Cost and value may, in certain cases, tend to make mutual adjustments, but these are effected only by means of changes in supply. Value is not determined by cost _per se_, or, that is to say, cost is by no means of its essence. In the ordinary case, if one capital is employed for a longer time than another, the outwardly active process of production is continued for a longer time. If extra profit accrues through a time when labor works and wheels turn, it is easy to say that profits must be paid, and therefore the value of the product must be of such and such an extent. But in an instance where the value increases without the whirl of wheels and the manipulation of tools, the phenomenon naturally presents itself to the mind in an unfamiliar aspect. The wine merchant remains passive, and it seems plain that instead of his expense dictating what the value of the wine shall be, the truth is, he takes what the causes independently determining the value of the wine give him. Beyond a doubt there is a relation of cost to value, but there are instances where the ultimate philosophy that cost is the very essence of value applies with such unsatisfactory results that any but the most doctrinaire classical economist must falter and hasten on. 4. If “profits” are a part of entrepreneur’s cost of production, the question which confronted Ricardo must reappear. Does not the variety of the proportions in which fixed and circulating capital are combined in production, free values from the regulation of labor cost? The consideration of this question in Mill’s _Principles_ is accompanied by unpardonable blunders in terminology. Mill’s mind seems here completely tradition-ridden. The havoc is wrought in the use of terms by adopting the view that besides labor cost influencing value, wages also influence it. In the topical analysis (Table of Contents, vol. i, p. 15) the outline of the chapter on cost of production proceeds as follows: “Principal element in cost of production, quantity of labour. Wages not an element in cost of production, except in so far as they vary from employment to employment.”