fume and fret, but she must keep her temper and possess her soul in patience. There is no remedy but time and patience. When protectionist policy once gets the upper hand the natural tendency of its advocates is to strain it till it cracks. When protectionists do not reap the benefits they expect from protection, their constant cry is for more protection. We see this in Russia, Germany, France, Italy, and most conspicuously in the United States. In this last-named country there are evident signs that the people see that they have bent the bow too far, and the present Government is strenuously bent on relaxing it to a considerable extent; but how far it will succeed time only can show. But, whatever other nations may do, England must endure to the end and steadily keep the light of free trade burning amid despondency, gloom and darkness, in the hope that time, experience and reflection will bring other nations to a better frame of mind. One example

alone is sufficient to prove the wisdom of this policy. Even in former times, when all nations were protectionist, there were always a certain number of free cities, and their wealth and prosperity, while all nations were weighed down with protection, completely establish the truth of Cobden's doctrine. If so be, England must continue to the end as the free port and market of the world.

Thus we see how true Economics throws a clear and steady light on the path of national policy.

We have now to consider the influence of economic speculation, true or false, on that new form of protection which, under the name of socialism, has in these last few years become so increasingly prevalent, and which is assuming more alarming and portentous influence every day.

Adam Smith, as we have shown even in this brief and cursory sketch, did immense services to Economics; but, alas! he also did infinite mischief by his self-contradictions and confusion on the nature and causes of value.

Aristotle said—' Value is the relation which anything bears to other things.'

The Economists were perfectly clear and consistent in their

doctrine of value. Le Trosne says 'Products acquire, then, in the social state which arises from the community of men among each other, a new quality. This new quality is value, which makes products become wealth.

'Value consists in the ratio of exchange which takes place between such and such a product, between such a quantity of one product and such a quantity of another product.' And in this the Economists were unanimous. Now, it is evident that if value is a ratio, there can be no such thing as intrinsic value; and also that a standard of value is impossible by the very nature of things. Value, like distance, necessarily requires two objects or quantities.

Aristotle also showed that the cause of all value is demand —χρεία. The word χρῆμα, which is one of the most usual words in Greek for wealth, comes from xpάoμai, to want or demand and the ancients showed a thing is xpñua-wealth -only where and when it is xpηo μov―wanted and demanded : and that where and when it is not xpnoμov-wanted and demanded—it is not xonμa-wealth. In the ancient dialogue we have referred to above, Socrates shows that money is wealth only in those places where it will purchase other things, and he instanced several examples of local moneys which were valuable and were wealth in certain places, but which had no value and were not wealth in others, where they had no power of purchasing. All the Economists of France and Italy showed that value proceeds entirely from the wants and desires of men. The Economists were quite unanimous that all value proceeds from consommation, or demand; and that where things are not consommésdemanded they are no better than so much rubbish. Now, as all commerce or exchange proceeds from the mutual wants and desires of men, it is quite evident that value requires the concurrence of two minds, and that it proceeds from reciprocal demand.

Our great philosopher Locke was, unfortunately, the originator of all the confusion which has done so much to blight the progress of English Economics. Locke maintained that all differences of value arise from differences of labour. Locke's

abstruse works are very little known, and if this fatal dogma had lain perdu in them there would have been very little harm done.

But, unfortunately, this idea was taken up in the early part of his work by Adam Smith, though quite discarded in the latter part of it, and his fifth chapter has been the ruin of English Economics.

Of this chapter that distinguished Economist and statesman Francis Horner says 'We have been under the necessity of suspending our progress in the perusal of the Wealth of Nations on account of the insurmountable difficulties, obscurity and embarrassment in which the reasonings of the fifth chapter are involved. . . . the discovery that I did not understand Smith speedily led me to doubt whether Smith understood himself.'

We shall now lay before our readers the cause of all this confusion.

In this unfortunate chapter Smith begins by saying that the value of any commodity is equal to the quantity of labour which it entitles him to purchase. Hence if we denote labour by l, we have

A = 1, 2 1,3 1,4 l ...

He then says that this is the same thing as saying that it is equal to the produce of labour which it enables him to purchase. On denoting produce by p, we have

Then he says that the value of anything is more frequently estimated in money than either in labour or commodities. On denoting money by m, we have

A = m, 2 m, 3 m, 4m...

Now, although it has been pointed out that these modes of estimating the value of a quantity are by no means identical, we observe that in this passage Smith defines the value of a thing to be something external to itself. Hence the value of A must vary directly as l, p or m. The more of l, por m that A can purchase, the greater is the value of A: the less

of l, p or m that A can purchase, the less is the value of A. It is also perfectly clear that if any change takes place in the relation between A and these quantities, the value of A has changed.

Hence Smith admits that value, like distance, requires two objects. If any change takes place in the position of these two objects, the distance between them has changed, no matter in which the change has taken place. So if any change takes place in the relation of two quantities, their value has changed, no matter in which the change takes place. Hence it is clear that there can be no such thing as invariable value. Nothing whatever can have invariable value unless its exchangeable relation with everything else is fixed. Hence we can at once see that, by the very nature of things, there can be no such thing as an invariable standard of value by which to measure the value of other things, because by the very nature of things, the very condition of anything being invariable in value is that nothing else shall vary in value, and that there shall be no variations to measure.

Nevertheless a very large body of Economists have set out upon this wild-goose chase, this search for an invariable standard of value, which it is utterly contrary to the nature of things should exist at all. Directly after the passage we have referred to, Smith commences the search for that single thing which is the invariable standard of value. He says that gold and silver will not do because they vary in their value; sometimes they can purchase more and sometimes less of labour and commodities. Then he says

'But as a measure of quantity, such as the natural foot, fathom or handful, which is always varying its own quantity, can never be an accurate measure of the quantity of other things, so a commodity which is itself continually varying in its own value can never be an accurate measure of the value of other commodities. Equal quantities of labour at all times and places may be said to be of equal value to the labourer. In his ordinary state of health, strength and spirits, in the ordinary degree of his skill and dexterity he must always lay down the same portion of his ease, his

liberty, and his happiness. The price which he pays must always be the same whatever the quantity of goods which he receives in return for it. Of these, indeed, it may sometimes purchase a greater, and sometimes a smaller quantity, but it is their value which varies, not that of the labour which purchases them. At all times and places that is dear which it is difficult to come at, or which it costs much labour to acquire, and that cheap which is to be had easily, or with very little labour. Labour alone, therefore, never varying in its own value, is alone the ultimate and real standard by which the value of all commodities can at all times and places be estimated and compared. It is their real price; money is their nominal price only.

But though equal quantities of labour are always of equal value to the labourer, yet to the person who employs him they appear sometimes to be greater and sometimes of smaller value.

...

'Labour, therefore, it appears evidently is the only universal, as well as the only accurate measure of value, or the only standard by which we can compare the value of different commodities at all times and places.'

The utter confusion of ideas in these passages is manifest. A foot, or a fathom, is an absolute quantity, and of course may increase or decrease by itself: but value, by Smith's own definition, is a ratio, which requires two quantities: and therefore we might just as well say that because a foot which is constantly varying its own length cannot be an accurate measure of the length of other things, therefore a quantity which is always varying its own ratio cannot be an accurate measure of the ratio of other things. This is utter confusion of idea. We may measure a tree with a yard, because they are each of them single quantities; but it is impossible that a single quantity can be the measure of a ratio. It is manifestly impossible to say that

a : b :: X.

It is manifestly absurd to say that 4 is to 5 as 8, without saying as 8 is to-what? just as it is absurd to say that a horse