“the case of the wine in the cellar coincides exactly with that of a machine worn out in a year, which works by itself without additional labour. The new wine, which is one machine is replaced by its produce, the old wine, with that addition of value which corresponds with the return to capital employed upon the land [in Mill’s view, the capital that sets the rate of interest for all other]; and the account which is to be rendered of the one return, is also the true account of the other.”[100] Although Mr. Mill has taken trouble to show that it is a misapprehension to suppose that difference in the time required to produce commodities throws their values out of proportion to their labor costs, he now caps the climax of his strange argument by explaining, directly after Ricardo, how a rise or fall in the general rate of wages will alter the exchange ratios of commodities, irrespective of changes in their labor costs. As explained in the chapter on Ricardo, this is but an indirect way of showing that the existence of interest is fatal to the law of labor cost, and that the length of time through which interest must be taken is a material factor in determining the cost of production of commodities. The failure of Mr. Mill, as a disciple of Ricardo, to understand the real meaning of the master’s qualification of the labor-cost law, serves but to prove the assertion already made, that Ricardo’s round-about argument on this subject was most misleading. As for Mr. Mill, his treatment of the interest difficulty was a bungle from first to last. 3. TORRENS. 5. Torrens explains at great length why commodities cannot be exchanged in primitive society on any other basis than that of labor cost; but concludes that the forces which produce this result in early times cause products to exchange, under advanced conditions, according to their capital cost. A commodity’s cost in capital, measured as the money outlay of the capitalist-employer, is its “natural price.” Actual exchange value does not, as Ricardo and Malthus say, tend to settle at _natural price_, because there is a permanent difference between these quantities, and this difference constitutes “profits.”[101] It is true that writers who claim that the actual price tends to come to the “natural price” include profits in natural price, “But this classification is highly unphilosophical and incorrect.”[102] “We cannot assert that the profit of stock is included in the cost of production, without affirming the gross absurdity that the excess of value above the expenditure, constitutes a part of expenditure.”[103] The difference of view between Malthus and Torrens is easily explained. Malthus means by natural price, normal value. Torrens has in mind one variety of the “natural price” of the “philosophical” account of value.