profits (interest), or labor and abstinence, but not labor and profits! 10. What Ricardo should have given us is a rectilinear theory of entrepreneur’s costs. For a theory of these costs is truly all he has offered. As for an ultimate answer to the riddle of value—an answer not contained in the simple empirical law of costs—Ricardo has not given us one. For, in answer to the query, _why_ labor cost, barring the qualifications he develops, should regulate value, he has said nothing. He has not even said what labor is; and in explaining the ultimate nature of economic value, and the relation of labor to it, it will not suffice to trust that every one knows exactly what is meant by labor. It should be understood, without remark, that the criticisms here passed are not in the least directed against his greatness as a thinker. His greatness is relative to his time. We criticize him with reference to the developed theory of our time; if we did not do this, this history would be a mere summary of Ricardo’s chapter on value, and would be almost, if not quite, pointless. To conclude, Ricardo makes four qualifications of the doctrine of the labor-cost regulation of value. (1) Labor must be expended on things of utility. Utility is an absolute condition of value. (2) Goods to be subject to this law of value must be reproducible. The unimportant class of scarcity goods has a value entirely independent of labor-cost. (3) Labor-cost really regulates only the natural or central value of goods. There must be perfect competition to keep the market value at the natural value. (4) Variety in the proportions of fixed and circulating employer’s capital causes an aberration of natural value from proportion to pure labor-cost. These points reappear explicitly or implicitly in all labor accounts of value. They are interesting in view of the estimates of Ricardo’s theory as being absolute. The second and fourth counts especially negative this estimate. The point of greatest interest in this connection is the question as to how much of a trunk remains of the Ricardian labor theory after so much bark has been stripped off. Ricardo considered the theory to remain for practical purposes intact. The fourth count is the only one that gives him serious concern, and though he is plainly much impressed with the force of the difficulty while he is treating of it, and concludes because of it that labor is not a precise regulator of value, when he has delivered himself of this statement he proceeds with the resolve to abstract from the whole difficulty, and reason as if the thesis first advanced were unqualified.