2. With the limits of our field thus defined, attention should first be called to a fairly prevalent, but mistaken, impression regarding the so-called classical labor theory of value. It is frequently assumed that this theory of value was a simple and absolute dictum, supported in substantial unanimity by a considerable body of writers, called collectively “the classical school.” There is, no doubt, sufficient resemblance among these writers in their general tendencies of thought to justify the term “classical school;” but with respect to their views on the central problem of value, it is their differences of opinion that at present need emphasis, just as it is these differences which take the modern reader by surprise when he first undertakes a detailed study of their writings. Instead of finding the minds of the early English economists dominated by a single labor theory, having the merit of great directness and simplicity, the historian of the theory is confronted with an appalling jumble of ideas on the relation of labor to value. Ricardo, it is true, defended the simple thesis that the exchange value of a commodity is governed by its cost of production in labor, but it is sometimes forgotten that he hedged this doctrine about with several important qualifications and conditions. Furthermore, there was not a contemporary or subsequent writer who did not differ from Ricardo in important points of theory. Taking Smith, Malthus, Ricardo, McCulloch, Torrens, and James Mill together, we find labor sometimes conceived of as _disutility cost_, at other times as _productive power_, without any recognition of the distinction between these concepts. Yet this distinction may be of great importance in certain propositions of theory. We find McCulloch at one time claiming that the value-determining labor employed in the production of a commodity includes the operations of machines and inanimate objects, which are “philosophically just as truly labor as human exertions.” Torrens maintained that value is governed by cost of production in “accumulated” labor, and James Mill held interest on capital to be really wages of labor, an absurd thought absolutely foreign to Ricardo’s theory. In addition to the _labor-cost regulator_ of value, there was the _labor-command measure_ of value, the measure of the value[2] of a good for all times and places, alleged to be afforded by the amount of labor which could be commanded by it or had in exchange for it. The principal defender of this measure, Malthus, did not believe in the labor-cost regulator. It was asserted that the “value of labor” is the same in all times and places. When this value is inadvertently identified with _exchange value_, which must, of course, be measured by the commodity wages of labor, some highly interesting arguments are necessitated to show that real wages are in some sense or other the same in all times and places, in spite of the fact that, as commonly