" The transaction relative to the diamond may be supposed to give rise to the following dialogue: —

"' Give me your diamond, sir.'

"' With all my heart. Give me, in exchange, your labor for an entire year.'

"' Your acquisition has not cost you a minute's work.'

"' Very well, sir: find an equally lucky minute.'

"' Yes ; but, in strict equity, the exchange ought to be one of equal labor.'

"' No: in strict equity, you put your value on your service, and I upon mine. I don't force you: why should you lay a constraint upon me? Give me a whole year's labor, or seek a diamond for yourself

"' But that might entail on me ten years' work, and would probably end in nothing. It would be wiser and more profitable to devote those ten years to another employment.'

"' It is precisely on that account I imagined I was rendering you a service in asking you only one year's work. I thus save you nine, and that is the reason why I attach great value to the service. If I appear to you exacting, it is only because you regard the labor which I have performed; but consider also the labor I save you, and you will find me reasonable in my demands.'

"' It is not less true that you profit by nature.'

"' And, if I were to give away what I have found, for little or nothing, it is you who would profit by it. Besides, if this diamond possesses great value, it is not because Nature has been elaborating it since the beginning of time. She does as much for a drop of dew.'

"' Yes; but, if diamonds were as common as dew-drops, you could no longer lay down the law to me, and make your conditions.'

"' Very true; and, in that case, you would not address yourself to me, or would you be disposed to recompense me highly for a service you could perform yourself.'

The result of this dialogue, M. Bastiat regards as proving that value no more resides in the diamond than in air or water.

" It resides exclusively in the services which we suppose to be rendered and received with reference to these things, and is determined by the free bargaining of the parties who make the exchange. The pretended value of commodities is only the value of services, real or imaginary, received and rendered in connection with them. Value does not reside in the commodities themselves, and is no more to be found in a loaf of bread than in a diamond, the water, or the air. No part of the remuneration goes to Nature. It proceeds from the final consumer of the article, and is distributed exclusively among men."

Again: —

" In order that a service should possess value in the economical sense of the word, it is not at all indispensable that it should be real, conscientious, and useful service. It is sufficient that it is accepted, and paid for by another service. It depends wholly on the judgment we form in each case; and this is the reason why morals will always be the best auxiliary of political economy. Economic science, would be impossible if we admitted as values only values correctly and judiciously appreciated."

Value does not always exist in a visible form. The wealth of a nation is generally supposed to consist in the aggregate of its material objects having value,—in its lands, buildings, ships, merchandise, treasure, canals, railroads, &c.; but its potential wealth, or power of creating wealth, includes not only all these named, but the intelligence, skill, industry, and productive energy of its citizens. No inventory of a nation's effects will give an adequate idea of its economic condition, unless we hold in view its capacity of development, and the industrial genius of the people.

The main principle in the theory of value is expressed in the common phrase, " A thing is worth what it will fetch," — that is, what some one will give for it; the value depending on the will of the purchaser, as determined by his judgment.

Value is the appreciation of services.

The value of a thing is the service or labor which it will command in exchange.

If there is no resistance to the possession of an article, it can have no value. Labor alone does not always create value; but value never exists in an article, unless some one is willing to give labor, in some form or other, in exchange for it.

The ancients thus described the combinations of exchange:

Do ut des,          Commodity for commodity.

Do ut facias, Commodity for service. Facto ut des, Service for commodity. Facio ut facias, Service for service.

This statement exhausts all the modifications of the principle.