The qualification which we have numbered one (1) is an addition to Ricardo’s list of qualifications. Number two (2) is Ricardo’s own work; and of number three (3) he is aware, though he abstracts from it with his customary facility.[169] In the end, we may say that Mill placed more stress on qualifications of the labor theory than did Ricardo. Senior made both ground rent and the superior wages of skilled labor causes of qualification of the labor-cost theory. Mill took Senior’s view of skilled labor, but took his stand with Ricardo on the general question of ground rent. CHAPTER X CAIRNES 1. The political economy of J. E. Cairnes is virtually a treatise on value and distribution.[170] The points in his work which are of interest to our present purpose are his analysis of cost of production and his famous innovation, the theory of non-competing groups.[171] The views of Cairnes resemble those of Senior in many ways, and are exceedingly destructive of the labor-cost theory, more so than he seemed to realize or cared to admit. The conditions essential to the existence of value are given as utility, difficulty of attainment, and transferableness.[172] This is Senior’s statement with the inferior term, “difficulty of attainment” substituted for “limitation in supply.” How the substitution could be made in the face of Senior’s reasons against it, is one of the ever-recurring riddles in the history of the philosophy that in some way cost is the essence of value. The theory of value is, according to the best usage of the day, initiated by a discussion of supply and demand. Cairnes posed as a critic of Mill’s conception of the law of supply and demand, but Professor Marshall has shown conclusively that Mill was correct in substance while Cairnes was not.[173] Following Mill, Cairnes next proceeds to cost of production as an influence fundamental to that of supply and demand. “The supply of a commodity tends to adapt itself to the demand at the normal price,” or at that price which just suffices to yield to the producers “the average and usual remuneration on such sacrifices as they undergo.”[174] These sacrifices are the elements which constitute cost of production. In the formal definition of cost, Cairnes makes it include “the ultimate elements—labour, abstinence, and risk.”[175] But the coördinate position of risk is not maintained. For, in the discussion of cost in detail, risk to laborers is held to be a factor in labor cost, and risk to capitalists a factor in abstinence cost. “We find labour as an element of cost of production measurable by reference to three of its incidents, and to three of its incidents only—1st. the duration of the exertion, or the quantity of labour, 2d. its severity, or irksomeness; and 3d. the risk attending it.”[176] As for abstinence: