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proposition, that commodities exchange with each other according to the quantity of manual labour worked up in them .... Mr. Ricardo, indeed, admits of considerable exceptions to his rule.... Yet notwithstanding these admissions, he proceeds with his rule as if there had been few or no exceptions to it. (3) But by 'labour' Ricardo did not mean only that labour which has been immediately occupied upon the manufacture of a particular article. The term covers all the labour that has indirectly as well as directly contributed to the product, including all that has been devoted to the creation of the capital with which the process may have been assisted.

The clearest exposition of this view is to be found in James Mill, who sums it up in the two propositions that 'Capital is hoarded labour.,' and that 'Profits are simply remuneration for labour.' His illustration from machinery is especially significant, as showing the way in which the doctrines of the Ricardian school suggested the later Socialist formulation:

Marx says exactly the same; though his application is different.