its value is farther increased, perhaps ten fold. If manufactured into knives, the value may have been increased to an amount more than one hundred times greater than it possessed in the state in which the cutler received it. A pound of silver is worth more than a pound of iron, because more labor is required to get silver than to get iron. So also the value of land is augmented by the labor of clearing it of the forest, and preparing it for cultivation.

§ 753. The exchangeable value or price of a thing, therefore, is generally as the toil and labor of acquiring it. It is not the less bought with labor when paid for in money or other goods; for labor was the first price of the money or goods with which the article was procured. Whether a man labor a day to procure a bushel of wheat, or pay for it a dollar in money for which he had previously given a day's labor, the cost of the wheat is to him the same in either case. And if one man acquire any thing for one, two or ten day's labor, he will exchange it for another thing which he wants that has cost the same quantity of labor.

§ 754. The exchangeable value of an object is, however, liable to sudden and temporary variations; that is, the current price of a commodity may, by extraordinary cir cumstances, be made to vary from the cost or natural price. Should double the usual quantity of wheat be sent to any market for the use of the inhabitants, the supply being greater than the want or demand, the owners might be obliged to sell the article below the cost, or suffer a still greater loss by not selling it at all. If, on the other hand, a scarcity should by some means be produced in the market, the current price, or exchangeable value, of a commodity would be raised above the cost, because the demand would be greater than the supply. But the causes of these fluctuations are usually of short continuance, as the exchangeable value of things ever tends to a proper level.

§ 755. A product is that which is formed or brought forth

an example, how labor increases the value of things. § 753. By what is the value of a thing generally determined? § 754. Is this rule invariable? What is the difference between the current and the natural prices of things? How is this variation caused? § 755. What is a produet ?

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by nature, or by human labor; and the act or process of making or furnishing such object, is called production: consequently, the creation of any valuable product, or the investing of any matter or substance with utility, is properly termed the production of wealth.

CHAPTER III.

The Different Kinds of Industry, and their Concurrence in Production.

§ 756. As the grand agent in the production of wealth is labor or industry, and as wealth is increased in proportion to the increase of value produced by industry; it is the province of political economy to show how industry may be most successfully employed in the creation of value. Without industry, few of the wants of mankind would be supplied. The earth in a state of nature would not only furnish to man a scanty subsistence, but it could furnish such subsistence to a very limited population.

§ 757. There are three kinds of industry by which value is created: agricultural, manufacturing, and commercial industry; and the concurrence of these is necessary in production. Industry, in the production of wealth, does not, however, create matter; it merely changes the form of it. It may properly be said to be the human employment of natural agents in creating value, by changing the form and place of existing substances.

§758. The husbandman," says Say," who sows a grain of wheat that yields twenty fold, does not gain this product from nothing he avails himself of a powerful agent; that is to say, of Nature, and merely directs an operation, where by different substances previously scattered throughout the

:

§756. By what are the wants of mankind principally supplied? §757. What three kinds of industry concur in producing wealth? Does industry create matter? § 758. Explain the process of chang

elements of earth, air, and water, are converted into the form of grains of wheat."

§ 759. The manufacturer changes the form of timber, iron, and wool, into chairs and tables, scythes and axes, and various articles of clothing. Thus, in both these branches of industry, value is created by changing the form of matter. Nearly the whole value of a product sometimes consists of the addition of value given to matter by industry. Thus, the value of the material of which a yard of lace is made, is too small to be computed, nearly the whole value of the product consisting in the labor of making it. A still greater addition of value is given to a lump of iron ore wrought into the hair springs of watches. It is estimated that a pound of iron will furnish the material for 80,000 springs; which, at 12 cents a piece, would amount to $10,000.

§ 760. Commercial industry likewise concurs in production, by increasing the value of a product by transporting it from one place to another. A ton of iron is more valuable in New York than in the foreign port whence it was imported; and a quintal of codfish possesses greater value in Buffalo than in Albany, the value having been increased by transportation. Here value is created by changing the place of an object.

