What, then, is value? When does an article or commodity possess value?

When it is an object of man's desire, and can be obtained only by man's efforts. Any thing upon which these two conditions unite will have value ; that is, a power in exchange. Value is the exchange power which one commodity or service has in relation to another.

That such a power does exist, is not a matter of dispute. Its influence is felt and acknowledged in every country, civilized or savage. This it is which excites to industry, creates commerce, and supports government. This power obeys laws as certain and immutable as those which appertain to any of the great forces of nature. Just as man is sure to feel wants, to put forth efforts, to realize satisfactions ; so he is sure to be found exchanging an excess for a novelty, a home product for that which comes from abroad, the work of his mind for the work of another's body.

Again let us remark, that the term "value" always expresses precisely power in exchange, and no other power or fact. Desirableness is not value. Utility is not value. No objects are more useful and desirable than atmospheric air, the light of day, the heat of the sun ; yet these have no value. They will exchange for nothing, because any one may have all he wishes without effort.

An object, to possess value, must be desired by some one who is willing to render a service or equivalent in order to obtain it, for the reason that he cannot have it without. It is what a man gets, what another will give, that determines value. The use of this term, in its strictest sense, is of the utmost importance. If confounded with any thing, or taken into any partnership, the whole science is thrown into confusion.

It has been common for writers to speak of exchangeable value, intrinsic value, value in use, $c.; but all these terms are inappropriate. The adjectives are superfluous: they have no significance whatever. To speak of exchangeable value is to speak of exchangeable exchangeability. The term "value," in the science of values, always implies power in exchange, and nothing else.

Of all the writers on the subject, no one seems to have been more full and clear in the definition and illustration of value than M. Bastiat, in his "Harmonies of Political Economy: " —

"Theorists have set out, in the first instance, by confounding value with utility. This was their first error; and, when they perceived the consequences of it, they thought to obviate the difficulty by imagining a difference between value in use and value in exchange, — an unwieldy tautology, which had the fault of attaching the same word 'value' to two opposite phenomena" (p. 161).

" The theory of value," he further says, " is to political economy what numeration is to arithmetic. Value is the relation of two services. The idea of value entered into the world for the first time when a man said to his brother, ' Do this for me, and I will do this for you;' they had come to an agreement: then, for the first time, we could say the two services exchanged,—were worth each other."

The case of the blind man and the paralytic is given in illustration. The blind man says, " I have limbs: you have eyes. I will carry you: you shall be my guide." Each receives a benefit; their services are exchanged,—valued by each other. Here we have value appearing, not in material wealth, but in services ; yet the principle is just the same as when the hatter says to the bootmaker, " I will give you a hat for a pair of boots," and they change accordingly. They really exchange their mutual services, which have been put into the form of material objects. Another illustration is given: —

" I wish for water to quench my thirst; I go two miles to the spring, and get it. My neighbor goes on the same errand. I say to him, ' Bring me water, and I will do something in the mean time for you; I will teach your child to spell.' Here is the exchange of two services: one is worth the other. Presently, I say to my neighbor, ' Instead of teaching your child while you are gone for the water, I will pay you twopence each time.' If the proposal is accepted, we say the service is worth twopence. If others in the neighborhood employ the same man to bring water, he becomes a water-merchant; and the value of water is as fully recognized as the value of wheat. The water, at first valueless, is now an article of wealth. It has not changed its chemical qualities, but services have become materialized, or incorporated with it. If the well, in the case supposed, were brought nearer to the village, the value of the water would be reduced, because less labor or service would be required to obtain it."

Suppose an aqueduct built by the joint labor of the community. The business of the human water-carrier has ceased; but not the less is the value of the water, delivered at the door, the product of labor. The labor has been invested with a permanent form, as pipes, walls of masonry, gates, &c. Labor has been accumulated for the purpose, instead of using the hourly labor of the water-carrier. The industry of the bricklayer and the plumber carries water years after they ceased to work on the aqueduct.

We have said that it was not the properties of the water that gave value; no more does the value reside in the mere delivery of the same. The water-works of some regions furnish them water on the ground, at the rate of a million and a half square feet a day to each square league. Yet the water has no value there ; for the agencies employed are not the labor of man, but the currents of air, — Nature's pipes and conduits.

The diamond, as M. Bastiat observes, makes a great figure in works on political economy. It is adduced as an illustration of the laws of value or of the supposed disturbance of those laws; and, as he gives a more full and satisfactory explanation of the cause of value in a diamond than any other writer, we shall quote his words: —

" I take a walk along the sea-beach, and I find by chance a magnificent diamond. I am thus put in possession of great value. Why? Am I about to confer a great benefit on the human race? Have I devoted myself to a long and laborious work? Neither the one or the other. But, undoubtedly, because the person to whom I transfer it considers that I have rendered him a great service, — all the greater that many rich men desire it, and I alone can render it. The grounds of his judgment may be controverted. Be it so. It may be founded in pride or vanity. Granted again. But this judgment has nevertheless been formed by a man who is disposed to act upon it, and that is sufficient for my argument. Far from the judgment being based on a reasonable appreciation of utility, we may allow that the very reverse is the case. Ostentation makes great sacrifices for what is utterly useless. In this case, the value, far from bearing a necessary proportion to the labor performed by the person who renders the service, may be said rather to bear proportion to the labor saved to the person who receives it. This general law, which has not, so far as I know, been observed by theoretical writers, nevertheless prevails universally in practice.