Torrens,for example,says that the 'real wages of labour have a constant tendency to settle down'to the amount rendered necessary by 'custom and climate'in order to keep up his numbers.74Mill observes in his terse way that the capitalist in the present state of society 'is as much the owner of the labour'as the manufacturer who operates with slaves.
The only 'difference is in the mode of purchasing.'75One buys a man's whole labour;the other his labour for a day.The rate of wages can therefore be raised,like the price of slaves,only by limiting the supply.Hence the 'grand practical problem is to find the means of limiting the number of births.'76M'Culloch is equally clear,and infers that every scheme 'not bottomed on'the principle of proportioning labour to capital must be 'completely nugatory and ineffectual,'77The doctrine common to the whole school led M'Culloch to conclusions which became afterwards notorious enough to require a word of notice.Torrens,like Ricardo,speaks of capital as 'accumulated labour,'but makes a great point of observing that,although this is true,the case is radically changed in a developed state of society.
The value of things no longer depends upon the labour,but upon the amount of capital employed in their production.78This,indeed,may seem to be the most natural way of stating the accepted principle.M'Culloch replies that the change makes no difference in the principle,79inasmuch as capital being 'accumulated labour,'value is still proportioned to labour,though in a transubstantiated shape.M'Culloch supposed that by carrying out this principle systematically he was simplifying Ricardo and bringing the whole science into unity.All questions,whether of value in exchange,or of the rate of wages,can then be reduced to comparing the ****** unit called labour.Both Mill and M'Culloch regard capital as a kind of labour,so that things may be produced by capital alone,'without the co-operation of any immediate labour'80--a result which can hardly be realised with the discovery of a perpetual motion.So,again,the value of a joint product is the 'sum'of these two values.81All value,therefore,can be regarded as proportioned to labour in one of its two states.M'Culloch advanced to an unfortunate conclusion,which excited some ridicule.Though Ricardo and Torrens 82rejected it,it was accepted by Mill in his second edition.83Wine kept in a cask might increase in value.Could that value be ascribed to 'additional labour actually laid out'?M'Culloch gallantly asserted that it could,though 'labour'certainly has to be interpreted in a non-natural sense.84Not only is capital labour,but fermentation is labour,or how can we say that all value is proportioned to labour?This is only worth notice as a pathetic illustration of the misfortunes of a theorist ridden by a dogma of his own creation.Another conclusion is more important.The 'real value'of anything is measured by the labour required to produce it.Nothing 'again is more obvious'than that equal labour implies the 'same sacrifice'in all states of society.85It might seem to follow that the value of anything was measured by the labour which it would command.This doctrine,however,though maintained by Malthus,was,according to M'Culloch,a pestilent heresy,first exploded by Ricardo's sagacity.86Things exchange,as he explains,in proportion to the labour which produces them,but the share given to the labourer may vary widely.The labourer,he says,'gives a constant,but receives a variable quantity in its stead.'He makes the same sacrifice when he works for a day,but may get for it what he produces in ten hours,or only in one.In every case,however,he gets less than he produces,for the excess 'constitutes profits.'87The capitalist must get his interest,that is,the wages of the accumulated labour.Here we come again to the Socialist position,only that the Socialist infers that the labourer is always cheated by the capitalist,and does not consider that the machine can ask for 'wages'on the pretext that it is accumulated labour.What,however,determines the share actually received?After all,as a machine is not actually a labourer,and its work not a separable product,we cannot easily see how much wages it is entitled to receive.M'Culloch follows the accepted argument.'No proposition,'he says,'can be better established than that the market rate of wages.is exclusively determined by the proportion between capital and population.'88We have ultimately here,as elsewhere,'the grand principle to which we must always come at last,'namely,'the cost of production.'89Wages must correspond to the cost of raising the labourer.This leads to a formula,which afterwards became famous.In a pamphlet 90devoted to the question,he repeats the statement that wages depend upon the proportion between population and capital;and then,as if the phrase were identical,substitutes that portion of capital which is required for the labourer's consumption.This is generally cited as the first statement of the 'wage-fund'theory,to which I shall have to return.