§ 761. Thus it may be seen how these several kinds of industry concur in production. And it is not the product of either one of them, but the united products of agricul ture, manufactures, and commerce, that compose the annual produce of a nation. We see too the mutual dependence of these different classes of producers upon each other, and the error of those who consider one of them more honorable or more useful than the other. And it is equally evident that if any one of them either prospers or suffers, the others must of necessity prosper and suffer with it.

§ 762. Though these three kinds of industry contribute to the wealth of society in so many different ways, there

ing the form of grain? § 759. Illustrate, by examples, the increase of value of a substance, in changing its form by labor bestowed upon it. § 760. How does commercial industry concur in production? § 761. What are the nature and effect of the concurrence of these several branches of industry in production? § 762. What three dis

are three distinct operations which are the same in each and all of these several branches of industry. That is to say, industry, whether agricultural, manufacturing, or commercial, may be divided into (1.) theory; (2.) application; and (3.) execution. All of these three operations are necessary to the formation of any product, as we shall presently see.

§ 763. In the production of a watch, for example, the first step is the study of the nature and properties of iron; by which investigation it has been discovered that this metal can be drawn out to almost any degree of attenuation, and that it is capable of receiving a great degree of elasticity. The second step is the applying of the laws and properties of iron to the purpose of moving a watch by means of main and hair springs. The last operation is the execution of the manual labor necessary to complete the product.

§764. The same operations may be traced in agricultural and commercial industry. The natural philosopher or man of science has in the first place discovered the order and conduct of nature in the production of grain, the chemical qualities of the various substances by which the soil may be fertilized. The farmer, having acquired a knowledge of these discoveries, proceeds to apply this knowledge to the purpose of creating a useful product, and directs the mode of manuring the soil and the time and manner of preparing the soil in order to effect the production of the desired object. In the last place, the laborer ploughs the ground, and sows the seed.

§ 765. These operations are not always, however, performed by different persons; sometimes the same person performs two; but it seldom happens that he performs all of them. Franklin discovered the laws of electricity, and applied them to the construction of the lightning rod; thus performing the labor of discoverer and of inventor; but he probably never made a rod with his own hands. In most of

tinct operations are performed in the formation of a product? § 763. Illustrate this in the case of a mechanical product. § 764. In the case of an agricultural production. § 765. Are these several operations always performed by different persons? Why is not the first of

the products of the present day, no person performs more than two of these operations; because new discoveries are seldom made. Most of the new inventions which are taking place, are the result of the knowledge of the laws of nature long since discovered. The nature of iron and of heat, and the effect of the latter upon the former, were discovered at an early period; but the application of the knowledge of this effect to the construction of cast iron ploughs, is of recent invention. And almost all the labor done is exerted in the creation of products which are the result of old discoveries and inventions.

§ 766. We see, then, that in each branch of industry there are three classes of laborers. First, discoverers, including philosophers and men of science, who investigate and discover the laws of nature; secondly, inventors of machinery, and all who teach us how to apply the knowledge of these laws to some practical purpose; among whom may be classed also the lawyer, physician, and clergyman, by whose knowledge society is in various ways made more prosperous and happy; and thirdly, all persons who labor in the several trades and manual employments.

§767. The labor of lawyers, physicians, and clergymen, is by some called unproductive labor; because it imparts no value to any substance; that is, it invests no matter with any utility or exchangeable value. The physician visits a patient, and prescribes a remedy for his disease, but no product is created which the sick person can transfer or dispose of to another, or keep for future use. Of a similar nature

is the labor of a lawyer and a clergyman.

§ 768. But laborers in these professions are no less productive laborers than farmers and mechanics. Laws are enacted to secure to persons their rights. But to avail himself of the benefit of the law, a man must have a knowl. edge of the law. And if he must at any time have recourse to the law to obtain justice, he may procure the advice and assistance of the lawyer, who has the necessary knowledge

these operations so common as the others? § 766. Who compose each of the three classes of laborers in the several branches of industry? 767. Why is the labor of lawyers, physicians, and clergymen called unproductive labor? § 768. Is not the labor of these men