 2-1/2 per cent. as before.
(3.iii.13) If all commodities corresponded with the third case, as no wages would be paid,profits could not be affected by the rise of them : and it is obvious, that, in proportion as commoditiesmay be supposed to approach that extreme, profits would be less and less affected by such a rise.
(3.iii.14) If we suppose, what is most probable, that, in the actual state of things, as manycases are on the one side of the medium as on the other, the result would be, in consequence of themutual compensations that would take place, that profits would be reduced exactly half as muchas wages rose.
(3.iii.15) The steps may be traced as follows :
(3.iii.16) When wages rise, and profits fall, it is evident that all commodities, made with aless proportion of labour to capital, will fall in value, as compared with those which are made with agreater. Thus, if No. 1 is taken as the standard, that in which commodities are produced whollyby labour; all commodities belonging to that case will be said to remain of the same value; allbelonging to any of the other cases will be said to fall in value. If No. 2 is taken as the standard,all commodities appertaining to that case will be said to remain of the same value; all, belongingto any case nearer the first extreme, will be said to rise in value; all, to any nearer the lastextreme, to fall.
(3.iii.17) Those capitalists, who produce articles of case No. 1, sustain, when wages haverisen 5 per cent., an additional cost of 5 per cent.; but they exchange their commodity against othercommodities. If they exchange them against those of case No. 2, where the capitalists havesustained an additional cost of only 2-1/2 per cent., they will receive 2-1/2 per cent. additionalquantity. Thus, in obtaining goods, produced under the circumstances of case No. 2, they obtaina certain degree of compensation, and sustain, by the rise of wages, a disadvantage of only 2-1/2per cent. In this exchange, however, the result, with respect to the capitalists who produce goodsunder the circumstances of case No. 2, is reversed. They have already sustained a disadvantageof 2-1/2 per cent., in the production of their goods, and are made to sustain another disadvantageof 2-1/2 per cent. in obtaining, by exchange the goods produced under the circumstances of caseNo. 1.
(3.iii.18) The result, then, upon the whole, is, that all producers, who possess themselves,either by production or exchange, of goods produced under the circumstances of case No. 2, sustain adisadvantage of 2-1/2 per cent.; those who possess themselves of goods in cases approaching thefirst extreme, sustain a greater; those in cases approaching the last, a less disadvantage: that, ifthe cases on the one side are equal to those on the other, a loss of per cent. is sustained upon thewhole; that this, accordingly, is the extent to which, in practice, it may be supposed that profitsare reduced.
(3.iii.19) From these elements it is easy to compute the effect of a rise of wages upon price.
All commodities are compared with money, or the precious metals. If money be supposed tocorrespond with case No. 2, or to be produced, which is probably not far from the fact, by equalproportions of labour and capital; then all commodities, produced under these mediumcircumstances, are not altered in price by a rise of wages; those commodities which approachnearer the first extreme, or admit a greater proportion of labour than capital in their formation,rise in price: those which approach the second, that is, have a greater portion of capital thanlabour, fall: and, upon the aggregate of commodities or all taken together, there is neither fallnor rise.
(3.iii.20) From the explanations, here afforded, it will be easy to see what is meant by theterm "measure of value," and wherein it differs from that which we have already endeavoured toexplain, the "regulator of value."
(3.iii.21) Money, that is, the precious metals in coin, serves practically as a measure ofvalue, as is evident from what has immediately been said. A certain quantity of the precious metal is takenas a known value, and the value of other things is measured by that value; one commodity istwice, another thrice the value of such a portion of the metal, and so on.
(3.iii.22) It is evident, however, that this can remain an accurate measure of value, only if itremains of the same value itself. If a commodity, which was twice the value of an ounce ofsilver, becomes three times its value, we can only know what change has taken place in the valueof this commodity, if we know that our measure is unchanged.
(3.iii.23) But there is no commodity to be taken as a measure of value, which is not itselfliable to alterations in value, or in its power of purchasing, from a change in the quantity of labour andcapital required both for its own production, and that of other commodities, and also from achange in wages and profits.
